As part of the implementing regulations to the Omnibus Law (Law No. 11 of 2020), the government introduces a new investment list to replace the Negative Investment List under Presidential Regulation No. 44 of 2016 and Presidential Regulation No. 76 of 2007. The new investment list, aptly titled Priority Investment List, is issued under Presidential Regulation No. 10 of 2021 on Investment Business Activities.

Following the enactment of Law No. 11 of 2020, commonly known as the Omnibus Law, the government has introduced the necessary implementing regulations to the law. Of the proposed changes under the Omnibus Law, one, in particular, will affect all businesses, namely the shift from a commitment-based licensing regime to a risk-based licensing regime. The new regime is reflected under Government Regulation No. 5 of 2021 on the Implementation of Risk-Based Business Licenses. It is aimed to administer a more streamlined and efficient business licensing process, and in some instances, even removing the licensing requirement for certain businesses.

As discussed in our initial client update (click here to read), the Omnibus Law (Law No. 11 of 2020) gave the employment sector a significant overhaul. But the large-scale change also created gaps. Now, the government seeks to fill in these gaps by enacting four implementing regulations for this sector. These regulations are:

One of the topics that were left open-ended under the Omnibus Law was the removal of the cap on administrative fine and criminal sanctions for violations of the Competition Law (Law No. 5 of 1999) (click here to read our previous client update). We mentioned then that a new cap is likely to be introduced. The newly issued government regulation for the Omnibus Law on competition (Government Regulation No. 44 of 2021 on the Implementation of Prohibition of Monopolistic Practices and Unfair Business Competition) confirmed this finding.

One of the main themes of the Omnibus Law (Law No. 11 of 2020 on Job Creation) is efficiency. This theme can be seen, among others, in the streamlining of licenses and their application. In the telecommunications sector, the Omnibus Law amends the Telecommunications Law (Law No. 36 of 1999) and the Broadcasting Law (Law No. 32 of 2002), by introducing efficiency through sharing of radio frequency spectrum, transfer of radio frequency spectrum, and sharing of infrastructure.

In our first real estate client update, we discussed changes to the spatial utilisation permit, building permits, amendments under the Housing Law and Apartment Law, and foreign ownership of apartment units. In this second update, we discuss other critical changes to this sector, which include land procurement for public purposes, the establishment of the Land Bank, and strengthening of the Right to Manage (Hak Pengelolaan) title.

One of the sectors that receive a heavy overhaul under the Omnibus Law (Law No. 11 of 2020 on Job Creation) is the real estate sector, where the government intends to improve the ease of doing business. The Omnibus Law amends several stipulations among others in the Spatial Law, the Building Law, the Housing Law, and the Apartment Law, as well as introducing new standalone clauses that do not refer to any specific laws.

With a major overhaul in sectors such as investment and employment, Law No. 11 of 2020 on Job Creation ("Omnibus Law") does not make significant changes to shipping law in Indonesia. Our initial analysis seems to show that there are no major controversies surrounding this sector. We detail some notable points under the Omnibus Law below.

After submission by the House of Representatives to the President on 14 October 2020, the Job Creation Law was finally enacted as Law No. 11 of 2020 on Job Creation (“Omnibus Law”) on 2 November 2020. This law is published in the State Gazette of the Republic of Indonesia of 2020 No. 245 and Supplement to the State Gazette No. 6573.

Many hoped that investing in Indonesia will be simpler for investors after the Omnibus Law becomes effective. One of the ways in which the Omnibus Law seeks to simplify investment in Indonesia is by maximising the potential of the One Stop Service ("OSS") system. Despite being in operation since 2018, the OSS still operates in conjunction with manual licensing application or process. Investors often have to juggle both processes to achieve the desired outcome.

With the spotlight on big ticket items such as employment, the government, through the Omnibus Law, has also revised several provisions of the Competition Law (Law No. 5 of 1999). As we will discuss below, while these revisions appeared to be minor, they may have severe consequences.

In Indonesia, as in many other countries, employment law is often a sensitive issue, and past governments have shied away from resolving issues surrounding employment. With the enactment of the Omnibus Law, various provisions of the current Labour Law (Law No. 13 of 2003) that are deemed to be "too restrictive" or "too difficult" are either removed entirely or updated.

After much debate, the Indonesian House of Representatives finally approved the Omnibus Law. In anticipation of the questions that will arise, we will be launching a series of client update titled "Omnibus Law 2020: Overview Series" within the upcoming weeks. The updates will dissect and discuss the various elements and issues of the Omnibus Law.