Singapore and Indonesia Sign Three MOUs to Facilitate Cross-Border Electricity Trade, Carbon Capture and Storage, and Sustainable Industrial Zone
On 13 June 2025, Singapore and Indonesia signed three Memoranda of Understanding (“MOUs“) on Cross-Border Electricity Trade (“CBET“), Carbon Capture and Storage (“CCS“), and Sustainable Industrial Zone (“SIZ“). These documents are part of a continuing shift toward regional energy integration and present substantial opportunities for energy and infrastructure sector participants.
A summary of each document is outlined below.
- CBET MOU: This builds on the past MOUs on energy cooperation between Singapore and Indonesia. Both countries aim to facilitate the necessary policies, regulatory frameworks and business arrangements for CBET within 12 months of the signing of the MOU.
- CCS MOU: A joint Working Group will be set up to study components of a legally-binding government-to-government (“G2G“) agreement on CCS. The G2G agreement will be necessary to enable cross-border CCS projects to be implemented.
- SIZ MOU: A joint Taskforce will study the development of potential industries within the SIZ in Bintan, Batam and Karimun (BBK). This MOU underscores both countries’ commitment to providing regulatory clarity for renewable energy initiatives, paving the way for further investment opportunities in Indonesia.
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Label It or Be Liable: The Legal Duty to Declare Non-Halal Products
Amid increasing public concern over unclear labelling of non-halal products in Indonesia, businesses face rising legal and reputational risks if they fail to comply with halal product assurance obligations. Recent enforcement actions by the Halal Product Assurance Organising Body (BPJPH) and the National Consumer Protection Agency (BPKN) highlight the urgency of proper labelling.
Under Law No. 33 of 2014 on Halal Product Assurance (as amended by Law No. 6 of 2023) and Government Regulation No. 42 of 2024 (“GR 42/2024“), businesses must either obtain halal certification or clearly disclose if a product contains non-halal ingredients, such as pork, alcohol or other substances derived from non-halal sources. This requirement extends beyond food and beverages to other products such as cosmetics, medicines and supplements, which will become subject to phased halal certification.
Failure to comply can result in administrative sanctions, including warnings and product recalls. Intentional misrepresentation may also lead to criminal liability under Law No. 8 of 1999 on Consumer Protection, which requires businesses to provide honest, accurate product information.
Article 110 of GR 42/2024 mandates that non-halal products must display a non-halal label in a clear, durable and visible manner on packaging or product surfaces. While detailed technical labelling guidelines are still pending, businesses are advised to act in good faith by disclosing non-halal content clearly using text or icons.
Halal compliance and transparent labelling are legal obligations, not optional choices. Businesses must prioritise honest disclosure to protect consumers, avoid sanctions and safeguard their reputation in an environment of heightened consumer awareness and regulatory scrutiny.
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Updates on Import and Export Rules Under Minister of Finance Regulation 34/2025
In May 2025, the Indonesian government issued Minister of Finance Regulation No. 34 of 2025 (“New Regulation“) amending Regulation No. 203 of 2017. Effective from 6 June 2025, the New Regulation refines the export and import provisions on goods carried by passengers and transportation crews, aiming to improve service quality and legal clarity.
Key updates include clearer rules on verbal customs declarations, now permitted for passengers over 60 years old, people with disabilities, Hajj pilgrims, very very important person (VVIP), state guests and those passing through certain designated locations.
The New Regulation also introduces a new category of personal-use goods eligible for exemptions from customs duty, value added tax (“VAT“) (not collected) and income tax under Article 22. These include:
- goods carried by Hajj pilgrims with a value up to US$2,500 (Free on Board or FOB); and
- prizes or awards such as medals or trophies from formally recognised competitions in sports, arts or religion.
To qualify, recipients must be Indonesian citizens and the items must not include vehicles, excisable goods or gambling prizes.
Non-personal-use goods carried by passengers or crews are now explicitly taxed. They are subject to:
- 10% customs duty;
- applicable VAT or Luxury Goods Sales Tax; and
- 5% income tax under Article 22.
Provisions for excisable goods are removed from the New Regulation and will be governed under separate excise rules.
Importantly, the income tax provisions under Article 22 also apply retroactively from 1 January 2025 to 6 June 2025.
Travellers should be aware of these changes to avoid misclassification of goods and potential tax implications. For excisable goods, separate guidance must be consulted under the relevant excise regulations.
For more information, click here to read our Legal Update.
A New Era of Tax Audits in Indonesia Under PMK No. 15 of 2025
Indonesia’s Ministry of Finance has issued Minister of Finance Regulation No. 15 of 2025 (“PMK 15“), effective from 14 February 2025, introducing a major overhaul of the country’s tax audit framework. Aimed at improving efficiency and legal certainty, PMK 15 replaces previous audit regulations by establishing a unified system with clearer procedures and shorter timelines.
PMK 15 introduces three audit types: (i) comprehensive (covering all tax items); (ii) focused (specific items); and (iii) specific (targeted data or obligations), each with different assessment periods, which are five, three, and one month respectively. Extensions of up to four months are allowed in complex cases, such as those involving group companies or transfer pricing.
A key procedural change is the introduction of a mandatory discussion of preliminary audit findings, allowing taxpayers to clarify issues before the audit progresses. PMK 15 also shortens the response window to audit findings (SPHP) to five working days with no extensions and limits the final discussion period (PAHP) to 30 working days.
Refusing a tax audit does not halt the process. Instead, it can result in a deemed tax assessment or even trigger a preliminary evidence audit (pemeriksaan bukti permulaan or Bukper) in suspected criminal cases. PMK 15 also formalises the separation between regular audits and criminal tax procedures, thereby preventing procedural overlap.
PMK 15 supports digitalisation by promoting the use of the Coretax system for document exchange and communication.
Taxpayers are advised to improve audit readiness, maintain open communication with auditors and ensure digital preparedness. Non-compliance or delayed responses may lead to increased scrutiny or legal consequences under the new streamlined audit regime.
For more information, click here to read our Legal Update.
New Public Procurement Regulation Strengthens E-Purchasing and Domestic Product Use
Presidential Regulation No. 46 of 2025 (“New Regulation“), effective from 30 April 2025, marks the second amendment to Indonesia’s public procurement rules, building on Presidential Regulation No. 16 of 2018 and its 2021 amendment. The New Regulation strengthens the use of electronic procurement (e-purchasing) and prioritises the use of domestic goods and services in public sector procurement.
A major change is the mandatory use of the Electronic Catalogue (“E-Catalogue“) whenever goods or services are listed there. This applies to all government institutions, except in specific cases where the E-Catalogue cannot meet technical or logistical needs. The E-Catalogue is now open to broader users, including businesses, community groups and individuals.
Consultancy services, previously excluded, are now eligible for procurement through the E-Catalogue, covering both individual consultants and firms.
To boost domestic industry, the New Regulation introduces a four-layer prioritisation system for locally produced goods, based on local content and company benefit value. Imported goods are allowed only if suitable local alternatives are unavailable, subject to official approval.
The New Regulation also raises the direct procurement threshold for construction work from IDR200 million to IDR400 million, and allows for contract amendments exceeding the previous 10% cap in emergencies, with Budget User approval.
In international procurement, government institutions must now include clauses promoting technology transfer, domestic involvement and the use of Indonesian products. However, foreign funding terms will take precedence when applicable.
Overall, the New Regulation aims to streamline procurement processes, promote national interests and increase business participation. Businesses are advised to align their offerings with local content requirements and stay compliant with the new rules.
For more information, click here to read our Legal Update.
Indonesia Updates Beneficial Ownership Disclosure Rules: Major Changes that will Affect Every Business
The Indonesian government has enacted Minister of Law Regulation No. 2 of 2025 (“MOL Regulation 2/2025“) to replace the earlier Ministry of Law and Human Rights Regulation No. 21 of 2019, aiming to improve corporate transparency and compliance in disclosing beneficial ownership. Effective from 4 February 2025, MOL Regulation 2/2025 supports anti-money laundering and counter-terrorism financing efforts by shifting from government-led supervision to a self-compliance model.
MOL Regulation 2/2025 broadens the scope of entities required to report beneficial ownership, explicitly including civil partnerships and individual companies, which are often used by small businesses. Further, it mandates corporations to update their beneficial ownership data at least annually and upon any changes, and to maintain supporting documentation.
A key innovation is the introduction of a risk-based verification system. Corporations, notaries, and the Ministry of Law must verify beneficial ownership data using questionnaires and cross-checks, with high-risk entities being subject to more scrutiny. The Ministry of Law can conduct direct (e.g. teleconferencing or site visits) and indirect clarifications, documented in formal reports.
Non-compliance is monitored through the Director General of the General Law Administration (Administrasi Hukum Umum or “AHU“) website, where a list of corporations failing to report is published. Sanctions may include reprimands, blacklisting or access blocking to the AHU system. Notaries now also have responsibilities in submitting beneficial ownership information under certain corporate actions.
Overall, MOL Regulation 2/2025 streamlines oversight, broadens regulatory coverage and introduces clearer obligations and penalties. Corporations are urged to proactively update their compliance processes to meet its requirements, avoid enforcement actions and support greater corporate transparency across all business types.
For more information, click here to read our Legal Update.
Decoding Indonesia's Latest Online Child Safety Regulations: What Digital Platforms Need to Know
On 27 March 2025, the Indonesian government issued a new regulation on online child protection titled Government Regulation No. 17 of 2025 (“Regulation“), introducing detailed obligations for electronic system operators (“ESOs“), both domestic and foreign, whose platforms are accessed or likely to be accessed by children under 18 years old in Indonesia.
The Regulation requires ESOs to conduct risk assessments to identify potential harms to children, such as exposure to harmful content, online contact with strangers and addictive features. Based on this, services are classified as either high-risk or low-risk and must be reported to the Ministry of Communications and Digital Affairs.
A key feature is the mandatory opt-in parental consent for children under 17 years old. Children aged 17 may give their own consent, but parents have six hours to object. Without explicit parental approval, children may not access the service.
The Regulation also mandates privacy-by-default. ESOs must limit data sharing, turn off location tracking and conduct Data Protection Impact Assessments (DPIA). If applicable, a Data Protection Officer (DPO) must also be appointed.
Children must be grouped into five age categories, each with tailored account settings. Age limits must be clearly stated and age verification mechanisms must be in place. All information must be child-friendly and monitoring activities must be visibly disclosed.
The Regulation extends to third-party vendors and prohibits harmful practices such as dark patterns, unauthorised location tracking and unjustified profiling.
ESOs have a two-year transition period until 27 March 2027 to comply, though civil claims remain possible in the interim. Early compliance is strongly encouraged to avoid legal risks and to demonstrate a commitment to online child safety.
For more information, click here to read our Legal Update.
Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice
