- Conventus Law: What are the implications of Ministerial Regulation No. 2 of 2025 (on beneficial ownership) for corporations, particularly foreign-owned ones?
MetaLAW: Regulations concerning report on beneficial ownership is not a new thing in Indonesia. This has been previously regulated under Presidential Regulation No. 13 of 2018. However, recently, the Ministry of Law (“MOL”) issued new regulations pertaining this issue, i.e., Regulation No. 2 of 2025 on the Verification and Supervision of Beneficial Owners of Corporations (“MOL Regulation 2/2025”). MOL Regulation 2/2025 introduces several new provisions for the supervision of beneficial owners, among others (i) requiring all business entities in Indonesia to update their beneficial-owner data annually; (ii) mandating verification and risk assessment of beneficial owners in relation to money laundering and terrorism financing; and (iii) providing for MOL supervision of beneficial owners.
Particularly for business entities owned by foreign entity, MOL Regulation 2/2025 introduces obligations to update beneficial-owner data and to undergo verification and assessment of foreign beneficial owners.
The MOL also possesses the authority to ascertain the other beneficial owner of the company through verification.
- Conventus Law: What are the main potential risks (legal, reputational, operational) if companies fail to comply with the annual verification and reporting requirements?
MetaLAW: The potential risks arising if a company fails to conduct the annual verification or reporting of its beneficial owner are as follows: (i) administrative sanctions in the form of written warnings; (ii) inclusion on a blacklist; and (iii) the blocking of access to the AHU Online system.
In light of these sanctions, it can be understood that such consequences may adversely affect the company’s operations, as the company would lose access to AHU Online that a system administered by the MOL. This may impact the company’s operations in various ways, including corporate restructuring (mergers and acquisitions) or general corporate matters (amendments to the articles of association or board member positions). Further, for the reputational risk, the company may be listed on the blacklist in the electronic announcement published on the official website of the Directorate General of General Legal Administration.
- Conventus Law: With the introduction of Government Regulation No. 28 of 2025, which replaces GR 5/2021, what are the most significant practical implications for business licensing, and how should in-house legal teams best adapt their licensing strategies?
“One of the most significant changes is the introduction of fictitious positive approval.”
MetaLAW: The principal practical implication of the enactment of Government Regulation No. 28 of 2025 (“GR 28/2025”) is the adjustment of business licensing requirements. One of the most significant changes is the introduction of fictitious positive approval. This means that certain approvals will be deemed issued if the relevant authority has not issued their approval within a regulated timeframe, but all the supporting documents have been submitted and declared as complete.
The in-house counsel should be aware of these recent changes so that they can proceed with the next steps while the timeframe has been passed without the issuance of the approval from the relevant authorities.
- Conventus Law: In what ways could the new risk-based licensing regime help or hinder foreign investment into Indonesia, especially in “high-risk” sectors?
MetaLAW: The introduction of a new business licensing regime under Government Regulation No. 28 of 2025 is accompanied by new provisions set out in the Investment Coordinating Board Regulation No. 5 of 2025 concerning Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facilities through the Electronic Integrated Business Licensing System (Online Single Submission) (“BKPM Regulation 5/2025”).
BKPM Regulation 5/2025 introduces a new requirement specifically for foreign investment, particularly regarding the obligation for foreign investors to inject capital into the company. Under the previous regulations, foreign investors intending to conduct business activities were required to place a minimum paid-up capital of IDR 10,000,000,000 in the company. However, with the implementation of BKPM Regulation 5/2025, the initial paid-up capital requirement has been reduced to IDR 2,500,000,000. This adjustment may facilitate foreign investors in investing in Indonesia, as they are no longer obligated to provide substantial initial equity investments.
- Conventus Law: The third amendment to the SOE Law (Law No. 1 of 2025) established the new sovereign wealth fund “Danantara.” What are the expected legal and governance implications for Indonesia’s SOEs and for foreign parties engaging with them?
MetaLAW: The enactment of Law No. 1 of 2025 on State-Owned Enterprises (“SOEs”) (“SOE Law”) introduces several new provisions concerning SOEs. Under the SOE Law, 99% of Indonesian SOE shares are held by Danantara. Consequently, Danantara becomes the entity authorized to manage SOEs in Indonesia, with authority that include, but are not limited to: (i) approving capital increases and/or reductions in SOEs; (ii) establishing strategic guidelines and policies; and (iii) managing SOE dividends.
Given Danantara’s position as a shareholder, the policy direction and governance of an SOE will inevitably depend on Danantara’s determinations – although still subject to the relevant regulations. In addition, Danantara has issued Letter of the Investment Management Agency Daya Anagata Nusantara No. S-027/DI-BP/V/2025 of 2025 concerning Directions on the Implementation of GMS and Corporate Actions of SOEs and SOE Subsidiaries (“Letter 27/2025”), under which Danantara states that all significant corporate actions and long-term contracts of SOEs shall first be reviewed by Danantara. In this context, both foreign and domestic parties are likely to be affected, where the implementation of any cooperation with an SOE must first be reviewed by Danantara. The impact of this new initiative on foreign investors will depend on the specific policy of Danantara.
- Conventus Law: How might the centralization of state assets under Danantara change risk allocation, investment structuring, or dispute resolution in transactions involving SOEs?
MetaLAW: The establishment of Danantara as regulated under the SOE Law brings structural changes, particularly to the organizational framework of SOE companies. Previously, SOEs operated under sector-specific holding structures. However, with the introduction of Danantara, these holding structures have been consolidated into a single structure with Danantara as the primary parent entity.
From a risk-allocation perspective, one relevant aspect is Danantara’s authority to determine centralized policies for the SOEs under its control, thereby aligning the business development and operational direction of each SOE.
- Conventus Law: How does the OJK’s new Regulation No. 1 of 2025 on derivatives with securities as underlying assets reshape the regulatory regime for Indonesian capital markets?
“(…) this expands the supervisory responsibilities of OJK as the regulator of the Indonesian capital market.”
MetaLAW: OJK Regulation No. 1 of 2025 is a new regulation governing derivative instruments. Previously, derivatives were classified as commodities and were therefore subject to the regulations of the Commodity Futures Trading Regulatory Agency (Bappebti). However, with the enactment of Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (“P2SK Law”), the authority to supervise derivative instruments was transferred from Bappebti to the Financial Services Authority (OJK).
OJK Regulation No. 1 of 2025 introduces alignment within Indonesia’s capital market sector, whereby derivative instruments are now regulated as part of the capital market framework. As a result, this expands the supervisory responsibilities of OJK as the regulator of the Indonesian capital market.
- Conventus Law: Given the broader framework introduced by the 2023 Financial Sector Development & Strengthening Act (P2SK Law), what further regulatory shifts should financial institutions be prepared for in 2026?
MetaLAW: Since the enactment of the P2SK Law, several developments have taken place, including judicial reviews before the Constitutional Court and the issuance of new regulations by the Financial Services Authority (OJK) to implement the P2SK Law. In our view, several regulatory developments are likely to occur in 2026, such as adjustments to regulations currently under judicial review before the Constitutional Court (e.g., provisions on pension fund institutions under the P2SK Law), the issuance of new OJK regulations in the financial sector, such as further regulations on blockchain technology, initial coin offerings, and amendments to existing OJK regulations.
- Conventus Law: On 1 January 2026, the revised Criminal Procedure Code will bring substantial changes to how investigations, detentions, and arrests are handled. How does the new code affect corporate clients (e.g., internal investigations, white-collar crime)?
MetaLAW: In 2023, the Government of Indonesia enacted Law No. 1 of 2023 concerning the Criminal Code (“Penal Law”), which will come into effect on 1 January 2026. The Penal Law introduces several implications and substantive changes, including provisions governing crimes committed within the corporate context. Notably, the Penal Law now recognizes corporations as criminal subjects, in contrast to the previous Penal Law, which did not accommodate corporate criminal liability, as corporate offenses were regulated under separate laws.
The Penal Law classifies corporate criminal liability into two types: principal and additional penalties. In terms of principal penalties, corporations may be subject to fines, whereas additional penalties may include compensation, revocation of licenses, and corporate dissolution. Furthermore, the Penal Law regulates specific corporate offenses, including: (i) criminal liability for false financial statement disclosures; (ii) acts causing harm to creditors; and (iii) fraudulent actions by directors and commissioners.
- Conventus Law: From a compliance perspective, how should companies rethink their internal compliance, whistleblower, and self-reporting mechanisms under this new framework?
MetaLAW: From the perspective of corporate criminal liability, in general a corporate crime may be committed by: (i) management members who hold functional positions within the organizational structure; (ii) individuals acting for and on behalf of, or for the benefit of, the corporation based on an employment relationship; (iii) persons issuing instructions; (iv) controlling parties; or (v) beneficial owners who are outside the organizational structure but are capable of exercising control over the corporation. Based on these categories, it can be concluded that actors of corporate crimes may originate from within the corporation itself or from outside parties who nonetheless possess the ability to control the corporation. Accordingly, companies must develop internal policies that cover both internal actors and external parties who may exert control over the corporation.
In addition, it should be noted that within a maximum period of two years from the enactment of the Penal Law, companies must remain updated on the implementing regulations that will subsequently be issued.
- Conventus Law: In 2025, the Constitutional Court ruled that the government, companies, and institutions can no longer file defamation complaints under certain circumstances. What does this ruling mean for corporate reputation management and crisis communications?
MetaLAW: Under Law No. 11 of 2008 on Electronic Information and Transactions, as amended by Law No. 1 of 2024 (“ITE Law”), there is a provision stipulating that defamation committed through electronic systems may be subject to criminal sanctions. This provision was brought before the Constitutional Court for judicial review.
The Constitutional Court’s decision on this matter is set out in Decision No. 105/PUU-XXII/2024 dated 29 April 2025 (“Decision No. 105/2024”), in which the constitutional court annulled the interpretation that defamation may be imposed on entities other than individuals. The court ruled that defamation provisions apply only to natural persons, and not to government bodies, groups of persons with specific or identifiable characteristics, institutions, corporations, professions, or official positions. As a result, the decision eliminates the right of corporations and government bodies to file claims for defamation.
- Conventus Law: In what ways might this judicial decision influence ongoing discussions around reform of the Electronic Information and Transactions (ITE) law, specifically in relation to digital speech and liability?
MetaLAW: Decision No. 105/2024 has implications for the interpretation of the provisions of the ITE Law, particularly regarding the scope and limitations of sanctions and the application of its provisions. The decision restricts the interpretation of: (i) the subjects of defamation; and (ii) the evidentiary requirements for the dissemination of electronic information that may result in discrimination, hostility, or violence.
The ITE Law is fundamentally a regulation designed to accommodate the use of electronic systems, particularly regarding freedom of expression through electronic media and the accountability of electronic system providers. However, certain provisions of the Law are inherently open to multiple interpretations. In this context, Decision No. 105/2024 serves to clarify these ambiguities and to maintain clear boundaries of interpretation and responsibility in the implementation of the ITE Law.
“Indonesia has implemented several new regulations, including MOL Regulation 2/2025, GR 28/2025, BKPM Regulation 5/2025, and the new Penal Law and Criminal Procedure Code, which will take effect in the upcoming year. These significant changes necessitate a thorough review by the general counsel to ensure compliance with the regulations.”
- Conventus Law: As we look ahead to 2026, what is the most important legal or regulatory shift that Indonesia’s General Counsel should focus on, and how can they prepare now based on what we saw in 2025
MetaLAW: As previously discussed, Indonesia has implemented several new regulations, including MOL Regulation 2/2025, GR 28/2025, BKPM Regulation 5/2025, and the new Penal Law and Criminal Procedure Code, which will take effect in the upcoming year. These significant changes necessitate a thorough review by the general counsel to ensure compliance with the regulations.
Currently, the Directorate General of Taxation is actively investigating cases to enhance tax revenue collection from taxpayers. Consequently, several novel tax regulations were enacted in 2025, among others regulations concerning update on the tax audit rule (MoF Regulation 15/2025), MoF Regulation 68/2025 – amendment to the regulation concerning determination of duties and tariff for exported items.
In the employment sector, the Constitutional Court recently issued a new decision that establishes the statute of limitations for employment termination disputes to commence from the date when the parties are unable to reach negotiations.
The General Counsel should prioritize this matter to ensure compliance with the regulations and maintain adherence to the company’s obligations under the prevailing laws and regulations.
For further information, please contact:
MetaLAW, Legal & Tax Consultant, Jakarta, Indonesia
general@metalaw.id
