Indonesian Antitrust & Competition laws are designed to promote fair competition and protect market competition from anti-monopoly practices, the businesses are prohibited from engaging in activities that restrict competition, such as price fixing, market allocation, and abuse of dominant position. We’ve got your back with seasoned lawyers that navigate the ins and outs of Indonesian competition law, offering strategic counsel and representation to safeguard your business interests, ranging from merger filings and notifications before the Indonesian Business Competition Supervisory Commission (KPPU) to dispute litigation proceedings.
Court Procedures Mechanism of Antitrust & Competition Disputes under Indonesian Legal Framework at a glance:
Our legal services on Antitrust & Competition:
Failure to register a foreign marriage in Indonesia may lead to not having a legal standing and complications in legal matters such as property ownership and inheritance matters. It is important to ensure proper registration to secure legal recognition and rights in Indonesia.
No, business activities such as attending meetings or negotiations are not allowed on a Tourist Visa. For such activities, you must apply for a Single-Entry Business Visa or a Multiple-Entry Business Visa, depending on your needs.
What is a PT PMA?
A PT PMA is a foreign-owned company in Indonesia, allowing international investors to own shares and operate within Indonesia under specific regulations.
What is a PT PMDN?
PT PMDN is a company fully owned by Indonesian nationals or entities and operates under local investment laws with fewer restrictions than PT PMA.
What is a Representative Office (RO)?
RO is a non-revenue-generating office set up by foreign companies for liaison, market research, or promotional activities in Indonesia.
What is a Permanent Establishment (PE)?
A PE is a foreign company’s local business presence in Indonesia, taxed similarly to local companies and used for operational activities.
What is the minimum number of shareholders required for PT PMA and PT PMDN?
Both PT PMA and PT PMDN require at least two shareholders.
What are the capital requirements for PT PMA and PT PMDN?
PT PMA requires a minimum of IDR 10 billion in capital, while PT PMDN has no specific minimum but must follow general corporate laws.
Can foreigners be involved in PT PMA?
Yes, foreigners can be shareholders and directors in PT PMA, though restrictions apply in certain sectors.
What taxes apply to PT PMA, PT PMDN, RO, and PE?
PT PMA and PT PMDN are subject to corporate taxes and VAT; PEs are taxed on local income, while ROs are not taxed as they don’t generate revenue.
Can a PT PMA operate in all business sectors in Indonesia?
No, certain sectors are restricted or closed to foreign investment under the Negative Investment List. It’s essential to verify sector-specific regulations.
Is local partnership mandatory for a PT PMA?
Not necessarily, but in some sectors, foreign investors must partner with a local entity or individual, depending on the industry’s regulations.
What documents are required to establish a PT PMA?
Key documents include Articles of Association, shareholder and director IDs, a registered office address, and compliance with sectoral licenses.
Can an RO transition into a PT PMA?
Yes, but the process requires establishing a new legal entity (PT PMA) and cannot simply be converted; it involves fulfilling investment requirements.
Can an RO hire employee?
Yes, an RO can hire local staff but is limited in terms of its operational scope since it cannot conduct direct business activities.
Are there industry-specific licenses required for PT PMA or PT PMDN?
Yes, many industries require specific permits or licenses in addition to general company registration, such as those for finance, construction, or mining.
What are the reporting obligations for PT PMA and PT PMDN?
Both must submit annual financial reports, tax filings, and comply with local labor and employment reporting to relevant authorities.
What is the difference between a PE and a branch office?
PE is a local taxable entity for foreign companies engaged in certain business activities, while a branch office is not common in Indonesia except for specific industries like banking.
What is the typical settlement of debt collection?
Typically, the debtor will pay the debt fully; or enter into a debt agreement that contains the installment of payment by giving an asset guarantee.
How can I enforce a debt agreement?
If the debtor fails to comply with an agreed settlement, legal enforcement measures such as executing the debtor’s asset and court proceedings are conducted.
How does the debt collection process work in Indonesia?
The process is started with legal advice and case analysis by our lawyers, sending demand letters, followed by negotiation and settlement. If the debtor remains unresponsive or refuses to pay, further legal actions like filing a lawsuit through the Indonesian court may be considered if necessary.
How many demand letters shall be sent to the debtor?
In Indonesia, the best legal practice is to send 2x (twice), or a maximum of 3x (three times) demand letters.
What happens if the debtor ignores the first demand letter?
The next steps could include sending the second demand letter and further negotiations. Persistent non-compliance may lead to further legal action or court proceedings.
How long does the debt collection process take?
Depending on the complexity of the case and the debtor’s response.
What are the benefits of out-of-court debt collection?
Typically, faster, less expensive, and less adversarial than going to court. It helps maintain business relationships and avoids lengthy legal battles in court.
Are there any time limits for claiming an unpaid debt in Indonesia?
Yes, there is a statute of limitations, which is the period from the due date of the debt in which you must initiate recovery actions for the debtor.
Can debt collection affect my business relationship?
Handled professionally, debt collection can maintain or even strengthen business relationships by demonstrating a commitment to fair and timely financial practices. Open communication and a fair approach are key.
What if the debtor disputes the debt?
If the debtor disputes the debt, you may need to provide evidence supporting your claim. This could involve negotiations, mediation, or legal action to resolve the dispute.
Can I include interest on overdue debts?
Yes. The interest rate should comply with Indonesian laws.
What should I do if I receive a counterclaim from the debtor?
It is important to consult with our lawyer to assess the validity and implications of the counterclaim. Our lawyer can help you respond appropriately and protect your interests.
Yes, probationary periods are allowed under Indonesian labor law but can only last up to three months. During this time, the employment contract must clearly state the probationary nature of the work and the expectations for successful completion.
The Investor KITAS allows foreign nationals who hold significant shares in an Indonesian company to live and manage their investment in Indonesia. Unlike the Work Permit KITAS, the Investor KITAS does not require a separate work permit (IMTA) as it focuses on investment management rather than employment.
Renewals must be processed before your KITAS expires. We recommend starting the process well in advance to avoid overstaying penalties.
What is a tax dispute, and how does it arise in Indonesia?
A tax dispute occurs when there is a disagreement between the taxpayer and the Indonesian Tax Authorities (Direktorat Jenderal Pajak, DJP) regarding tax assessments, tax payments, or the interpretation of tax regulations. Disputes commonly arise after a tax audit when the taxpayer disagrees with the findings of the DJP.
How does a tax audit work?
During a tax audit, the tax authority reviews your financial records and tax filings to ensure compliance. If discrepancies are found, they will issue a notice of their findings.
What can I do if I disagree with a tax audit’s findings?
You can file a Tax Objection within three months of receiving the audit results. This is your formal request for the tax authority to re-examine their decision.
What happens if my Tax Objection is rejected?
If your objection is rejected, you can escalate the matter by filing a Tax Appeal with the Tax Court within three months of receiving the rejection.
What is a Tax Lawsuit?
A Tax Lawsuit challenges administrative actions by the tax authority that are unrelated to assessments, such as disputes over tax refunds or collections.
When can I file a Tax Judicial Review?
A Tax Judicial Review is the final legal step, brought before the Supreme Court to correct substantial legal errors made by the Tax Court. This is done only after exhausting all other avenues.
Can I resolve a tax dispute without going to court?
While negotiation is possible, formal out-of-court settlements are rare in Indonesian tax disputes. Our professional advice is crucial to exploring your options.
What are the typical outcomes of a tax objection?
The outcomes of a tax objection can be varied. The tax authority may fully accept, partially accept, or reject your objection, depending on the strength of your argument and evidence provided.
How long does it take to receive a decision on a Tax Objection?
The tax authority typically takes 12 months from the date of filing to issue a decision on a Tax Objection. If no decision is made within this time, the objection is considered rejected by law.
Can I settle my tax liabilities during the dispute process?
Yes, settling your tax liabilities during the dispute process is possible. However, this may impact the progression of the dispute. Consulting with a tax professional like our firm is advised before making any settlement decisions.
What are the common reasons for a Tax Judicial Review?
Common reasons for a Tax Judicial Review include substantial legal mistakes in the lower courts’ rulings, misinterpretation of tax laws, or procedural violations that affected the fairness of the judgment.
What penalties can I face in a tax dispute?
Penalties can include fines, interest charges, and administrative sanctions depending on the nature of the dispute. If a tax deficiency is found, additional penalties may apply for late payments or underreporting.
What is the time limit to file a Tax Lawsuit?
A Tax Lawsuit must be filed within 90 days of the administrative action you are challenging (such as a refusal of a refund). Missing this deadline can result in the dismissal of your lawsuit.
What types of administrative decisions can be challenged through a Tax Lawsuit?
You can challenge decisions such as denial of tax refunds, incorrect tax collections, or penalties imposed outside of a tax assessment.
What happens if I win a Tax Appeal or Tax Lawsuit?
If you win, the court may order the tax authority to revise or cancel their previous decision. This could result in a refund, removal of penalties, or a corrected tax assessment.
Can I request an extension for filing a Tax Objection or Tax Appeal?
No, deadlines for filing Tax Objections and Tax Appeals are strictly enforced under Indonesian tax law.
What is the burden of proof in a tax dispute?
In Indonesian tax disputes, the burden of proof lies with the taxpayer. You must provide evidence and documentation that supports your claim against the tax authority’s assessment or decision.
What happens if I fail to provide sufficient evidence in a Tax Objection or Tax Appeal?
If you fail to provide enough evidence, the tax authority or the Tax Court may rule in favor of the government. Therefore, it is crucial to present a well-prepared and substantiated case.
What is the impact of a Tax Dispute on my business operations?
While a tax dispute is ongoing, it may cause financial uncertainty. However, unless there are severe violations, the tax authority generally does not halt business operations during the dispute. Consulting with tax professionals like our firm can help mitigate risks.
Can I negotiate with the tax authority before filing an objection or appeal?
Informal negotiations or discussions can sometimes lead to clarification or resolution before entering the formal dispute resolution process. However, once a decision has been made, formal procedures are required to challenge it.
