We assist our clients, either individual, local or foreign company to set-up a new company (e.g., PT PMA, PT PMDN, Representative Office, and Permanent Establishment) and to prepare all legal documentation. It is our duty and responsibility to mitigate risks and secure the rights of our clients with regard to their investment in Indonesia by carrying out research and legal due diligence on our clients’ strategic future business partners. We advise our clients in structuring and forming the new company, obtaining permits and licenses, and providing legal or tax advice on the operation of the company.
What is Suspension of Debt Payment (PKPU)?
A legal process in Indonesia that allows debtors to propose a restructuring plan to its creditors to avoid bankruptcy.
What is Bankruptcy?
It is a legal status declared by the commercial court for a debtor who is unable to pay its debt when they fall due and whose financial condition is deemed irreparable. This process involves liquidating the debtor’s asset to pay off creditors.
What is the prevailing law of Suspension of Debt Payment (PKPU) and Indonesian Bankruptcy matters?
Indonesian Law Number 37 of 2004, and related regulations.
What are the criteria of Debtor to be declared under Suspension of Debt Payment (PKPU) or Bankruptcy status?
Debtor shall have at least 2 (two) creditors and have failed to pay at least one debt that is due and payable, and the debt criteria can be proven simply.
Who may file a Suspension of Debt Payment (PKPU and Bankruptcy petition?
Both debtor and creditor are eligible to file the petition to Indonesian Commercial Court.
What is the role of Administrator and Receiver?
The Administrator is appointed by commercial court to carry its duty and supervised by a Supervisory Judge during Suspension of Debt Payment (PKPU) process. While the Receiver runs its duty and supervised by a Supervisory Judge during Bankruptcy process.
What happens during PKPU process?
Creditors cannot take enforcement actions against debtor; an Administrator is appointed to oversee the process and a restructuring plan is proposed and voted on by creditors.
Can I settle debts for less than what I owe through PKPU?
Yes, PKPU allows for negotiation with creditors, and it is possible to settle debts for a reduced amount if an agreement is reached.
What if a PKPU plan is rejected by creditors?
The court may declare debtor bankrupts, and debtor’s assets could be liquidated to pay off debts.
How long does the PKPU process take?
The Temporary PKPU period is 45 days, which can be extended to a maximum of 270 days (Permanent PKPU) upon approval if a feasible restructuring plan is in progress. This provides ample time to negotiate and implement a debt repayment strategy.
What happens if Restructuring Plan (Proposal) during PKPU process is approved?
The Restructuring Plan (Proposal) becomes legally binding, and creditors must adhere to the agreed-upon terms. The Debtor will follow the new repayment schedule as proposed in Restructuring Plan, which provides relief and helps stabilize its financial situation.
What happens to my business during bankruptcy?
A Receiver will manage and liquidate your business assets to pay off creditors.
Can I appeal a bankruptcy decision?
Yes, within a certain timeframe and if a bankruptcy status comes directly from a petition of bankruptcy.
How can I prevent my business from going bankrupt?
Timely debt restructuring, effective financial management, and utilizing legal protections like PKPU can help prevent bankruptcy. Engaging our legal services early can provide the guidance needed to avoid financial insolvency.
How does bankruptcy impact my personal assets as a business owner?
For incorporated entities, bankruptcy generally affects the company’s assets only. However, for sole proprietorships or personal guarantees, your personal assets may be at risk. We can advise on the best course of action to protect your interests.
Can I recover from bankruptcy and start a new business?
Yes, once your bankruptcy proceedings are completed, you can start anew. Bankruptcy laws aim to give individuals and businesses a fresh start, though there may be restrictions and considerations to address.
How can I ensure a successful PKPU process?
Success depends on presenting a feasible Restructuring Plan, effective negotiations, and legal compliance. Engaging our experienced lawyers increases your chances of a favorable outcome, providing strategic advice and representation.
How do I start the process of debt restructuring or bankruptcy?
Contact us for a consultation. We will assess your situation, provide legal advice, and guide you through the necessary steps to initiate debt restructuring, PKPU, or bankruptcy proceedings.
What is a Cross-Border Tax Opinion?
A Cross-Border Tax Opinion provides expert analysis and advice on how Indonesian tax laws apply to your international business transactions. It helps you understand and manage tax obligations when dealing with foreign income, investments, and operations.
What are the common issues addressed in a Cross-Border Tax Opinion?
Common issues include managing double taxation, understanding withholding tax on foreign payments, navigating tax treaty benefits, and addressing transfer pricing concerns.
Is a Cross-Border Tax Opinion legally binding?
While a Cross-Border Tax Opinion is not legally binding, it offers authoritative guidance based on the current interpretation of Indonesian tax laws. It’s a critical tool for informed decision-making and compliance.
What information do I need to provide for a Cross-Border Tax Opinion?
We’ll need details about your business structure, the nature of your international transactions, relevant financial data, and any existing tax documentation. The more information you provide, the more precise our analysis can be.
What are the tax treaties that Indonesia has in place, and how do they affect my cross-border transactions?
Indonesia has tax treaties with various countries to avoid double taxation and prevent tax evasion. These treaties can impact how your international income is taxed, offering potential tax reliefs. We help you understand and apply these treaty benefits effectively.
What is a permanent establishment, and how does it impact my tax obligations?
A permanent establishment (PE) is a fixed place of business through which a foreign enterprise conducts business in Indonesia. If your business activities create a PE, you may be subject to Indonesian corporate income tax. We can help you determine if your operations constitute a PE and advise on managing the tax implications.
How does Indonesian tax law treat digital services provided from abroad?
Digital services provided by foreign companies to Indonesian consumers may be subject to Value Added Tax (VAT) and other local taxes. Our services help you navigate these regulations and ensure proper tax compliance for your digital operations.
Non-compete clauses are not explicitly regulated under Indonesian law, but they may be included in employment contracts. However, their enforceability depends on the specific terms, reasonableness of the restrictions, and the protection of the employee’s rights to earn a livelihood.
Minimum wages are set by the government and vary by region. Employers must ensure that wages paid to employees are at least equal to the regionally established minimum wage. Failure to comply can result in sanctions and penalties.
The MERP allows you to leave and re-enter Indonesia while holding a KITAS. Without a MERP, your KITAS would be invalidated upon exit. The permit typically lasts for the duration of your KITAS and must be renewed along with your KITAS if needed.
How long does it take to process a tax refund?
The processing time for a tax refund can vary. Generally, it may take few months, depending on the complexity of your claim and the completeness of your documentation.
Can I apply for a tax refund if I have unpaid taxes from previous years?
You may still be eligible for a tax refund even if you have unpaid taxes from previous years. However, the DJP may offset your refund against any outstanding tax liabilities. It’s important to address any unpaid taxes with the DJP to ensure a smooth refund process.
Is it possible to receive a tax refund in foreign currency?
Typically, tax refunds are issued in Indonesian Rupiah (IDR).
What is the deadline for applying for a tax refund?
There is generally a statute of limitations for filing a tax refund claim, typically within a few years from the end of the fiscal year in which the overpayment occurred. It’s important to file your claim promptly to avoid missing the deadline.
Employers are required to register their employees with BPJS (Badan Penyelenggara Jaminan Sosial) for health and employment benefits, including health insurance, old-age benefits, work accident protection, and death insurance. The contributions are shared between the employer and the employee.
What are General Corporate services??
General Corporate services encompass assistance with day-to-day business operations, including corporate structuring, compliance with local laws, regulatory matters, and corporate governance.
What is the scope of Legal Advisory in Indonesia?
Legal Advisory includes offering expert opinions on Indonesian law, helping businesses navigate legal complexities, and providing strategic guidance for minimizing risks in transactions or operations.
Why is Legal Compliance important in Indonesia?
Legal Compliance ensures that your business follows applicable laws and regulations in Indonesia, helping avoid legal disputes, penalties, and potential shutdowns due to non-compliance.
How can you help with company formation in Indonesia?
We assist with setting up different types of companies, such as PT PMA, PT PMDN, Representative Offices (RO), Permanent Establishment (PE), ensuring that your business structure complies with Indonesian corporate laws.
How often should companies conduct a legal compliance review?
It is recommended to conduct a legal compliance review regularly or when there are significant regulatory changes, ensuring the business continues to operate within the bounds of Indonesian law.
What happens if a company fails to meet legal compliance standards?
Failure to comply can result in penalties, legal disputes, or suspension of business activities. Staying compliant helps safeguard your business from these risks.
What should businesses know about labor law compliance in Indonesia?
Businesses need to comply with labor laws concerning employment contracts, employee rights, and benefits. We ensure your HR practices align with Indonesian labor regulations.
