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The Arbitration Law defines arbitration as a method of settling a civil dispute outside the general court based on an arbitration agreement made in writing by the disputing parties.As arbitration is an out-of-court settlement method, the district courts have no jurisdiction to adjudicate disputes of parties who are bound by an arbitration agreement. Arbitration in Indonesia is governed by Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution.
In Arbitration Law stipulated many disputes in commercial sector that can be settled in arbitration. Those are Commerce, Banking, Finance, Capital Investment, Industry and Intellectual Property Rights. In the last few years, many people and companies prefer arbitration than civil court proceeding to settled the disputes. One of the advantages of arbitration as a disputes solution is take less time to obtain a final and binding decision.
The arbitral institutions in Indonesia are the Indonesian National Board of Arbitration (BANI), the Indonesian Capital Market Arbitration Board (BAPMI) and the Shariah National Arbitration Body (BASYARNAS).
Indonesia is characterized by its dynamic labor conditions. In 2004, the country completed a labor law reform program through the enactment of Law No. 2 on the Settlement of Industrial Relations Disputes. This was the last of the three pieces of major labor legislation regulating labor issues in Indonesia, along with Law No. 21 of 2000 on Trade Unions and Law No. 13 of 2003 on Employment.
In addition, Indonesia was the first country in Asia and the fifth in the world to ratify all core ILO Conventions. Since becoming a member of the ILO in 1950, Indonesia has ratified 18 conventions – eight core conventions, eight general conventions, and two other conventions. Be that as it may, Indonesia is still not free from labor problems.
Disputes between employers and workers are common in industrial relations. Industrial disputes in recent years have often ended in violence, either with workers taking out their frustration at the failure to resolve their grievances, or employers enlisting security forces to put down protests.
Running a business especially in Indonesia is very challenging. Because it not only needs business skill but also sensitivity to comply with law and regulations related to corporations which are changing dynamically. Issues related to corporation and legal are called as Corporate Legal Matters.
Further, Corporate Legal Matters are a set of obligations that should be fulfilled by a company including its shareholders, Board of Directors and Board of Commissioners. Basically, things related to Corporate Legal Matters are regulated by Law No. 40 of 2007 concerning Limited Liability Company (“Company Law”) and then is elaborated on respective industries regulations.
Company Law contains imperative and non-imperative provisions to establish and manage a company properly. In regard to company establishment, Company Law requires a certain minimum capital and minister approval. In managing a company, the Company Law provides a set of guidance to record company’s documents, conduct annual and extraordinary meeting and reporting obligation. Further, Company Law also determines the procedures how to conduct corporate actions such as merger, acquisitions, spin-off, and so on.
Fail to adhere with those set of provisions and guidance will damage the company. Because the company will be imposed with several sanctions ranging from admonition to company dissolution.
Throughout the years, Indonesia remains one of the most attractive countries for Foreign Investors, especially in the Southeast Asia region. In 2007, the Government issued the legal basis of Investment Law, the Law No. 25 of 2007 on Investment (“Investment Law”). The regulation, together with the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal) are the two pillars of Investment Law and Regulation in Indonesia.
In Indonesia there are two common forms of Foreign Investment. The first is Direct Investment, in which the investment must be in the form of establishing a limited liability company called Foreign Direct Investment Companies (FDI Companies) otherwise known as PT PMA. The second is Indirect Investment. Of the two, only Direct Investment is regulated directly by the Investment Law.
Due to the vast industries and business sectors available in Indonesia, in order to invest in Indonesia investors have to liaise with several Government Agencies outside Indonesia Investment Coordinating Board pursuant to the business sector of their business. For some business sectors, foreign investment are limited and even restricted. Some also require the Investors to obtain technical recommendations.
It is common for Foreign Investors to invest in existing Companies aside from establishing their own in Indonesia. Foreign Investors establishing Representative Offices to perform research, supervising and coordinating the business of their Parent Company overseas are also commonly found in Indonesia.
The value of industry in Indonesia, increased considerably in the last few years. The increase of industrial activity in a country should be accompanied by the society awareness in the protection of intellectual property rights which is related to their business.
However appreciation towards Intellectual Property Rights in Indonesia is still modest, therefore sometimes some people consider Intellectual Property Rights are not important. However, the Intellectual Property Rights are in fact useful to protect the businessman from the possibility of unauthorized use of the rights.
Since 1994, Indonesia already become a member of World Trade Organization. As a member of WTO, Indonesia have to adjust any legislation related to Intellectual Property Rights with the Trade Related Aspects of Intellectual Property Rights (TRIPs) standard. The types and regulation of Intellectual Property Rights in Indonesia are Copyright by Law No. 28 of 2014, Patent by Law No. 14 of 2001, Trademarks by Law No. 15 of 2001, Industrial Design by Law No. 31 of 2000, Integrated Circuit Layout Design by Law No. 32 of 2000, Trade Secrets by Law No. 30 of 2000 and Varieties of Plants by Law No. 29 of 2000.
Indonesia is known as the potential market in investment in the food and beverage sector, especially in providing the food and beverage services-shaped restaurant with franchise system who comes from local or abroad.
Special food and beverage franchise, based on the record of one of the Association’s franchise in Indonesia, the food sector becoming one of the biggest contributors in the franchise business turnover circulation in Indonesia. In order for the development of franchising in indonesia intensified, the Government tried to give legal certainty with published a number of legal regulations related to the franchise. Recorded since 1997, indonesia has regulated about the franchise with the government regulation No.16 of 1997 in franchising, and because franchising has growth rapidly, than The Government changed Regulation with the government regulation No. 42 of 2007 in franchising.
In 2012 and 2014, government issued the new regulation rules through regulation of trade minister No. 53/M-DAG/PER/8/2012 on the organization of the franchise and regulation of trade minister No. 57/M-DAG/PER/8/2014 on amendments the regulations of trade minister No. 53/M-DAG/PER/8/2012, declare franchise must have the franchise agreements.
To open investment in food and beverage franchise sector, the first, investors must have operational license in tourism sector, who knows business tourism license (Tanda daftar usaha pariwisata) under the Ministry of Culture and Tourism, and then register the franchise agreements to the Ministry of trade.
Indonesia is known for its natural capital in the energy resources either its renewable or non-renewable resources. In order to maintain a sustainable national energy resources and industry, since 2001 The Country has made a major amendment and issued several laws and provisions from Law No.32 on Oil and Natural Gas in 2001 to the latest Law No.21 on Geothermal of 2014, which considered to complete all of the prevailing law and regulation in the renewable and non-renewable energy sector.
In addition, there is also Law No. 4 on Mineral Mining and Coal of 2009, a notable regulation which stipulates that mining company obliged to process and purified their raw mines product domestically in Indonesia and prohibited to export any mineral mines and coal product without any process and purifying fist and was applied since 2014.
The law and provision as mentioned above, have specifically regulated the industry from downstream to upstream process, for that business owners and company executive need to have a clear legal perspective before entering the business sector to keep their business complaint or when they need assistance in legal dispute regarding their business here in Indonesia.
The development of the telecommunications sector in Indonesia is characterized by the emergence of various telecommunication service provider in specially telecommunication cellular provider. many of users interested use of telecommunications services make competitive telecommunication provider provides the best service.
The development of increasingly sophisticated telecommunication technology, the Telecommunications Sector has the complex arrangements in the laws of Indonesia, not only regarding the Organization of telecommunications, it also concerns the content of the telecommunication related with Intellectual property rights or the related customer service who related consumer protection regulation.
Specially in the organized of Telecommunications, Indonesia has regulated among with law No. 36 of 1999 in telecommunication and government regulation No. 52 of 2000 in the organized telecommunication.
The complexity regulation in telecommunications sector, requires the organizer of telecommunications industry for knowing every aspect not only regarding the Organization of telecommunications, it also concerns the content of the telecommunication related with Intellectual property rights or the related customer service who related consumer protection regulation and the other law aspect.
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