Brief Introduction to Indonesia’s Job Creation / Omnibus Law on Broadening of the Investment Ecosystem and Business Activities, the Ease of Doing Business and Acceleration of National Strategic Projects Oriented Towards National Interests 

December, 2020 - Vincent Lie, Heru Mardijarto

Law No. 11 of 2020 on Job Creation (the “Job Creation Law” or known as the Omnibus Law) was issued and came into effect on 2 November 2020. It is mainly based on the principles of the equalization of rights, legal certainty, greater ease of doing business, togetherness, and independence. The aim of greater ease of doing business is job creation supported by simple, easy and fast business procedures which will encourage increased investment, empower micro, small and medium-scale enterprises (“MSME”) to strengthen the economy and make job opportunities available to a broader spectrum of the Indonesian people.

The changes made by this Job Creation Law affect 78 Laws and provides several strategic policies among others on (i) broadening of the investment ecosystem and business activities; (ii) the ease of doing business; and (iii) acceleration of national strategic projects oriented towards national interests.

When the Job Creation Law come into effect: a. all laws and regulations under the applicable laws which contradict the Job Creation Law or contradict higher laws or regulations or court rulings must be harmonized and synchronized coordinated by the ministry or institution that administers government affairs in the area of determining laws and regulations. This harmonization and synchronization will be regulated further under a Government Regulation; b. business licenses (perizinan berusaha) or sectoral licenses which have been issued will remain valid until their term expires; c. business licenses and/or sectoral licenses issued before the Job Creation Law comes into effect may remain valid in accordance with the Job Creation Law; and d. business licenses already applied for must be adjusted to the provisions of the Job Creation Law.

In addition, the implementing regulations of the Job Creation Law must be issued within 3 (three) months of the effectiveness of the Job Creation Law, and all implementing regulations of the laws which have been amended by the Job Creation Law will remain valid as long as they do not contradict the Job Creation Law but they must be adjusted to the Job Creation Law within 3 (three) months.

This Advisory is meant to briefly introduce and provide a quick insight to the changes made by the Job Creation Law specifically on environment & spatial use, marine & fisheries, agriculture, energy & mineral resources, food, trade & industry, public works & construction, transportation and traffic, education, culture, tourism and religion, telecommunications, defence & security, housing and apartments, investment and banking, health, hospital and drugs, patents, trademarks and geographical indications, business competition, taxes, and others. Further independent analysis on the effect to each business sectors will be required for more comprehensive understanding.


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