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3 Important Steps in the Procedure for Changing PMA Companies to PMDN

By adminbpl | Jan 19, 2021

3 Important Steps in the Procedure for Changing PMA Companies to PMDN The departure of foreign investors from the company structure, of course, impacting the adjustment of the company legality. Pay attention to the procedure so that errors do not occur in the process. The intricacies of investment development in Indonesia are very diverse. The ups and downs of business activities are largely determined by existing investments. This causes business actors to be smart in determining business steps, especially in the investment aspect. It is often considered that a business gets ahead when it gets investment or capital from abroad. However, it is common for foreign investment companies (PMA) to change their company’s capital scheme to become domestic investment (PMDN). It is important to understand and know the procedure for changing PMA to PMDN, considering that there is a change in the Company’s investment status which will also result in several PMA licensing provisions. Following are the procedures and important things you need to know about changing the status of PMA to PMDN. Follow…

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Two Schemes of Cooperation with Investors To Develop Your Business

Two Schemes of Cooperation with Investors To Develop Your Business

By adminbpl | Dec 30, 2020

Two Schemes of Cooperation with Investors To Develop Your Business Both methods are closely related to the legality and legal compliance aspects of the company which must be maintained. The Covid 19 pandemic has caused business actors to rethink their business strategies. The different business strategies causes Business Actors to require funding from other parties or investors. However, business actors or companies that are already established are not that easy in obtaining funds, there are schemes related to legal aspects that need attention. There are two ways that Business Actors can choose if they are going to get funds from potential investors. Both methods are closely related to the legality and legal compliance aspects of the company which must be maintained.     Shares Sale and Purchase Scheme The first scheme is the simplest, purchasing and selling shares. If the Business Actor uses this scheme, the funds provided by investors will not go to the Company, but will be given directly to shareholders who sell their shares to investors. This scheme is often used…

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4 Misconceptions Regarding the Establishment of a PMA Company in Indonesia

4 Misconceptions Regarding the Establishment of a PMA Company in Indonesia

By adminbpl | Dec 29, 2020

4 Misconceptions Regarding the Establishment of a PMA Company in Indonesia Indonesia is one of the countries in Southeast Asia that has the potential for natural resources and a well-developed economic climate. Besides, the Indonesian government keeps trying to make the access to investment development easier by issuing many laws and regulations related to simplifying licensing. These things have led to an increasing number of foreign investors who are planning and interested in developing their business in Indonesia. However, as there are many foreign investors developing their business in Indonesia, there are many misconceptions or things that are often misunderstood regarding the establishment of a Foreign Investment Company (PMA) in Indonesia. This article will explain what misconceptions often occur regarding the establishment of PMA in Indonesia and what the actual rules are. Authorized Capital is a Minimum of 10 Billion Rupiah Many foreign investors understand that the capital requirement to set up a PMA in Indonesia is a minimum of 10 billion rupiah. This is not wrong, but it is often not understood that…

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Can a Third Party Failing a Motion to Intervene in an Arbitration Dispute?

Can a Third Party Failing a Motion to Intervene in an Arbitration Dispute?

By adminbpl | Dec 28, 2020

Can a Third Party Failing a Motion to Intervene in an Arbitration Dispute? “The examination of disputes by the Arbitrator or the Arbitral Tribunal is carried out in private so that it can only be known by the Arbitrator and the Parties to the Disputes. However, the Third Party May Filing a Motion to Intervene with Provisions Regulated in the Law “ Basically, the agreement is only binding to the party who made the agreement. Likewise, if a dispute occurs, it only involves the parties in the agreement. Fundamentally, the agreement adheres to the principle privity of contract as regulated in Article 1340 of Indonesian Civil Code (KUHPerdata) that an agreement is only valid between the parties that make it: “Agreement only applies between the parties who made it. Agreement cannot harm third parties. Agreement cannot benefit third parties other than in the matters specified in article 1317“ However, third parties to an agreement have the opportunity to filing a motion to intervene in the trial process. By filing a motion to intervene, third…

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Important Note on the Terms of Use of Foreign Workers for Start-ups According To the Job Creation Law

Important Note on the Terms of Use of Foreign Workers for Start-ups According To the Job Creation Law

By adminbpl | Dec 22, 2020

Important Note on the Terms of Use of Foreign Workers for Start-ups According To the Job Creation Law Important Note on the Terms of Use of Foreign Workers for Start-ups According To the Job Creation Law Although the responsibility of digital start-up companies regarding the terms of use of expatriate is not directly mentioned, the Job Creation Law outlines several things that should be fulfilled by the digital Start-ups if they want to bring in Foreign Workers. Since the beginning of the drafting and discussion of Law Number 11 of 2020 concerning Job Creation (Job Creation Law), it has become a hot topic in society. One of which is related to the use of Foreign Workers (TKA) in Indonesia. In the Considering section of the Job Creation Law, the government expected wider job opportunities for Indonesian workers. To support this, one of the main goals of the Job Creation Law is to improve the investment ecosystem as well as the convenience, protection, and empowerment of cooperatives and micro, small, and medium-sized businesses. In order…

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Is a Nominee Arrangement Regarding Company Shares Ownership Allowed in Indonesia?

Is a Nominee Arrangement Regarding Company Shares Ownership Allowed in Indonesia?

By adminbpl | Aug 5, 2020

Is a Nominee Arrangement Regarding Company Shares Ownership Allowed in Indonesia? In March 2020, Budi and Frans want to establish a foreign investment company (PT PMA) to run a potato cultivation business. Budi is an Indonesian citizen., while Frans is a Chinese citizen who has lived in Indonesia for a long time. They plan to export potato harvest from the cultivation to other countries. To realize this business, they agree to set aside their assets to be paid up as shares in the company. Frans and Budi agrees that the breakdown of shares ownership in the PT PMA should be 63% (sixty three percent) for Frans and 37% (thirty seven percent) for Budi. However, this becomes an issue. Under the applicable Negative Investment List (Presidential Regulation No. 44 of 2016, foreign shareholding ownership for potato cultivation business is 30% (thirty percent). Under their current plan, the shares ownership percentage of Frans (63%) is too high and does not comply with the Negative Investment List. Frans insisted to have the majority of control in the…

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Things Foreigners with Telex Visas Need to Know during Covid-19 Pandemic in Indonesia

Things Foreigners with Telex Visas Need to Know during Covid-19 Pandemic in Indonesia

By adminbpl | Jul 10, 2020

Things Foreigners with Telex Visas Need to Know during Covid-19 Pandemic in Indonesia Covid-19 outbreaks have urged the Indonesian Government to implement some policies to prevent worse situations. One of the major issues to regulate is the movement of foreigners. On 2 April 2020, the Ministry of Law and Human Rights Regulation Number 11 of 2020 about Temporary Prohibition of Foreigners from Entering Indonesia (MOL 11/2020) was issued. The regulation has confused expatriates who intend to enter Indonesia, especially those who already obtained the telex visa or visa approval. Telex Visa will be valid for 60 days since its issuance date. During that time, foreigners must claim their Telex Visa to the Embassy of Republic Indonesia in their country.  However, amid the Corona Virus outbreak, the policy to prevent foreigners from entering Indonesia is enforced, and some Indonesian Embassies also close their offices and do not accept any visa application. This condition sparks worries among foreigners who have obtained Telex Visa since their Telex Visas will expire before they claim it. In response to…

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Companies Must Know The Provisions of The Transfer of Employee To Other Companies In One Company Group

Companies Must Know The Provisions of The Transfer of Employee To Other Companies In One Company Group

By adminbpl | Jun 15, 2020

Companies Must Know The Provisions of The Transfer of Employee To Other Companies In One Company Group “The company may not arbitrarily transfer employees to other companies, this cause a change in the status of the employer, employment relations and legal relations basis” Limited company can establish a subsidiary or subsidiaries to execute the Parent Company business. Limited Company Law that has the principle of limited liability, results in all legal actions undertaken by the company including its subsidiaries to be accounted for separately even in one group of companies. This means that the Parent Company and its subsidiaries have their respective responsibilities for legal actions. Companies that have subsidiaries may potentially make a policy of transferring employee from one company to other company in the group (“transfers”). The purpose is none other than to help the subsidiary’s business processes to proceed in accordance with the company’s goals. THINGS THAT NEED TO BE CONCERNED IN TRANSFER OF EMPLOYEE Understand the Transfer of Employee Provisions. Mutation of Employee is Different from Transfer of Employee. Many…

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Company Obligations to Institute Company Regulations and Sanctions

Company Obligations to Institute Company Regulations and Sanctions

By adminbpl | Jun 12, 2020

Company Obligations to Institute Company Regulations and Sanctions “Companies that have at least 10 employees are required to institute company regulations. These company regulations have binding legal force if they have been approved by the local Manpower Office. If the company does not institute company regulations, the company may be subject to criminal sanctions.” The South Jakarta Regency Court (PN) judge imposed a fine of IDR 5 million or a sentence of one month in prison to the Director of PT DGI last March. The sanction was handed down because PT DGI was proven to not have Company Regulations. Obligations to have Company Regulations are regulated in Articles 108 through Article 115 of Law Number 13 of 2003 concerning Manpower (“Law 13/2003”) and Minister of Manpower Regulation Number 28 of 2014 concerning Procedures for Institution and Ratification of Company Regulations and the Institution and Registration of Collective Labor Agreements (“Permenaker 28/2014“). Basically, companies need a guideline so that operational activities can run well. Especially companies that have developed and already have many employees, it…

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