Indonesia Overhauls its Financial Sector: An Introduction to the Amended P2SK Law
Indonesia has enacted Law No. 4 of 2026, amending the framework established under Law No. 4 of 2023 on the Development and Strengthening of the Financial Sector (P2SK Law). The amendments represent a broad overhaul of Indonesia’s financial sector architecture, touching at least 17 areas of regulation across banking, capital markets, insurance, digital assets, financial infrastructure, and institutional governance. While much of the framework requires further implementation through regulations to be issued by the Financial Services Authority (“OJK“), Bank Indonesia (BI), and the government, several reforms introduce immediate deadlines and structural changes.
One notable reform is the establishment of a strategic mineral and commodity exchange, which must become operational by 1 January 2027 and will be supervised by OJK instead of the Indonesian Commodity Futures Trading Regulatory Agency (Badan Pengawas Perdagangan Berjangka Komoditi or Bappebti). The law also mandates the creation of one or more Indonesia International Financial Centres, with a separate implementing law required within three months of promulgation.
The amendments introduce significant market reforms, including the demutualisation of the Indonesia Stock Exchange (IDX), allowing non-members to become shareholders, and a new title-transfer margin regime that enhances closeout netting and collateral protections in financial market transactions. The law also expands OJK’s oversight of digital finance by expressly regulating crypto assets, tokenisation, stablecoins, staking, lending, and other digital asset activities, while empowering OJK to freeze or block non-compliant crypto transactions.
The insurance sector is also affected through a revamped policy guarantee framework that grants the Indonesia Deposit Insurance Corporation (Lembaga Penjamin Simpanan or LPS) discretion to determine whether to rescue a failing insurer. Additional reforms broaden banking business activities, strengthen support for micro, small, and medium enterprises (MSME) financing, expand compulsory traffic accident insurance coverage, introduce restorative justice mechanisms for financial-sector offences, and establish a multi-agency task force to address unlicensed financial activities. Collectively, these reforms signal Indonesia’s intention to develop a more sophisticated, internationally aligned, and closely supervised financial system.
For more information, click here to read our Legal Update.
An Overhaul in Indonesian E-Commerce Regulations: From Platform Compliance to Platform Gatekeeping
Indonesia has significantly overhauled its e-commerce regulatory framework through Minister of Trade Regulation No. 19 of 2026 on Electronic Commerce, which took effect on 8 June 2026 and replaces Minister of Trade Regulation No. 31 of 2023. The regulation expands the responsibilities of e-commerce platforms beyond their own compliance obligations, requiring them to actively oversee merchants, pricing practices, product rankings, consumer information, business licensing compliance, and product traceability. It also strengthens enforcement through administrative sanctions that may include platform blocking and licence revocation.
A major development concerns competition law and platform governance. The regulation adopts concepts similar to the European Union (EU) Digital Markets Act by targeting issues such as self-preferencing, platform transparency, data use, and algorithmic decision-making. Platforms must establish procedures to detect unfair competition and price manipulation, including sustained below-cost selling, unreasonable subsidies, and distortive discount programmes. They must also notify the Komisi Pengawas Persaingan Usaha or KPPU within three business days of identifying suspected violations.
Consumer protection obligations have also been strengthened. Platforms must verify claims such as “official store” or “authorised seller” labels and take action against misleading advertisements and repeat offenders. In addition, platforms are now expected to assist merchants in obtaining necessary business licences, display licensing status to consumers, and suspend merchants that fail to secure licences within the prescribed timeframe.
For the first time, the regulation expressly addresses artificial intelligence (“AI“). Businesses using AI must disclose AI-generated recommendations or content and ensure information is accurate and verifiable. Platforms must implement AI governance mechanisms, provide avenues for consumer complaints regarding AI outputs, and safeguard personal data and intellectual property rights. The regulation also introduces enhanced product-origin disclosure requirements and establishes a stricter sanctions regime for non-compliance.
For more information, click here to read our Legal Update.
Government Regulation 24/2026: Indonesia Centralises Coal, Palm Oil, Ferro Alloys Exports Through State-Owned Enterprises
Indonesia has introduced a major reform to the export of strategic natural resources through Government Regulation No. 24 of 2026 (“GR 24/2026“), effective from 1 June 2026. The regulation centralises the export of designated commodities, currently coal, palm oil, and ferro alloys, through government-appointed state-owned enterprises (“Export SOEs“). Full implementation is expected by 31 December 2026, although the Government may accelerate the timeline following a policy evaluation.
Under the new framework, Export SOEs will become the sole exporters or intermediaries for exports of designated commodities. The regulation also authorises Export SOEs to determine export prices and set margins within a “reasonable range”, although the methodology and parameters for doing so remain unclear and are expected to be addressed through implementing regulations. The Government retains broad authority to expand the list of strategic commodities subject to the regime through future ministerial regulations.
GR 24/2026 creates significant commercial and contractual implications. Existing offtake agreements with overseas buyers may require review, restructuring, novation, or termination as Export SOEs are inserted between producers and end-buyers. The transition may also affect financing arrangements linked to export contracts, particularly where long-term supply agreements form part of lenders’ security or project-financing structures. Export contracts entered into before 1 June 2026 remain subject to evaluation by Export SOEs, while the treatment of new contracts during the transition period remains uncertain.
The regulation also introduces enhanced export oversight, including data reporting obligations and integration with government systems such as Customs Excise Information System and Automation (CEISA), the Indonesia National Single Window (INSW), the Trade Information System (INATRADE), the Integrated Foreign Exchange monitoring Information System (SiMoDIS), and the Minerba Online Monitoring System (MOMS). Tax implications may arise, particularly in relation to value-added tax (VAT), income tax, and non-tax state revenue (PNBP). Businesses involved in coal, palm oil, or ferro alloy exports should review existing contracts, financing arrangements, and compliance obligations while monitoring forthcoming implementing regulations and operational guidance.
For more information, click here to read our Legal Update.
Deferred Prosecution Agreements in Indonesia: A New Framework for Corporate Criminal Enforcement
Indonesia has introduced Deferred Prosecution Agreements (“DPAs“) as part of its corporate criminal enforcement framework through Law No. 20 of 2025 on the Code of Criminal Procedure (“KUHAP“), which came into force on 2 January 2026. The new framework allows criminal prosecution against corporate suspects or defendants to be suspended, with the possibility of dismissal if the corporation complies with conditions agreed under a court-approved DPA. This marks a significant shift in Indonesia’s approach to corporate criminal liability and provides an alternative to full criminal prosecution.
The DPA mechanism is formally regulated under Article 328 of the KUHAP. Any proposed DPA is subject to judicial review, with courts assessing compliance with applicable laws, the proportionality of sanctions and obligations, the impact on victims, society, the environment, and the national economy, as well as the corporation’s ability to fulfil its commitments. Potential DPA obligations may include compensation or restitution payments, implementation of compliance and anti-corruption programmes, reporting requirements, cooperation with law enforcement authorities, and other corrective measures.
Indonesia’s first DPA was approved by the Serang District Court on 4 May 2026 through Court Decision No. 1/Pen.Pid-PPP/2026/PN Srg, involving PT Crown Steel in a hazardous and toxic waste (B3) management case. The court focused not only on the underlying violation but also on whether the proposed DPA provided meaningful environmental remediation and restoration, highlighting a practical and solution-oriented approach to corporate enforcement.
For corporations, DPAs may offer earlier legal certainty, reduced litigation costs, protection of business continuity, and reputational benefits. However, eligibility and suitability will likely depend on factors such as the scale of loss, senior management involvement, compliance history, misconduct severity, and the presence of public officials. Companies should strengthen compliance programmes, remediation planning, and governance frameworks to maximise their ability to utilise DPAs effectively.
For more information, click here to read our Legal Update.
Indonesia's New Outsourcing Rules: Minister of Manpower Regulation No. 7 of 2026 and What it Means for Employers
Indonesia has introduced a new outsourcing framework through Minister of Manpower Regulation No. 7 of 2026 on Outsourcing, which came into effect on 30 April 2026. The regulation was issued as a follow-up to Constitutional Court Decision No. 168/PUU-XXI/2023 and represents a significant shift towards tighter regulation, greater worker protection, and increased regulatory oversight of outsourcing arrangements.
A key change is that outsourcing is now expressly limited to certain supporting activities, namely cleaning services, food and beverage supply, security services, driver and employee transportation services, operational support services, and supporting work in the mining, oil and gas, and electricity sectors. While the inclusion of “operational support services” provides some flexibility, companies are expected to assess whether outsourced activities are genuinely ancillary to their core business.
The regulation also imposes stricter documentation requirements. All outsourcing arrangements must be governed by written agreements containing mandatory provisions, including descriptions of outsourced work, work locations, worker numbers, employee rights and protections, social security, religious holiday allowance (THR) entitlements, occupational health and safety provisions, and termination-related rights. These agreements are likely to become a central focus of labour inspections.
Importantly, user companies now have an express obligation to ensure outsourcing providers comply with statutory labour protections. This shifts outsourcing from a purely commercial arrangement to one requiring active compliance monitoring, vendor due diligence, ongoing audits, and stronger contractual safeguards. In addition, outsourcing agreements must be registered with the local manpower office within three working days of execution.
The regulation introduces administrative sanctions, including business activity restrictions, for non-compliance. Existing outsourcing arrangements may continue until expiry, but businesses have until 30 April 2028 to align outsourcing structures with the new framework. Companies should review existing outsourced roles, contracts, and compliance processes to minimise regulatory and operational risks.
For more information, click here to read our Legal Update
Indonesia Revises Export Framework: Key Changes to Procedure and Export Bans
Indonesia has revised its export regulatory framework through Ministry of Trade Regulation No. 5 of 2026 and Ministry of Trade Regulation No. 6 of 2026, both effective from 1 April 2026. These regulations aim to simplify export licensing, increase digitalisation and automation, and harmonise export controls across various sectors.
Key reforms include the removal of certain reporting obligations for exports requiring only a Surveyor Report (Laporan Surveyor or LS), the introduction of a formal mechanism to cancel export certificate applications through the Indonesian National Single Window (“INSW“) system, and the elimination of requirements for holders of certain Registered Exporter (Eksportir Terdaftar or “ET“) licences to conduct exports within a specified period. Re-exported goods meeting prescribed criteria are also exempt from export licensing requirements.
Sector-specific changes affect the tin, oil and gas, coal, minerals, and agricultural industries. Notably, several export licensing requirements for tin and oil and gas products have been relaxed, coal exporters face fewer documentary requirements, and industrial licence holders are no longer eligible to obtain export permits for ilmenite and rutile concentrates. In agriculture, the validity period of ET Kratom licences has been standardised, documentation requirements for swiftlet nest exports have been updated, and certain rice exports previously prohibited are now permitted subject to an Export Permit (Perizinan Ekspor or PE).
The Government has also automated the issuance of export permits for fishery commodities and rice through integration between Indonesia National Trade Repository (INATRADE) and INSW, reducing manual processing and accelerating approvals. In addition, new export controls have been imposed on certain protected animal species, while export bans on certain rice products have been lifted and the rules governing prohibited tin solder exports have been revised. Businesses should review licence transitions, compliance obligations, and product classifications to ensure continued compliance.
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
