Frequently Asked Questions

Energy is the heartbeat of any nation, and Indonesia is no exception. Despite a growing global shift toward renewable energy, oil and gas remain the backbone of Indonesia’s economic and industrial development. They fuel transportation, power industries, and secure state revenues that finance infrastructure, healthcare, and education.

For businesses and investors, the oil and gas sector represents a double-edged sword: the opportunities are massive, but so are the risks. Investors often ask: Is Indonesia still worth the bet? The answer lies in how the government regulates cooperation. With the issuance of MoEMR Regulation No. 14 of 2025 (Reg. 14/2025), Indonesia has signaled a bold step forward. This regulation introduces new schemes that are not only investor-friendly but also designed to ensure long-term national energy security.

Transitioning into this new regulatory era, it becomes clear: if businesses want to unlock Indonesia’s oil and gas potential, they must first understand the legal frameworks shaping cooperation schemes today.

The Issuance of MoEMR Regulation No. 14/2025

1. Background and National Energy Priorities

Indonesia’s dependence on oil and gas has been both a blessing and a challenge. While revenues from oil and gas production have supported the state for decades, declining reserves, rising operational costs, and global market volatility have pushed the government to rethink its strategy.

MoEMR Reg. 14/2025 was born out of this necessity. It seeks to rejuvenate investor confidence, streamline cooperation processes, and align Indonesia’s energy sector with global standards on transparency, efficiency, and environmental sustainability.

2. What’s New Compared to Previous Frameworks?

Unlike earlier regulations that often leaned toward rigidity, Reg. 14/2025 brings flexibility. Investors can now negotiate cooperation models tailored to project realities—whether that’s a gross split PSC, cost recovery arrangement, joint operation, or even enhanced recovery initiatives.

Another key innovation is the explicit support for unconventional oil and gas resources such as shale gas and coal bed methane—areas previously overlooked but critical to Indonesia’s long-term strategy. By adopting these reforms, Indonesia positions itself as a competitive destination amid fierce global competition for energy investment.

Cooperation Schemes under MoEMR Reg. 14/2025

1. Production Sharing Contracts (PSC): Gross Split vs. Cost Recovery

The PSC has always been the foundation of Indonesia’s oil and gas industry. Under Reg. 14/2025, investors can choose:

• Gross Split PSCs: Simple, predictable, and upfront sharing of production without cost recovery claims. Attractive for investors seeking transparency, but the risk burden is heavier.
• Cost Recovery PSCs: Allowing contractors to recover their expenses before profit-sharing, making them suitable for high-risk projects. However, these models often require meticulous audits, leading to potential disputes.

This flexibility is a breath of fresh air for companies that previously felt locked into rigid models. The choice now lies in aligning contract structures with corporate strategy and risk appetite.

2. Joint Operation Models: Partnering with SOEs and Private Players

Not every investor wants to establish a wholly new entity in Indonesia. Recognizing this, Reg. 14/2025 makes joint operation models more attractive. Through this approach, foreign investors can work alongside state-owned enterprises (SOEs) or private Indonesian companies.

This is more than a legal formality—it is a strategic gateway. By partnering locally, foreign companies gain invaluable insights into local business culture, regulatory expectations, and community relations.

3. Enhanced Oil Recovery (EOR) Partnerships for Mature Fields

Indonesia’s older oil fields are far from exhausted, but tapping into remaining reserves requires advanced technology. EOR techniques such as CO₂ injection and chemical flooding are vital. Reg. 14/2025 actively promotes EOR partnerships, recognizing that without technological innovation, Indonesia’s production levels could stagnate.

For investors with advanced EOR expertise, this is a golden window of opportunity to enter Indonesia’s market.

4. Special Cooperation for Unconventional Oil and Gas

Global energy markets are increasingly looking toward unconventional resources. Indonesia, with vast reserves of shale gas and coal bed methane, is opening doors through Reg. 14/2025. While the technical challenges are higher, the long-term rewards are equally significant. Investors who dare to pioneer in this space will find themselves in a position of competitive advantage.

READ MORE:

RUPTL 2025–2034 Unveiled: What It Means for Indonesia’s Power & Legal Landscape

Legal Framework and Governance Structure

1. Laws, Regulations, and Government Oversight

The oil and gas industry functions within a comprehensive legal framework. Its primary foundation is Law No. 22/2001 on Oil and Gas, as amended, and further detailed through ministerial regulations, including Regulation No. 14/2025. This multi-tiered structure balances investor flexibility with the protection of national interests.

2. The Central Role of SKK Migas

SKK Migas, Indonesia’s upstream oil and gas regulatory body, remains at the center of governance. From contract approvals to monitoring performance, SKK Migas ensures projects remain aligned with regulatory and national goals. For investors, maintaining a cooperative relationship with SKK Migas is not just advisable—it is essential.

Opportunities for Foreign and Domestic Investors

1. Competitive Access to Oil and Gas Blocks

Reg. 14/2025 introduces greater transparency in licensing and bidding processes. Foreign investors now find it easier to participate in block tenders, increasing competition but also raising standards.

2. Fiscal Incentives and Tax Reliefs

Indonesia sweetens the deal with fiscal perks:

• Tax holidays for pioneering projects.
• Exemptions on import duties for exploration equipment.
• Investment credits for deep-water and frontier exploration.

These incentives show the government’s seriousness in attracting global capital.

3. Local Content Rules and Compliance Obligations

Yet, with opportunity comes responsibility. Investors must comply with local content rules (TKDN). This ensures that Indonesian suppliers, engineers, and communities benefit directly from projects. While compliance may raise initial costs, it strengthens social license to operate—an invaluable asset in Indonesia’s regulatory environment.

Challenges and Legal Risks in Implementation

1. Navigating Regulatory Uncertainty

Frequent regulatory adjustments are a hallmark of emerging markets. Investors in Indonesia must anticipate potential shifts in fiscal terms or compliance obligations. Without well-drafted stabilization clauses, profitability may suffer.

2. Meeting Environmental and Social Expectations

The world is watching how companies manage their environmental and social footprints. From AMDAL requirements to ESG standards, failure to comply could trigger community protests, legal penalties, and reputational damage.

3. Managing Contractual and Dispute Resolution Risks

Even with the best intentions, disputes may arise—often over cost recovery audits, tax obligations, or production targets. Reg. 14/2025 recognizes arbitration (both domestic and international) as a valid resolution method, but success depends on drafting contracts that anticipate and address potential conflicts.

Practical Commentary from Kusuma & Partners

Key Steps to Structuring Cooperation Agreements

Our law firm frequently advises clients on oil and gas cooperation structures. We recommend businesses:

• Clearly define fiscal terms to avoid future disputes.
• Build flexibility into contracts without sacrificing protections.
• Ensure compliance obligations are properly addressed from day one.

Risk Management and Investor Safeguards

We strongly advise incorporating:

• Stabilization clauses to mitigate regulatory risks.
• Arbitration clauses to ensure effective dispute resolution.
• Due diligence on partners to assess reputation, financial stability, and compliance history.

READ MORE:

Indonesia Private Equity: Opportunities and Challenges

Case Studies and Global Insights

Lessons Learned from Indonesia’s PSC Journey

Indonesia’s PSCs have historically faced cost recovery disputes and bureaucratic delays. Learning from these lessons, Reg. 14/2025 simplifies processes but does not eliminate the need for robust legal protections.

What Investors Can Learn from Global Models

Other nations such as Malaysia with its PETRONAS model and Qatar with its LNG partnerships demonstrate how clarity and investor-friendly policies drive long-term success. Indonesia is moving in that direction, but investors must adapt strategies to local realities.

Looking Ahead: The Future of Oil and Gas in Indonesia

Transition Toward Renewable Energy and Its Challenges

Indonesia is committed to renewable energy, but hydrocarbons will remain indispensable for at least the next two decades. Balancing renewable investment while maximizing oil and gas output is both a challenge and an opportunity.

How Regulation 14/2025 Balances Growth and Sustainability

Reg. 14/2025 is Indonesia’s balancing act: it invites investors with incentives while holding them accountable for sustainability. For businesses, this means opportunities exist—but only for those prepared to operate responsibly.

Conclusion

Indonesia’s oil and gas sector is evolving rapidly. While Reg. 14/2025 makes the playing field more attractive, success depends on understanding the fine print. Legal risks remain, but with the right advice, they can be transformed into manageable opportunities.

How We Can Help

We help businesses navigate Indonesia’s oil and gas sector under MoEMR Reg. 14/2025. From structuring PSCs to joint operations and regulatory compliance, we deliver strategies that protect and maximize your investments.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

Understanding the types of employee leave and rest period in Indonesia is critical for business owners, HR managers, investors, and employees. Whether you run a startup, a multinational, or are a prospective client seeking legal clarity, knowing the legal framework helps you maintain compliance, optimize workforce productivity, and protect employee welfare.

Imagine this: one of your most valuable employees submits a resignation letter. The reason? Not a higher salary offers from a competitor, but chronic burnout and a feeling that the company does not respect their right to disconnect and recharge. In today’s competitive business landscape, particularly in a vibrant market like Indonesia, your most significant asset is your human capital. How you manage their time off is not just a matter of legal compliance—it’s a direct reflection of your company’s culture, values, and long-term viability.

Let’s transform this complex legal requirement from a source of anxiety into a strategic advantage for your business.

Legal Framework Overview

Employee leave and rest periods in Indonesia stem from multiple legal sources:

• Law No. 13 of 2003 on Manpower, as amended by Law No. 6 of 2023 (which officially enacts the Government Regulation in Lieu of Law No. 2 of 2022 into permanent law).
• Government Regulation (PP) No. 35 of 2021, covering employment contracts, overtime, outsourcing, and termination.
• Ministerial regulations and company policies, which may offer more generous terms.

These standards define minimum requirements and ensure workers’ rights are respected while giving employers a clear compliance framework.

Types of Employee Leave in Indonesia

Below is a detailed breakdown of leave types under Indonesian law:

1. Annual Leave (Cuti Tahunan)

Under Article 79 of the Manpower Law, employees are entitled to 12 days of paid annual leave after completing 12 months of continuous service. Employers may set scheduling rules but must honor legal entitlements. Create clear, written policies to avoid disputes over unused leave or forced forfeiture.

2. Leave for Public Holidays (Libur Nasional) and Collective Leave (Cuti Bersama)

Announced annually via presidential decree/ministerial decree and public holidays provide full paid leave, however collective leave is depending on the company policies. Collective leave can be applied with cutting the annual leave or not and all depend on the companies’ policies. Employers must comply as soon as they’re declared.

3. Sick Leave (Cuti Sakit)

Per Article 93 of the Manpower Law, employees with medical certification are entitled to paid sick leave with a tapered payment: 100% salary for 4 months, 75% for the next 4 months, then 50%, then 25% until termination. Implement a medical verification process to manage validity, protections, and potential abuses.

4. Maternity Leave

Maternity Leave (Cuti Melahirkan): Three months paid—1.5 months before birth, 1.5 months after.

5. Miscarriage Leave

1,5 months given for miscarriage leave.

6. Special Leave (Cuti Khusus)

• Marriage Leave (Cuti Menikah)   : 3 days
• Paternity Leave (Cuti Ayah)         : 2 days
• Spouse’s or child/parent’s death : 2 days
• Parent in a house death              : 1 day
• Son/daughter Marriage               : 2 days
• Circumcision/baptism                  : 2 days

7. Menstruation Leave

Female workers who feel pain on the first day and second day of their menstruation are entitled to not come to work.

8. Religious Obligation Leave (Cuti Menunaikan Ibadah)

Employees are entitled to paid leave to perform major religious pilgrimages, such as the Hajj for Muslims.

9. Long Service Leave (Cuti Besar)

While not mandatory, some companies offer this leave as a reward for long-term service:

• Usually given after 6 or more years of service.
• Duration and pay depend on the company’s policies.

Employers do not have to provide extended types of leave (e.g., unpaid, study, sabbatical), but when they offer them and document them properly, they improve retention.

READ MORE:

Remote Work in Indonesia: Legal Framework, Tax Implications, and Best Practices for Businesses

Rest Periods in Indonesia

Labor laws also guarantee rest break protections:

1. Daily Rest (Istirahat Harian)

A 30-minute paid break is mandatory after every 4 hours of continuous work. Typically, companies allow 1 hour for lunch breaks.

2. Weekly Rest (Istirahat Mingguan)

Employees are entitled to:

• 2 days of paid rest in a 5-day work week
• 1 day of paid rest in a 6-day work week

3. Overtime and Post-Overtime Rest

Under PP No. 35/2021, employers must pay overtime at mandated rates and ensure sufficient rest following overtime shifts.

READ MORE:

Fraud and Misrepresentation in Commercial Deals: Legal Protections for Businesses in Indonesia

Common Challenges and How to Overcome Them

Many companies in Indonesia face challenges such as:

• Misunderstanding leave entitlements: Some employers confuse unpaid leave and unpaid rest days.
• Managing leave during peak business periods: Balancing operational needs with employee rest.
• Sick leave abuse concerns: Employers worry about false sick leave claims.

It is advisable for you to conduct a regular training for HR, a fair grievance procedure, and consultation with legal expert mitigate these issues.

The High Stakes of Non-Compliance

What happens if you get it wrong? The risks are multifaceted:

• Industrial Relations Disputes: An employee can file a claim with the Industrial Relations Court (Pengadilan Hubungan Industrial). These disputes are time-consuming, expensive, and public, damaging your reputation.
• Claims for Back Wages: If you denied rightful leave, a court may order you to pay the employee’s wages for that period, plus potential penalties.
• Government Sanctions: The Ministry of Manpower can conduct audits and impose administrative sanctions and fines.
• Reputational Damage: In the age of Glassdoor and social media, companies that grind their employees and deny them time off damage their reputation, drive high turnover, and struggle to recruit the best talent.

Practical Commentary from Kusuma & Partners

Managing the types of employee leave and rest period in Indonesia requires a balanced approach.

1. Compliance: Complying with labor laws avoids fines and legal disputes.
2. Audit Your Current Policy: Compare your existing HR manual against the minimum standards outlined above.
3. Documentation: Maintain thorough records on leave applications and approvals.
4. Policy Clarity: Ensure company policies are transparent and communicated.
5. Employee Well-being: Foster a culture that values rest, boosting loyalty and reducing absenteeism.
6. Implement a Robust Tracking System: Use reliable HR software or systems to accurately track accrual and usage of all Types of Employee Leave and Rest Period in Indonesia.
7. Flexibility: Adapt leave policies where possible to stay competitive.
8. Apply Policies Consistently: Inconsistency in application is a fast track to claims of discrimination and unfair treatment.

Conclusion

Understanding the types of employee leave and rest period in Indonesia is not just about legal compliance—it’s a strategic business imperative. It is about building a respectful, sustainable, and productive work environment. A well-rested and valued employee is more engaged, more loyal, and more innovative. By mastering the complexities of the Types of Employee Leave and Rest Period in Indonesia, you do more than avoid legal trouble, you build a foundation for long-term business success and become an employer of choice in one of the world’s most exciting economies.

How We Can Help

We stand ready to guide you step by step, reach out to Kusuma & Partners Law Firm today to ensure your company is fully compliant and protected under Indonesia regulation.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

Remote work in Indonesia has become more than a trend—it’s now a fundamental part of how businesses operate. For business owners, companies, investors, and professionals, understanding the legal framework and practical implications of remote work in Indonesia is essential. In this article, we will delve into the evolving legal environment, highlight tax considerations, explore challenges, and provide actionable insights you need to adapt and thrive in this new work paradigm.

The global workforce has undergone a seismic shift in recent years. What began as a response to the COVID-19 pandemic is now a long-term business strategy. Remote work in Indonesia is no longer a temporary fix—it’s becoming the norm for many industries, from IT and fintech to marketing and consulting. Indonesia presents huge potential for remote work, given its large tech-savvy workforce and growing digital infrastructure. Yet, the complexity of labor laws and tax rules requires careful navigation. This article breaks these down in a clear, approachable way so you, as an employer or investor, can make informed decisions to optimize your remote workforce.

Legal Basis: What Governs Remote Work in Indonesia?

There is no “Remote Work Act” in Indonesia. Instead, remote work in Indonesia falls under existing labor and employment regulations:

• Law No. 13 of 2003 (Manpower Law) – Amended by the Omnibus Law on Job Creation (Law No. 11 of 2020, further revised by Law No. 6 of 2023).
• Government Regulations (GR 35/2021) – Cover working hours, overtime, leave, and termination procedures.
• Law No. 24 of 2011 (BPJS Law) – Mandates social security contributions, even for remote workers.
• Law No. 27 of 2022 (Personal Data Protection Law / PDPL) – Regulates employee and client data security.
• Immigration Law No. 6 of 2011 – Covers foreign workers and digital nomads.

These form the backbone of compliance for companies and employees working remotely.

Employment Contracts and Policies for Remote Workers

Employers should update employment agreements to reflect remote work conditions. A well-drafted remote work contract should include:

• Work Location: Home-based, co-working space, or hybrid model.
• Working Hours: Standard 40 hours/week (5 or 6 days). Any additional hours = overtime.
• Equipment & Costs: Clarify who provides laptops, internet, and work tools.
• BPJS & Benefits: Employers remain responsible for enrolling workers in BPJS Kesehatan and Ketenagakerjaan.
• Data Protection: Workers must comply with PDPL obligations when handling sensitive data remotely.
• Termination: Remote status does not limit rights to severance pay or dispute settlement.

Without these clear provisions, disputes can arise around overtime, reimbursement, or liability for accidents at home.

Employee Rights: Wages, Hours, and Social Protection

Under Indonesian labor law, remote employees enjoy the same rights as office workers:

• Minimum Wages – Employers must comply with provincial minimum wages.
• Overtime Pay – Required for work beyond legal working hours.
• Annual Leave – At least 12 days per year, plus national holidays.
• BPJS Enrolment – Mandatory contributions for health and social security.
• Termination Protections – Severance, service appreciation, and compensation must be paid in accordance with GR 35/2021.

Employers cannot use remote work as a loophole to cut costs by avoiding statutory obligations.

READ MORE:

Workplace Compliance in Indonesia: Legal Guide for Businesses

Challenges in Implementing Remote Work in Indonesia

While attractive, remote work in Indonesia presents unique challenges:

• Unclear Legal Framework

Since no single law governs remote work, companies face uncertainty on how far obligations extend (e.g., occupational health and safety for home offices).

• Infrastructure and Connectivity Issues

Indonesia’s archipelagic geography means inconsistent internet quality across regions, affecting remote work productivity. Businesses must consider geographic location and possibly invest in employee support like subsidized internet connections.

• Labor Disputes and Enforcement

Disputes regarding work hours, overtime, and workplace safety extend into remote arrangements. The lack of physical supervision may lead to conflicts over performance and accountability. Clearly drafted remote work policies are crucial.

• Monitoring & Productivity

Employers struggle to measure performance without resorting to surveillance tools—which may violate privacy rules under PDPL.

• Tax Complexity

Foreign workers in Indonesia may accidentally trigger tax residency by staying more than 183 days in a calendar year. Companies hiring remote workers risk creating a Permanent Establishment (BUT) and becoming liable for corporate taxes.

• Cybersecurity Risks

Remote setups increase vulnerability to hacking, phishing, and data leaks. Employers must invest in VPNs, encryption, and training.

• Cultural & Communication Barriers

Indonesia’s workforce values hierarchy and in-person interaction. Remote setups may weaken cohesion and trust if not managed properly.

• Immigration Restrictions

Foreign remote workers cannot simply use tourist visas for long-term work. Misuse of visas risks deportation or fines.

These challenges require strategic planning, legal clarity, and cultural adaptation.

Tax Considerations for Remote Work in Indonesia

Tax is often the most overlooked—but most critical—aspect of remote work.

• For Employees (Individuals)

If an employee resides in Indonesia for more than 183 days in 12 months, they become an Indonesian tax resident. Tax residents are subject to progressive personal income tax (PPh 21) ranging from 5% to 35%. Employers must withhold PPh 21 for employees, even if they work remotely.

• For Employers (Companies)

Hiring Indonesian workers remotely requires withholding PPh 21 and making BPJS contributions. Foreign companies employing Indonesian staff risk creating a Permanent Establishment (BUT) under Indonesian tax law—liable for corporate income tax (PPh Badan at 22%). Companies paying foreign workers must evaluate whether withholding obligations apply under Indonesian law or tax treaties.

• For Freelancers / Contractors

Independent contractors must register for a Tax ID (NPWP) and report income under PPh 21 or final tax schemes. Failure to comply risks audits and penalties.

• VAT (Value Added Tax)

Certain remote services—especially digital or IT services provided cross-border—may attract VAT obligations under the 2022 regulation on cross-border digital services.

Health, Safety, and Right to Disconnect

Even in remote setups, companies must ensure:

• Ergonomic safety for home offices.
• Mental health policies to prevent burnout.
• Respect for boundaries—the right to disconnect after working hours.

Ignoring these risks leads to liability under labor law or potential workplace disputes.

READ MORE:

Tax Holiday Indonesia: A Guide for Businesses

Data Privacy and Cybersecurity in Remote Work

Indonesia’s Personal Data Protection Law (PDPL, Law No. 27/2022) impacts remote work due to increased online communication and data transfer risks. Employers must ensure compliance with data privacy standards, implement secure systems, and train employees to safeguard sensitive information effectively. With the Personal Data Protection Law (PDPL) now enforced, employers must implement:

• VPN and secure access for employees.
• Encryption and multi-factor authentication.
• Employee training against phishing and fraud.
• Strict data processing agreements.

Violations of PDPL can lead to fines up to 2% of annual revenue or even criminal liability.

Foreign Remote Workers and Immigration Compliance

Indonesia is a popular hub for digital nomads—but immigration law is strict.

• Tourist Visa: Not valid for work.
• Business Visa (B211A): Allows meetings, not employment.
• KITAS (Limited Stay Permit): Required for formal employment with sponsorship.
• E33G Remote Worker Visa (announced but limited): Aimed at digital nomads working for foreign companies while living in Indonesia.

Foreign workers should consult legal experts to avoid overstaying or illegal employment classifications.

Future Outlook: Remote Work in Indonesia

Trends indicate that:

• Hybrid models will dominate (part office, part remote).
• More foreign companies will hire Indonesian talent remotely.
• The government may introduce clearer remote work regulations, including a digital nomad visa and updated tax rules.

This means opportunities but also risks for investors and employers who don’t plan ahead.

Practical Commentary from Kusuma & Partners

At Kusuma & Partners, we see remote work as a double-edged sword. Done right, it unlocks global talent and flexibility. Done wrong, it leads to tax risks, labor disputes, and immigration penalties.

We assist client clients with:

• Drafting remote work policies and compliant employment contracts.
• Structuring tax obligations (PPh 21, PPh Badan, VAT) efficiently.
• Advising on Permanent Establishment (BUT) risks for foreign employers.
• Ensuring BPJS enrolment and social protection for employees.
• Guiding visa and immigration compliance for foreign workers.
• Conducting data privacy audits to align with PDPL requirements.

We combine legal precision with human understanding—helping businesses stay safe, competitive, and trusted.

Conclusion

Remote work in Indonesia is more than just a trend—it’s a transformation. But success requires clarity on labor rights, tax duties, immigration compliance, and cultural adaptation.

At Kusuma & Partners Law Firm, we help businesses, investors, and remote professionals turn legal complexity into opportunity.

How We Can Help

We stand ready to guide you, contact us to get legal advice, contract drafting, tax planning, and dispute resolution services tailored for remote work compliance and business success.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

Indonesia is standing at the crossroads of its energy journey. The release of RUPTL 2025–2034is not just a policy announcement; it is a bold declaration of how the country envisions powering its economy for the next decade. Unlike many previous roadmaps, this one comes at a time when the world is demanding faster transitions to clean energy, when investors are scrutinizing ESG commitments, and when communities are becoming more vocal about their environmental rights.

For business owners, companies, and investors, this roadmap is not something to ignore. It signals where capital will flow, what regulations will apply, and where risks might arise. Put simply, if you are considering investing in Indonesia’s power sector, you must understand RUPTL 2025–2034. Ignoring it would be like sailing without a compass in uncertain seas.

Understanding RUPTL 2025–2034

1. What is RUPTL?

RUPTL stands for Rencana Usaha Penyediaan Tenaga Listrik—the Electricity Supply Business Plan. Issued by PT PLN (Perusahaan Listrik Negara) with approval from the Ministry of Energy and Mineral Resources (MEMR), it serves as the country’s official energy roadmap for the next decade. Think of it as a blueprint, not just for PT PLN, but for the entire power sector including private and foreign investors.

It covers everything: projected demand growth, where new power plants will be built, how transmission lines will expand, and how Indonesia will diversify its energy mix. Without RUPTL, both investors and regulators would be left guessing.

2. The Significance of the 2025–2034 Roadmap

So, what makes this version different? The 2025–2034 RUPTL is often called the “greenest” roadmap in Indonesia’s history. For the first time, renewables take center stage, supported by commitments to reduce coal dependency and reach carbon neutrality. This shift is monumental; it reflects both Indonesia’s international climate commitments and its domestic push for sustainable growth.

For investors, it is a golden opportunity: clarity on policy direction, signals of government support, and alignment with global financing trends. Yet, it also raises the bar for compliance. Companies must now navigate stricter environmental rules, more complex community engagement, and legal scrutiny on sustainability.

Key Energy Targets in RUPTL 2025–2034

1. Renewable Energy Expansion

One of the most eye-catching features of RUPTL 2025–2034 is the bold renewable energy targets. Solar power, long underutilized in Indonesia, is projected to expand rapidly with large-scale solar farms. Wind power, particularly in Sulawesi and Nusa Tenggara, will also see significant growth. Hydropower and geothermal—where Indonesia has world-class potential—are expected to dominate new baseload energy sources.

This expansion, however, does not come without challenges. Land acquisition for solar farms, environmental licensing for hydropower, and contractual risks in geothermal projects are real legal hurdles. For investors, success will not only depend on financing but on how well they secure permits, comply with environmental law, and manage community relations.

2. Fossil Fuel Transition

Coal has long been king in Indonesia’s power sector, supplying more than half of the country’s electricity. But in this RUPTL, the writing is on the wall: coal will slowly but surely decline. The government plans early retirement of coal plants and replacement with cleaner alternatives such as gas and renewables.

This raises difficult legal and financial questions. What happens to existing Power Purchase Agreements (PPAs) signed with PT PLN? How will compensation be handled for early closures? Investors and contractors must be prepared to renegotiate contracts, manage force majeure risks, and deal with potential arbitration disputes.

3. Electrification & Grid Development

Indonesia also wants to achieve nearly 100% electrification by 2034. To make that happen, massive investments in transmission and distribution networks are planned, especially in remote and eastern regions. But transmission projects are often controversial—they involve extensive land acquisition, which is governed by Law No. 2/2012 on Land Procurement for Public Interest.

This is where legal complexity hits hardest: disputes with landowners, indigenous land claims, and environmental objections can delay or derail projects. For companies, it’s not enough to just build towers and cables—you need a robust legal strategy to secure land rights fairly and transparently.

READ MORE:

Indonesia Renewable Energy Law: Overview of Laws & Key Regulations (2025)

Legal Framework Behind RUPTL 2025–2034

1. The Electricity Law (Law No. 30/2009)

The Electricity Law remains the backbone of Indonesia’s energy legal regime. It regulates business permits (IUPTL), tariffs, and consumer protections. Any investor entering the market must engage with this framework. A failure to comply—say, by skipping a licensing step or underestimating local government requirements—could lead to costly delays or even revocation of permits.

2. Energy Mix Regulations & Government Commitments

Indonesia has committed under the Paris Agreement and National Energy Policy (KEN) to achieve a more balanced energy mix. To operationalize this, Presidential Regulation No. 112/2022 sets out renewable energy tariff mechanisms, phasing out coal subsidies, and mandating PT PLN to prioritize renewables in procurement.

For businesses, this regulation is both an opportunity and a warning. While tariffs are becoming more favorable for renewables, regulators are also watching closely. Non-compliance with technical or sustainability obligations can result in heavy penalties.

3. Investment Licensing and Land Acquisition Issues

The Omnibus Law (Law No. 6/2023) has simplified investment licensing, but energy projects remain under strict scrutiny. Land acquisition remains one of the most challenging aspects of infrastructure development. Disputes often arise under Law No. 5/1960 (Basic Agrarian Law), particularly when indigenous land rights are involved.

Investors must budget not just for land costs, but also for potential litigation and compensation negotiations. Too many projects in Indonesia have been delayed because investors underestimated the complexity of acquiring land legally and ethically.

Implications for Investors and Companies

1. Opportunities in Renewable Projects

With RUPTL 2025–2034, the Indonesian government is essentially opening the door for billions in renewable investment. Investors can join Independent Power Producer (IPP) projects, engage in EPC contracts, or explore Public-Private Partnership (PPP) models. Additionally, green financing instruments, such as sustainability-linked loans and green bonds, are increasingly being channeled into these projects.

The message is clear: the opportunity is massive, but only those who can align financial ambition with legal and environmental responsibility will succeed.

2. Challenges in Legal Compliance

At the same time, Indonesia remains a complex legal environment. Overlapping permits, local government discretion, and frequent regulatory changes pose real risks. A single missed compliance step—such as failing to complete an AMDAL (Environmental Impact Assessment)—can halt a project entirely. Companies must take compliance not as a burden, but as a risk management strategy to protect investments.

3. Public-Private Partnership (PPP) Models

PPP is a rising trend in Indonesia’s infrastructure. Under PPP, risks are shared between the government and private investors. But without careful legal drafting, PPP projects can quickly turn into disputes. Key issues include risk allocation, termination rights, dispute resolution mechanisms, and government guarantees. Companies need to negotiate contracts carefully, always with a legal advisor by their side.

READ MORE:

How to Set Up a Joint Venture Company in Indonesia

Environmental & Social Considerations

1. Environmental Law and ESG Obligations

Indonesia’s Law No. 32/2009 on Environmental Protection mandates strict environmental licensing, including AMDAL for large projects. Beyond legal obligations, the global business community is now demanding ESG compliance—environmental, social, and governance practices that go beyond the minimum law.

Failure to comply not only risks legal sanctions but also loss of investor confidence. Many global funds will not invest in projects that lack ESG safeguards. This makes compliance not just a legal necessity but also a business survival strategy.

2. Community Engagement & Land Rights

Perhaps the most sensitive issue in Indonesia’s energy projects is community engagement. Land acquisition can easily spark protests, lawsuits, and reputational crises if handled poorly. The Constitutional Court Decision No. 35/2012 recognized indigenous land rights, meaning companies must go beyond mere compensation—they must respect and engage communities genuinely.

For companies, this is not just about avoiding lawsuits; it’s about building long-term trust and project sustainability. A company that works with local communities will enjoy smoother operations and stronger social legitimacy.

Practical Commentary from Kusuma & Partners

At Kusuma & Partners, we view RUPTL 2025–2034 as both a promise and a challenge. On one hand, it promises unprecedented growth in renewable investments, offering opportunities for foreign and domestic investors alike. On the other, it challenges businesses to navigate Indonesia’s complex legal and social environment.

Our practical insights:

• Never cut corners on legal due diligence. What looks like a small oversight today can turn into a multimillion-dollar dispute tomorrow.
• Negotiate contracts with foresight. Power projects span decades; contracts must anticipate future risks, not just today’s needs.
• Engage communities early. Waiting until conflict arises is too late. Proactive engagement prevents costly delays.
• Integrate ESG into your business. This is no longer optional; it is the standard for global investors.

The Future of Indonesia’s Energy Landscape

The RUPTL 2025–2034 marks the beginning of a new era. If implemented well, Indonesia will move from a coal-dependent economy to a sustainable energy leader in Southeast Asia. For companies, this is both a challenge and an invitation: a challenge to comply with complex legal frameworks, and an invitation to be part of Indonesia’s sustainable growth story.

The future is clear: those who adapt quickly, respect the law, and embrace sustainability will thrive. Those who resist change risk being left behind.

Conclusion

The journey of RUPTL 2025–2034 is more than just about electricity—it is about Indonesia’s economic future. Businesses that align with this vision can unlock opportunities, while those that ignore it may face risks.

How We Can Help

At Kusuma & Partners Law Firm, we help investors, companies, and entrepreneurs navigate the legal and regulatory complexities of Indonesia’s energy sector. With our deep expertise, you can secure your investment, minimize risks, and focus on building a sustainable future. Contact us today to discuss how we can support your project.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

When global investors look at Southeast Asia, Indonesia always stands out as a powerhouse. With over 270 million people, a growing young workforce, and rapid digital transformation, the country represents a goldmine for long-term investments. For private equity firms, Indonesia is not just another emerging market; it is the beating heart of the region, combining scale, resilience, and untapped opportunities.

Yet, investing in Indonesia is not without its challenges. Beyond the promise of high returns lies a complex regulatory environment, cultural nuances, and governance risks that can make or break a deal. This is why understanding the Indonesia private equity landscape requires more than financial acumen — it demands legal clarity, cultural sensitivity, and strategic foresight.

Understanding Private Equity in Indonesia

1. Definition and Key Characteristics

Private equity is more than just injecting money into a business. At its core, it is about partnership, influence, and transformation. In Indonesia, private equity investors don’t merely provide capital; they become active partners in shaping strategy, strengthening governance, and driving growth. Typically, investments involve medium to long-term horizons, ranging from five to ten years, with the goal of scaling businesses or turning around underperforming assets.

What makes Indonesia private equity unique is the balance between risk and opportunity. Investors are attracted by double-digit growth potential but must also navigate uncertainties like regulatory reforms, tax exposure, and governance standards. This duality — high risk and high reward — is precisely what defines the private equity market in Indonesia today.

2. Private Equity vs Venture Capital

Although often used interchangeably, private equity and venture capital play distinct roles in Indonesia’s investment ecosystem. Venture capital tends to support early-stage startups, betting on disruptive innovations in technology, fintech, or creative industries. In contrast, private equity targets more mature businesses that already have revenue streams, market presence, and proven scalability.

For example, while a venture capitalist may fund a young fintech startup in Jakarta, a private equity firm might acquire a majority stake in a well-established healthcare group or renewable energy company. Both fuel Indonesia’s growth, but private equity’s involvement is deeper, often reshaping entire industries.

Indonesia’s Economic Landscape and Investment Potential

1. Growth Sectors Attracting Private Equity

Indonesia’s economy is a story of resilience. Even amidst global uncertainties, the country continues to attract private equity capital in key sectors:

• Infrastructure and Real Estate: Urbanization and government-backed megaprojects such as toll roads, airports, and seaports create vast opportunities for PE investors.
• Renewable Energy: With Indonesia’s commitment to net-zero emissions by 2060, the renewable sector — from solar farms to hydropower — is ripe for private equity involvement.
• Technology and Fintech: Indonesia’s digital economy is expected to surpass USD 130 billion by 2025. Private equity firms are increasingly funding growth-stage tech companies beyond the startup phase.
• Healthcare and Education: Rising middle-class demand for quality healthcare and education makes these sectors particularly attractive.

Each of these industries reflects Indonesia’s demographic advantage and government policy priorities. As investors seek stable yet high-growth opportunities, Indonesia private equity naturally gravitates toward these areas.

2. Government Support and Investment Climate

The government has made deliberate efforts to transform Indonesia into a more investment-friendly environment. Through reforms such as the Omnibus Law on Job Creation and the Positive Investment List, foreign investors now face fewer restrictions. This shift reflects Indonesia’s recognition that sustainable growth cannot rely solely on domestic capital — private equity is needed to bridge the gap.

Moreover, the creation of the Indonesia Investment Authority (INA), a sovereign wealth fund, further strengthens investor confidence. INA often partners with global PE firms in infrastructure and digital sectors, sending a clear signal that Indonesia is open for business. In this evolving landscape, private equity investors find not just opportunity, but also government alignment.

READ MORE:

Leveraging Convertible Note for Business Growth in Indonesia

Legal Framework Governing Private Equity in Indonesia

1. Indonesian Company Law and OJK Regulations

At the heart of every investment lies the legal framework. In Indonesia, private equity is primarily governed by Law No. 40 of 2007 on Limited Liability Companies (Company Law). This legislation dictates shareholder rights, board duties, and corporate governance structures. Investors need to understand that while Indonesian law provides flexibility, it also imposes fiduciary obligations on directors and commissioners that cannot be overlooked.

Additionally, the Otoritas Jasa Keuangan (OJK) — Indonesia’s Financial Services Authority — regulates fund management, disclosure, and financial reporting standards. OJK’s oversight ensures transparency but also requires compliance, which can be challenging for foreign investors unfamiliar with local reporting obligations.

2. Foreign Direct Investment Rules and the Positive Investment List

Foreign ownership is no longer as restricted as it once was, thanks to the Positive Investment List under Presidential Regulation No. 10 of 2021. Unlike the old Negative Investment List, this regulation liberalized many sectors, opening them to 100% foreign ownership.

However, sensitive industries — such as broadcasting, alcohol production, and certain education sectors — still impose foreign ownership caps. For PE firms, this means careful structuring through joint ventures or nominee arrangements to comply with the law. In practice, navigating this regulation often requires the assistance of experienced local counsel.

3. Taxation and Regulatory Compliance

Private equity deals in Indonesia are not just about valuations and negotiations — taxation is often the hidden factor that determines success or failure. Common tax considerations include:

• Corporate Income Tax at 22%.
• Capital Gains Tax, especially on share disposals.
• Withholding Taxes on dividends, interest, and royalties.
• Double Tax Treaties, which can significantly reduce cross-border tax exposure.

Failure to plan tax structures from the outset can result in costly disputes later. That’s why tax due diligence is inseparable from legal due diligence in Indonesia private equity transactions.

Structuring Private Equity Deals in Indonesia

1. Common Deal Structures

Private equity investors in Indonesia typically use three primary structures:

1. Share Purchase Agreements (SPA) — direct acquisition of company shares.
2. Joint Ventures (JV) — combining foreign capital with local expertise.
3. Convertible Instruments — debt that converts to equity, providing flexibility and risk management.

Each structure has advantages. SPAs provide control, JVs mitigate regulatory risks, and convertibles offer an exit if equity ownership becomes too restrictive. The right choice depends on sector, ownership restrictions, and long-term strategy.

2. Due Diligence Considerations

Due diligence in Indonesia is not just a checklist — it’s a risk prevention mechanism. Key areas include:

• Corporate Documents: Verifying shareholder structure and Articles of Association.
• Licensing: Ensuring business permits are valid and sector-appropriate.
• Tax Health Check: Identifying hidden liabilities.
• Employment Issues: Compliance with labor laws, including severance obligations.
• Environmental Risks: Especially critical in natural-resource sectors.

In our experience at Kusuma & Partners, skipping thorough due diligence is one of the biggest mistakes foreign investors make. It’s like entering a marathon without checking your shoes — costly surprises are almost guaranteed.

Key Challenges in Indonesia Private Equity

1. Regulatory Hurdles and Licensing

While Indonesia has made progress in simplifying regulations, the reality on the ground can be complex. Multiple ministries, overlapping rules, and evolving requirements create uncertainty. For private equity firms, this means that timelines may extend, costs may rise, and deal certainty may be challenged.

2. Cultural and Corporate Governance Issues

Beyond regulations, culture plays a crucial role. Many Indonesian businesses are family-owned, where decisions are often influenced by relationships rather than corporate logic. Private equity firms may encounter resistance to governance changes or transparency requirements. Navigating this requires patience, respect for local traditions, and clear communication.

3. Exit Strategies in Indonesia

An investment is only as good as its exit. In Indonesia, exits are still limited compared to mature markets. While trade sales and secondary sales are common, IPO exits remain relatively rare due to market constraints. Investors must therefore plan exit routes early, aligning with the target company’s long-term trajectory.

READ MORE:

How to Set Up a Joint Venture Company in Indonesia

Practical Commentary from Kusuma & Partners

1. Common Mistakes Investors Make

At Kusuma & Partners, we frequently see investors underestimate:

• The complexity of licensing in highly regulated sectors.
• The tax impact of poor structuring.
• The cultural nuances of negotiation with local stakeholders.

2. Strategic Legal Advice for Smooth Transactions

Our approach is simple yet strategic:

• Start with Legal Clarity: Identify potential red flags early.
• Design for Flexibility: Anticipate regulatory changes.
• Prioritize Governance: Introduce structures that balance control and trust.
• Plan the Exit Early: Don’t wait until year five to think about leaving.

By combining legal expertise with local insight, we help investors avoid pitfalls and maximize returns in Indonesia private equity transactions.

Future Outlook of Private Equity in Indonesia

Looking ahead, the private equity market in Indonesia is expected to flourish. The combination of demographic strength, digital transformation, and government reforms creates an ideal investment environment. Global funds are already increasing exposure to Indonesia, signalling confidence in its trajectory.

As the country pushes for sustainable development, renewable energy and ESG (Environmental, Social, and Governance) investments will likely dominate the next wave of private equity deals. For investors willing to navigate complexity with the right legal partner, the future in Indonesia looks exceptionally bright.

Conclusion

Indonesia private equity is not just an investment strategy; it is a gateway into one of the fastest-growing economies in the world. With careful planning, robust due diligence, and strong legal support, investors can turn opportunities into long-term success.

How We Can Help

At Kusuma & Partners Law Firm, we pride ourselves on guiding investors through the complexities of Indonesia’s private equity market. Whether you are considering your first investment or expanding your portfolio, our team is ready to protect your interests and unlock opportunities.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

If you are a business owner, investor, or company looking to expand into Southeast Asia, one of the first questions you might ask is: “What incentives can Indonesia offer to support my investment?” The answer often leads to one powerful policy: Tax Holiday Indonesia.

This incentive, introduced by the Indonesian government, is designed to reduce or even eliminate corporate income tax for a certain number of years. Imagine being able to channel what you would normally pay in taxes back into your company—whether for reinvestment, scaling production, or strengthening your working capital. That is precisely the opportunity a tax holiday creates.

Transitioning from theory to reality, however, requires understanding the legal framework, eligibility, and application process. And while the benefits are highly attractive, the process involves compliance, strategy, and foresight. Let’s explore what makes Tax Holiday Indonesia a game-changer and why investors cannot afford to ignore it.

Understanding the Concept of Tax Holiday

1. Definition under Indonesian Tax Law

At its core, a tax holiday is a temporary exemption from corporate income tax granted by the government to new investors. Under Indonesian tax law, it applies to companies classified as operating in pioneer industries sectors that drive economic transformation. Unlike tax allowances, which provide partial deductions, Tax Holiday Indonesia offers full or near-total relief, making it one of the most generous incentives in the region.

From a legal standpoint, this program is not a loophole, but a legitimate policy tool designed to balance national interests with private sector profitability.

2. Objectives of Tax Holiday Indonesia

Why does Indonesia offer such a generous incentive? The objectives are both strategic and forward-looking:

• Attracting large-scale investments that can stimulate job creation and technology transfer.
• Strengthening Indonesia’s industrial base to move beyond raw commodity exports.
• Encouraging sustainable growth by prioritizing green and renewable industries.

In other words, Tax Holiday Indonesia is not just about reducing taxes, it is a carefully designed mechanism to position the country as a global investment hub.

Legal Framework Governing Tax Holiday Indonesia

1. Laws and Regulations

Legal certainty is crucial for investors, and Indonesia’s tax holiday framework is firmly rooted in law. The main instruments include:

• Income Tax Law (UU PPh), which forms the legal backbone.
• Law No. 25 of 2007 on Investment, which guarantees equal treatment for foreign investors.
• Minister of Finance Regulations (PMK), which define specific industries, investment thresholds, and technical procedures.
• BKPM (Investment Coordinating Board) rules, ensuring integration between licensing and tax incentives.

By anchoring the program in statute and ministerial regulations, Indonesia assures investors that Tax Holiday Indonesia is not an arbitrary incentive, but a consistent national policy.

2. Government Policies and Updates

Indonesia’s tax landscape is dynamic. The government frequently updates tax holiday rules to reflect national priorities. For example, while earlier versions focused heavily on base industries like oil refining and metals, recent updates include digital economy, healthcare, and green energy.

This flexibility shows the government’s responsiveness to global trends. It also signals to investors that Indonesia is not standing still—it is adapting its tax policy to ensure competitiveness in a rapidly changing global economy.

READ MORE:

Global Minimum Tax Implementation in Indonesia: What Businesses Should Know

Eligibility Criteria for Tax Holiday Indonesia

1. Qualifying Sectors and Industries

Not every business can enjoy Tax Holiday Indonesia. Only sectors considered “pioneer industries” qualify. These typically include:

• Natural resource downstreaming (metals, petrochemicals, refineries).
• Renewable energy and green technology.
• Infrastructure and transportation (toll roads, airports, seaports).
• Information technology and digital services.
• High-tech industries such as aerospace or pharmaceuticals.

By focusing on these industries, Indonesia ensures that tax incentives align with long-term development goals.

2. Investment Thresholds and Requirements

The government sets a minimum capital investment, commonly starting at IDR 500 billion. Beyond that, investors must prove their projects bring tangible benefits: job opportunities, knowledge transfer, environmental responsibility, and value-added production.

Another key requirement is that applicants must be new taxpayers. Expansions of existing companies do not qualify. This ensures the incentive attracts fresh investment, not merely restructured operations seeking tax breaks.

Application Process for Tax Holiday Indonesia

1. Procedures

The application process may seem complex, but it can be simplified into four stages:

• Pre-consultation with BKPM and the Ministry of Finance – early discussions clarify whether your project aligns with government priorities.
• Submission of Application – this includes an investment plan, corporate documents, and feasibility studies.
• Evaluation and Recommendation – BKPM reviews and, if satisfied, submits a recommendation to the Ministry of Finance.
• Ministerial Approval – the Ministry of Finance issues a formal decree granting the tax holiday.

By following these steps, investors demonstrate seriousness and compliance with Indonesian law.

2. Required Documents and Approvals

Applicants must prepare:

• Articles of association and incorporation deeds.
• Business identification number through OSS (Online Single Submission).
• Environmental approvals (AMDAL).
• Financial projections demonstrating economic contribution.

This rigorous documentation requirement ensures only credible investors benefit from Tax Holiday Indonesia.

Duration and Scope of Tax Holiday Benefits

1. Tax Exemptions and Reductions

Depending on investment size, companies can enjoy corporate income tax exemptions for:

• 5 years up to 20 years for qualifying industries.
• Post-exemption, a 50% reduction for another two years may apply.

This structure is designed to provide both immediate relief and long-term benefits, ensuring businesses remain competitive beyond the holiday period.

2. Possible Extensions and Conditions

While extensions are rare, they may be granted for projects of exceptional national importance. However, strict compliance with reporting requirements is non-negotiable. Failure to meet obligations may result in withdrawal of benefits.

This balance ensures the government rewards investors who genuinely contribute to the economy while protecting against misuse.

Challenges and Common Pitfalls in Tax Holiday Applications

1. Legal and Compliance Issues

Regulations around Tax Holiday Indonesia are frequently updated. Investors often stumble due to:

• Misinterpreting eligibility criteria.
• Weak environmental or labor compliance.
• Delayed reporting obligations.

To mitigate these risks, investors should engage legal experts from the start.

2. Practical Barriers for Foreign Investors

Foreign businesses often face hurdles such as:

• Lengthy bureaucratic procedures.
• Difficulty navigating Indonesian legal terminology.
• Confusion between tax holiday and other schemes like tax allowance or super deduction R&D.

These challenges highlight why local legal and tax advisors are indispensable.

READ MORE:

New Tax Audit Procedures in Indonesia : Key Updates and Implications for Taxpayers

Comparative Analysis: Tax Holiday in Indonesia vs Other Countries

1. Regional Tax Incentives

Indonesia competes with countries like Vietnam, Malaysia, and Thailand. Each offers its own form of tax incentives. For instance, Vietnam often emphasizes shorter but simpler tax holidays, while Malaysia targets technology startups.

2. Indonesia’s Competitive Edge

What sets Tax Holiday Indonesia apart is its combination of long exemption periods, a huge domestic market, and abundant natural resources. For investors, this means tax incentives are not isolated perks, they are part of a larger ecosystem of growth opportunities.

Practical Commentary from Kusuma & Partners

At Kusuma & Partners Law Firm, we have seen firsthand how powerful Tax Holiday Indonesia can be for clients. However, we also know that the path to approval is full of legal and procedural hurdles.

In our practice, we recommend three strategies:

1. Early Due Diligence – ensuring compliance with environmental, corporate, and tax laws before applying.
2. Strategic Structuring – designing investments to clearly meet the criteria for pioneer industries.
3. Ongoing Compliance – maintaining proper documentation and reporting to avoid revocation.

Our advice is simple: while the benefits are real, success depends on preparation, compliance, and expert legal guidance.

Conclusion

The Tax Holiday Indonesia program is more than just a tax break—it is a gateway to unlocking Indonesia’s vast economic potential. For investors willing to commit to strategic sectors and follow compliance rules, it offers one of the most rewarding fiscal incentives in Asia.

How We Can Help

If you are planning to invest in Indonesia and want to explore how to secure Tax Holiday Indonesia, contact us today, our expertise will help you maximize benefits, reduce risks, and achieve long-term business success.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

Cryptocurrencies have evolved from being niche digital assets to becoming mainstream investment instruments across the globe. In Indonesia, millions of individuals and businesses now actively trade Bitcoin, Ethereum, and other digital tokens. Yet, with great opportunities come significant responsibilities. As trading volumes surged, so too did the government’s interest in ensuring fairness, transparency, and accountability in the market.

This is where MOF Regulation No. 50/2025 plays a pivotal role. By establishing clear rules for crypto taxation in Indonesia, the Ministry of Finance aims to create certainty for both investors and regulators. This regulation is not just another piece of bureaucracy—it is a foundation to integrate crypto into Indonesia’s formal financial and tax systems. For business owners, companies, and investors, understanding its provisions is the key to staying compliant and avoiding unnecessary legal pitfalls.

Overview of MOF Regulation No. 50/2025

1. Background and Purpose of the Regulation

Before MOF Regulation No. 50/2025, crypto taxation in Indonesia was clouded with ambiguity. Traders often wondered whether profits were subject to income tax, and businesses were unsure about VAT implications. This uncertainty led to inconsistent reporting and, in some cases, deliberate non-compliance.

The new regulation eliminates these grey areas. It provides a structured framework that balances the government’s need for revenue with the market’s need for clarity. Importantly, the regulation aligns with Indonesia’s broader digital economy strategy, ensuring that cryptocurrencies are treated on par with other taxable goods and services.

2. Scope of Application (Who Is Affected?)

The regulation has a wide reach. It covers:

• Individual traders who buy and sell crypto for personal investment.
• Business entities such as exchanges, wallet providers, and mining operators.
• Foreign companies with substantial economic interaction with Indonesian users.

In other words, if you earn money, provide services, or trade crypto within Indonesian jurisdiction, this regulation applies to you. The inclusiveness of its scope signals the government’s seriousness in ensuring equal treatment of digital assets compared to traditional financial instruments.

Tax Obligations for Crypto Transactions

1. VAT (Value Added Tax) on Digital Asset Transactions

One of the most striking aspects of crypto taxation in Indonesia under MOF Regulation No. 50/2025 is the imposition of VAT. Crypto assets are classified as intangible taxable goods, meaning that every exchange, purchase, or sale can attract VAT.

This rule places crypto alongside other digital commodities, ensuring that the government secures revenue from rapidly growing online markets. For example, if you purchase Bitcoin through an Indonesian exchange, part of that transaction may include VAT—just like when you buy other taxable services online. The rationale is simple: if digital assets are part of everyday commerce, then they should contribute to national revenue just like any other product.

2. Income Tax (PPh) for Individuals and Businesses

In addition to VAT, crypto profits are also subject to Income Tax (PPh). The regulation distinguishes between individuals and corporations:

• Individuals pay tax based on progressive rates that apply to personal income.
• Corporations pay tax under standard corporate income tax rules, including on revenue earned from transaction fees, commissions, or mining activities.

Consider a scenario: if an individual earns IDR 500 million annually from crypto trading, this income must be reported and taxed. Likewise, a crypto exchange charging service fees must declare those fees as revenue for taxation purposes. By clarifying these obligations, MOF Regulation No. 50/2025 ensures fairness while aligning crypto with Indonesia’s existing tax structure.

READ MORE:

Crypto Regulation in Indonesia – A Guide for Businesses

Compliance Procedures Under MOF Regulation No. 50/2025

1. Reporting Mechanisms

Tax compliance is not only about paying; it is about reporting accurately and transparently. The regulation requires taxpayers to declare their crypto-related activities in periodic tax returns. This covers VAT obligations, income earned, and any related financial activities.

Failing to file reports or underreporting can result in significant consequences, from administrative fines to tax audits. In severe cases, deliberate concealment may lead to criminal liability. Thus, the message is clear: transparency is non-negotiable.

2. Record-Keeping Requirements

To ensure accurate reporting, taxpayers must also keep detailed transaction records. This includes dates, amounts, counterparties, and fair market values converted into Indonesian Rupiah (IDR). Exchanges and service providers are further expected to issue invoices that reflect VAT charges.

The law mandates storing these records for at least 10 years, reflecting Indonesia’s broader tax framework. This requirement may feel burdensome to small traders, but it is essential for protecting both taxpayers and regulators in case of future disputes or audits.

Implications for Foreign Investors and Businesses

1. Permanent Establishment (BUT) Considerations

Foreign crypto companies cannot assume that they are beyond Indonesia’s tax reach simply because they lack a physical office. Under the Permanent Establishment (BUT) principle, a foreign company can be deemed taxable if it maintains a significant economic presence in Indonesia.

For instance, a foreign exchange that consistently serves Indonesian traders or markets its services locally may fall under the BUT rule. This means such a company could owe Indonesian corporate tax, regardless of where its headquarters are located.

2. Cross-Border Crypto Transactions

Cross-border crypto transactions bring another layer of complexity. If a foreign entity sells tokens to Indonesian buyers, withholding tax rules might apply. This prevents revenue from escaping taxation simply because the counterparty is outside Indonesia.

For international investors, this underscores the importance of tax planning. Double taxation treaties between Indonesia and other countries can help reduce risks, but only if structured correctly.

READ MORE:

Global Minimum Tax Implementation in Indonesia: What Businesses Should Know

Legal and Practical Challenges in Implementation

1. Ambiguities in Definitions

Despite its strengths, MOF Regulation No. 50/2025 still leaves room for interpretation. Terms like “crypto asset,” “mining,” and “DeFi activity” are evolving concepts globally. Without harmonized definitions, taxpayers may face uncertainty about what is taxable and what is exempt.

2. Risks of Non-Compliance

The risks of ignoring compliance are real. Beyond financial penalties, companies risk reputational damage in an industry built on trust. For individuals, tax evasion could mean not just fines but potential imprisonment.

Transitioning into compliance may feel daunting, but with proper guidance, businesses and individuals can avoid these risks while securing peace of mind.

Practical Commentary from Kusuma & Partners

From our experience advising clients on crypto taxation in Indonesia, many underestimate the regulatory scope. A common misconception is that crypto exists “outside” government regulation. MOF Regulation No. 50/2025 proves otherwise.

Our practical advice includes:

• Proactively assess your activities. Don’t wait for a tax audit—map your crypto exposure now.
• Review your business structure. If you are a foreign operator, analyze whether you risk creating a BUT in Indonesia.
• Invest in compliance systems. Automated record-keeping and professional tax review are far cheaper than penalties.

At Kusuma & Partners, we bridge the gap between regulatory complexity and business needs. We help clients not just comply but strategically position themselves to minimize tax burdens while maintaining legal safety.

Comparative Insights: Indonesia vs Other Jurisdictions

When compared to other jurisdictions, Indonesia’s stance is relatively balanced. For instance, Singapore exempts long-term investment gains but taxes income from crypto trading. Meanwhile, the United States applies strict and complex reporting standards.

Indonesia, through MOF Regulation No. 50/2025, has chosen a middle path. The system captures fair revenue through VAT and income tax but avoids excessive complexity that could discourage innovation. This balance makes Indonesia a competitive yet responsible jurisdiction for crypto business development.

READ MORE:

Tax Obligations for Permanent Establishment (PE) in Indonesia

Future Outlook: Evolving Crypto Regulations in Indonesia

The world of crypto evolves rapidly, and Indonesia’s regulatory response will continue to develop. Future updates may address NFTs, DeFi protocols, and stablecoins, which are currently less regulated. Moreover, as the government integrates blockchain into public services, stricter compliance systems will likely emerge.

For businesses, this means that flexibility and adaptability will be key. Staying informed and seeking professional advice are no longer optional—they are survival strategies in an evolving landscape.

Conclusion

The issuance of MOF Regulation No. 50/2025 represents a turning point in how Indonesia manages digital assets. By imposing VAT, income tax, and robust compliance procedures, the government ensures fairness while recognizing crypto’s role in the economy.

For businesses, investors, and individuals, the choice is clear: adapt now or face legal and financial consequences later.

How We Can Help

At Kusuma & Partners Law Firm, we specialize in guiding clients through these challenges with tailored strategies that protect their interests. Contact us today to navigate crypto taxation in Indonesia confidently and secure your investments with expert legal guidance.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

In the ever-evolving business landscape of Indonesia, ensuring workplace compliance is no longer just a legal formality—it’s a necessity. Whether you’re a local entrepreneur, foreign investor, HR director, or startup founder, understanding and implementing workplace compliance in Indonesia protects your business from regulatory pitfalls, costly disputes, and reputational damage. The real cost is not just about fines, it’s also about reputation loss, productivity dips, and jeopardized investment. In Indonesia’s robust and evolving economy, workplace compliance in Indonesia is more than a checkbox; it’s your ticket to sustainable business growth and trust, both with employees and regulators.

Legal Framework: Indonesian Workplace Compliance at a Glance

• Law No. 13 of 2003 concerning Manpower, as amended by Law No. 6 of 2023 concerning Job Creation Law.

Employment relationships, contracts, wages, hours, leave, termination.

• Government Regulations No. 35 & 36 of 2021, No. 51 of 2023

Overtime, fixed employment, wage calculation, breaks, termination.

• Law No. 1 of 1970 & related OHS Regulations

Occupational health and safety.

• Law No. 12 of 2022

Protection against workplace sexual harassment.

• Ministerial Decree No. 88 of 2023

Preventive mechanisms against sexual violence in the workplace through policies, task forces, and education.

• Social Security Law No. 24 of 2011 concerning BPJS.

Social security for workers, healthcare, pension.

Indonesia’s legal landscape for workplace compliance evolves frequently. Businesses must stay up to date and implement changes swiftly to avoid non-compliance risks.

Why Workplace Compliance Matters in Indonesia

Running a business in Indonesia involves more than just growth targets and marketing strategies. Behind every successful enterprise lies a strong foundation of regulatory compliance especially regarding employment laws.

Failure to comply with manpower regulations can result in severe penalties, ranging from fines, revoked permits, and bans from public tenders to criminal sanctions in extreme cases. More than that, it can erode employee trust and tarnish your brand image.

Key Areas of Compliance Every Business Must Address

1. Occupational Health & Safety (SMK3)

If your business employs at least 100 workers or operates in a hazardous sector, you are legally required to implement the SMK3 system. This means:

• Conducting periodic risk assessments
• Forming an Occupational Safety and Health Committee (P2K3)
• Documenting safety procedures
• Providing safety training and personal protective equipment (PPE)

The Ministry of Manpower has been increasingly active in auditing safety compliance—particularly in manufacturing, construction, and logistics sectors. Nothing matters more than a safe workplace. Law No. 1 of 1970 and supporting regulations obligate companies to:

• Provide personal protective equipment (PPE)
• Conduct regular risk assessments and safety training
• Establish a Workplace Health and Safety Committee (P2K3) for 100+ employee companies
• Document and investigate all workplace incidents

OHS compliance cuts accident risk, reduces business interruption, and lowers insurance costs. Failure here can result in criminal charges for top management—especially if negligence leads to serious injury or death.

2. Employment Contracts, Working Hours, and Termination

Contracts must be aligned with the Job Creation Law and the implementing regulation PP No. 35 of 2021. Misusing fixed-term contracts (PKWT) or failing to provide legally required severance packages can lead to labor disputes.

Also, employers must:

• Observe maximum working hours (7 hours/day or 40 hours/week)
• Pay overtime for excess hours
• Grant statutory leave and rest periods
• Follow legal termination procedures with due severance pay based on updated formulas

Outdated contracts and vague termination clauses are among the top causes of labor litigation in Indonesia.

READ MORE:

Employment in Indonesia: Types and Regulations

3. Anti-Discrimination and Anti-Harassment

Indonesian law prohibits discrimination based on gender, religion, ethnicity, disability, or political orientation. However, Ministerial of Manpower Decree No. 88 of 2023 has gone further by specifically targeting sexual violence in the workplace.

Companies must:

• Have a written anti-harassment policy
• Conduct awareness training
• Establish a Workplace Sexual Violence (WSV) Task Force
• Create clear complaint mechanisms

Indonesia prohibits workplace discrimination based on gender, religion, ethnicity, disability, and other protected status. The new Law No. 12 of 2022 further strengthens workplace protection against sexual harassment. Every company must:

• Establish anti-harassment policies and reporting mechanism
• Conduct regular employee awareness training
• Take prompt and appropriate remedial action

A culture of respect is more than a legal obligation—it’s a strategic business advantage in talent retention and productivity. The failure to comply doesn’t just risk penalties—it signals to employees and clients that your workplace culture is not safe or inclusive.

4. BPJS Kesehatan and Ketenagakerjaan Compliance

It is mandatory for all employers to register their employees with BPJS programs and make monthly contributions. The standard contribution rates are:

• BPJS Kesehatan: 5% of salary (4% employer, 1% employee)
• BPJS Ketenagakerjaan: varies depending on risk and benefit types, covering accident insurance (JKK), death benefit (JKM), pension (JP), and old-age security (JHT)

Non-compliance may result in:

• 2% penalty on overdue contributions
• Criminal sanctions
• Ineligibility for government tenders
• Difficulty in acquiring business permits

5. Data Protection and Employee Privacy

Even though Indonesia’s data protection regime is still evolving, companies are expected to respect and safeguard employee privacy. Personal data must only be processed for legitimate, disclosed purposes. Businesses processing employee data electronically must abide by Government Regulation No.71/2019.

READ MORE:

The Hidden Legal Traps of Outsourcing in Indonesia: Compliance, Challenges, and Companies Tips

Common Pitfalls in Indonesian Workplace Compliance

Many companies, especially startups or foreign-invested firms, fall into these traps:

• Delayed or no BPJS registration, especially for contract or part-time employees.
• Old contract templates that don’t reflect the latest Job Creation Law amendments.
• Inadequate SMK3 implementation, such as lacking safety manuals or untrained supervisors.
• Absence of anti-sexual harassment policies, which is now mandatory under Decree 88/2023.

Avoiding these mistakes requires active monitoring and a compliance-first mindset.

Best Practices for Workplace Compliance in Indonesia

• Draft clear, legally compliant contracts.
• Ensure robust payroll records and timely social security payments.
• Regularly review company handbooks, policies, and SOPs.
• Conduct periodic compliance audits.
• Train HR and management teams in updated regulations.
• Provide safe, fair, and inclusive work environments.
• Document everything, if it’s not documented, it doesn’t exist in the eyes of the law.

Practical Commentary from Kusuma & Partners

At Kusuma & Partners, we’ve advised many of local and multinational businesses on Indonesian workplace compliance. Our key insight: compliance isn’t just a legal necessity-it’s your business’s competitive edge. Early investment in compliance saves you from headaches, fines, and reputational risks. Don’t wait for an audit to start doing the right thing; build compliance into your daily business.

If you feel overwhelmed by Indonesia’s vast labor law landscape, ask for professional advice before making employment decisions. This proactive approach could save your business millions.

Conclusion

Workplace compliance in Indonesia is more than ticking boxes. It’s about aligning your business practices with legal mandates while building a safe, fair, and professional work environment. With laws evolving and enforcement increasing, companies must stay proactive, not reactive. Workplace compliance in Indonesia is an ongoing journey, not a one-off project. Laws and regulations are dynamic, enforcement is real, and the benefits of proactive compliance trust, productivity, and reputational growth cannot be overstated.

Business owners, investors, HR, and managers: make compliance your company’s success engine. Empower your teams with up-to-date knowledge, transparent processes, and professional legal guidance.

How We Can Help

We stand ready to guide you step by step, contact us to ensure full compliance, strategic planning, and secure workplace in Indonesia.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”

Raising capital is a pivotal moment for any business, regardless of its size or stage. Whether it’s to fund a new project, expand operations, or simply to bridge a gap in cash flow, securing investment can be a complex and time-consuming process. A major hurdle often lies in the valuation of the company. Determining a fair and mutually agreeable value can lead to protracted negotiations and delays, potentially causing you to miss critical opportunities. If the valuation is too high, it might deter potential investors; if it’s too low, it can result in significant dilution for existing shareholders. This dilemma often creates a bottleneck that slows down a company’s momentum.

What is a Convertible Note? The Flexible Funding Solution

This is where the convertible note emerges as a flexible and strategic solution. So, what exactly is a convertible note? In essence, it’s a short-term debt instrument that a company issues to an investor. The key difference from a conventional loan is that this debt is not repaid in cash. Instead, it is designed to convert into company equity (shares) at a later date. This conversion typically happens when the company secures a subsequent, larger funding round, often called a “Next Equity Financing.” Think of it as a financial bridge: you secure the funds you need today with the promise to settle the debt with company ownership in the future, once the company’s valuation is more clearly defined. The convertible note elegantly solves the problem of premature valuation, allowing funding to proceed quickly and offering benefits to both the company and the investor.

The Anatomy of a Convertible Note in Indonesia: Key Components

1. Key Features Beyond a Standard Loan

While a convertible note is fundamentally a form of debt, it includes several distinctive features that differentiate it from a traditional loan. These components are structured to balance the interests of the company and its investors.

• Maturity Date: A convertible note has a set maturity date, typically ranging from 12 to 24 months. If a qualifying equity funding round has not taken place by this date, the note holder can choose to either demand repayment of the principal and accrued interest or, in some cases, convert the debt into equity based on a pre-agreed formula.
• Interest Rate: A convertible note accrues interest, which serves as a form of compensation for the investor’s risk. This interest is usually not paid in cash but is added to the principal amount. When the note converts, the investor’s total investment (principal plus accrued interest) is used to calculate the number of shares they receive.
• Valuation Cap: This is a critical protective feature for the investor. A valuation cap sets a maximum valuation for the company at which the conversion can occur. For instance, if the cap is set at $10 million, and the company later raises a funding round at a $50 million valuation, the convertible note investor will still receive shares as if the company were valued at only $10 million. This protects early investors from significant dilution if the company’s value grows rapidly.
• Discount Rate: Another incentive for early investors is the discount rate, which typically falls between 15% and 25%. This discount is applied to the share price paid by new investors in the subsequent funding round. For example, if new investors buy shares for $10 each, the convertible note holder would get them at a discounted price of $7.50-$8.50. At the time of conversion, the investor receives the more favorable of the two terms: the valuation cap or the discounted price.

2. How a Convertible Note Operates

Imagine a medium-sized company needs IDR 10 billion to launch a new product line but is hesitant to undergo a formal valuation. An investor is willing to provide the capital. Instead of a drawn-out valuation debate, both parties agree on a convertible note with a principal of IDR 10 billion, a 5% annual interest rate, a 2-year maturity date, a valuation cap of IDR 50 billion, and a 20% discount rate.

Eighteen months later, the company’s new product is a huge success, attracting a private equity firm that invests at a post-money valuation of IDR 200 billion. The convertible note now converts into equity. The investor’s total investment becomes IDR 10 billion plus accrued interest. The conversion price will be based on whichever is lower: the price per share at a IDR 50 billion valuation (the cap) or the price per share with a 20% discount on the IDR 200 billion valuation. The investor benefits from their early commitment, and the company secures vital funding without the initial valuation hassle.

Advantages and Risks

1. Advantages for Businesses: Flexibility and Efficiency

Using a convertible note offers significant benefits for companies:

• Valuation Deferral: It allows you to raise capital without the difficult and often subjective process of setting a company valuation at an early or uncertain stage. This saves time and minimizes potential conflicts.
• Expedited Process: The legal documentation for a convertible note is typically simpler and faster to prepare than a full-fledged equity investment agreement, leading to quicker access to funds.
• Control and Ownership: The company’s existing shareholders maintain their ownership percentage until the note converts. This is crucial for maintaining control during the initial growth phases.
• Bridge Funding: It serves as an excellent tool for securing interim funding to cover operational costs or specific projects, providing stability while you prepare for a larger financing round.

2. Advantages for Investors: Protection and Upside Potential

Investors also have strong reasons to favor a convertible note:

• Downside Protection: As a debt instrument, a convertible note grants investors a senior claim over equity holders in the event of liquidation. This offers a higher chance of recovering their investment if the company fails.
• Upside Potential: The valuation cap and discount rate ensure that early investors receive a better price per share, giving them a larger ownership stake for the same amount of capital, which is a reward for their early commitment and risk.
• Accrued Interest: The interest that accumulates adds to the total value of their investment upon conversion, further increasing their potential return.

3. Risks to Consider: A Balanced Perspective

A convertible note also carries risks that you must carefully manage despite its advantages:

• Maturity Risk: If the company fails to secure a subsequent funding round by the maturity date, the debt could become a financial burden. The investor may demand repayment in cash, which the company might not be able to provide, potentially leading to financial distress.
• Dilution Impact: If the valuation cap is set too low, the conversion could result in significant and unforeseen dilution for existing shareholders, including the founders. It’s crucial to set the terms thoughtfully.
• Complexity: While simpler than a full equity round, the terms of a convertible note can be complex, and a poorly drafted agreement can lead to future disputes over conversion mechanics and shareholder rights.

READ MORE:

• Personal Guarantee in Indonesia: Legal Framework, Risks, and Enforcement

Understanding the Legal Landscape in Indonesia

1. The Legal Framework

Indonesia primarily governs a convertible note under the legal framework for debt instruments. A convertible note agreement is a legally binding debt contract. Relevant regulations include the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata) and Law No. 40 of 2007 on Limited Liability Companies (UU PT). The UU PT outlines the procedures for capital increases and share issuance, which are vital for the conversion process. You must ensure that the company’s articles of association permit such transactions and obtain the necessary approvals, such as from a General Meeting of Shareholders (RUPS).

2. Key Legal Aspects of the Agreement

A robust convertible note agreement must clearly define all terms to be legally sound and protect all parties. Key elements include:

• Identification of Parties: Clear details of the company and the investor.
• Principal and Terms: The amount of the investment, interest rate, and maturity date.
• Conversion Mechanics: The conditions under which conversion will be triggered (e.g., a qualifying financing round), along with the specific conversion formula, including the valuation cap and discount rate.
• Rights and Obligations: Outlining the rights of the investor (e.g., information rights) and the company’s obligations.
• Governing Law and Jurisdiction: Stating that the agreement is subject to Indonesian law and specifying the competent court for any disputes.

3. The Importance of Due Diligence

Before signing a convertible note, both the company and the investor must conduct thorough due diligence.

• For the Investor: This includes verifying the company’s legal status, financial records, assets, and existing contracts. They must also assess the business plan and the management team’s capabilities.
• For the Company: It’s equally important to vet the investor. Does the investor have a solid reputation? Can they provide strategic value beyond just capital? Are their proposed terms reasonable and aligned with your long-term vision?

READ MORE:

• How to Buy Back Shares from Local Partners in PT PMA

Practical Commentary from Kusuma & Partners

At Kusuma & Partners Law Firm, we see the convertible note as a powerful tool for business growth, but one that requires expert guidance. Many companies, whether established or growing, fall into the trap of using generic templates or overlooking critical legal details. A poorly structured convertible note can lead to significant problems down the line, from disputes over valuation to unexpected dilution.

Our approach is to serve as your strategic legal partner. We work with you to understand your business objectives and draft an agreement that is not only legally sound but also aligned with your strategic goals. We simplify complex legal language, guide you through negotiations, and ensure that every clause of the convertible note protects your interests. With our experienced team of corporate lawyers, you can focus on executing your business plan with the confidence that your legal foundation is secure.

Conclusion

The convertible note is an invaluable financing tool in the Indonesian market, offering a flexible and efficient way to raise capital while deferring the complexities of valuation. It provides a strategic advantage for companies seeking to grow and for investors looking for an early entry with built-in protections. However, its effective use depends on a deep understanding of its mechanics and the underlying legal framework.

How We Can Help

Don’t let legal complexities or a rushed process undermine your business’s potential. Take a proactive step to secure your company’s future. Contact us today for a comprehensive legal consultation and customized legal solutions for your financing needs. Let us help you build a solid and secure legal foundation for your business’s success.

Fill in the form below to get our expert guidance.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult with us.”