Legal Updates for April 2016

Government Moves to Regulate App-based Transportation Service Providers

As a response to large-scale protests by taxi drivers last month, the Government has issued Minister of Transportation Regulation No. PM 32 of 2016 on Unscheduled Public Transportation Services. The new regulation, which was issued on 1 April 2016 and comes into force on 1 October 2016, addresses, among other things, the different types of unscheduled public transportation service (penyelenggaraan angkutan orang dengan kendaraan bermotor umum tidak dalam trayek), the rights and obligations of public transportation companies and, very specifically, the role of app-based transportation service providers in providing transportation services.

Land Ministry Clarifies Rules on Property Ownership by Non-Indonesians

The Minister of Agrarian and Spatial Planning Affairs has issued a regulation (the “New Regulation”)i  to further clarify the rules governing the ownership of real property by non-Indonesians, as set out in Government Regulation No. 103 of 2015 (“Reg. 103/2015”). The New Regulation, which was issued on 21 March 2016, reiterates the restrictions contained in Reg. 103/2015, and in addition, sets minimum price thresholds that must be satisfied before a non-Indonesian may purchase a property. On a somewhat more positive note, it stresses that Hak Pakai  (Right to Use)  property may be pledged as collateral.

Government Reduces Authorized Capital Requirement for MSMEs

As part of the overall effort to encourage more micro, small and medium enterprises (“MSME”) to incorporate, the government, by virtue of Government Regulation No. 7 of 2016 (the “Regulation”), has relaxed the authorised capital requirement for such enterprises in a situation where the net assets of one or all of the founders of an enterprise satisfy the criteria for classification as an MSME. 

Credit-Card Issuers Now Required to Divulge Customer Data to Revenue Authorities

As part of the Government’s efforts to raise the tax ratio and boost tax revenues, the Minister of Finance has issued Regulation No. 39/PMK.03/2016 (on Tax Data and Information, and Procedures for Furnishing Tax Data and Information / "New Regulation"), which came into effect on 23 March 2016. The New Regulation amends Minister of Finance Regulation No. 16/PMK.03/2013 for the fifth time.

The New Regulation requires a total of 23 Indonesia-based credit-card issuers to report a wide range of information on customer transactions to the Directorate General of Taxes (as the Indonesian Revenue Service is known), including information on such things as transaction details, dates, values and locations. This marks the first time that credit-card issuers in Indonesia have been required to provide such information to the Directorate General of Taxes.

The Government’s Effort To Regulate Over-The-Top Services

In the much anticipated move following the Netflix and transport applications’ debacles, the Minister of Communications and Informatics on March 31, 2016 issued Circular Letter No. 3 of 2016 (“CL”) which aims to give a glimpse of how the Government is thinking about the topic prior to enacting the ‘regulation’.  Two considerations were cited as to why the CL was issued.  First, as an advance warning of the upcoming regulation (Note: no draft of the said regulation is attached to the CL).  Second, to provide ample time for the service providers to prepare, i.e. any adjustments to their business operations (Note: no deadline or indication in the CL of when the regulation will be issued).