DRAFT AMENDMENTS TO THE ITE LAW PASSED

The highly anticipated draft amendment to Law No. 11 of 2008 (“ITE Law”) which was anticipated in 2015, was finally passed by the House of Representatives of the Republic of Indonesia (Dewan Perwakilan Rakyat Republik Indonesia (DPR RI) – “House”) on 27 October 2016 (“Draft Amendments”). The draft will automatically enter into force if the President has still not signed it within 30 days of it being passed by the House. These Draft Amendments therefore came into effect on 28 November 2016.

FOREIGN EXCHANGE TRANSACTION AGAINST RUPIAH

In early September, Bank Indonesia issued two Bank Indonesia Regulations regarding foreign exchange transactions against Rupiah: (i) Bank Indonesia Regulation No. 18/18/PBI/2016 on Foreign Exchange Transactions against Rupiah between Banks and Domestic Parties (“PBI 18/18”) and (ii) Bank Indonesia Regulation No. 18/19/PBI/2016 on Foreign Exchange Transactions against Rupiah between Banks and Foreign Parties (“PBI 18/19”). These two Bank Indonesia regulations replace certain Bank Indonesia regulations, including certain provisions under Bank Indonesia Regulation No. 7/31/PBI/2005 on Derivative Transactions and its amendments; Bank Indonesia Regulation No. 16/16/PBI/2014 on Foreign Exchange Transactions against Rupiah between Banks and Domestic Parties; and Bank Indonesia Regulation No. 16/17/PBI/2014 on Foreign Exchange Transactions against Rupiah between Banks and Foreign Parties.

FURTHER REGULATION ON FOREIGN OWNED PROPERTY

Following the issuance of Government Regulation No. 103 of 2015 on the Ownership of Houses or Housing by Foreigners Domiciled in Indonesia dated 22 December 2015 (“GR 103/2015”), the government, through the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency (“MOA”) issued Regulation No. 29 of 2016 on The Procedure for Granting, Releasing and Transferring Ownership of Houses or Housing to Foreigners Domiciled in Indonesia on 26 September 2016 (“MOA Reg. 29/2016”) to replace the previous regulation, MOA Regulation No. 13 of 2016, as it was considered suboptimal. MOA Reg. 29/2016 was issued to implement Article 11 of GR 103/2015, which required further guidelines for foreigners seeking to own houses or other forms of residential property (“Residential Property”) or wishing to release or transfer their rights over Residential Property.

MINIMUM WAGES IN DKI JAKARTA PROVINCE

To implement Government Regulation No. 78 of 2015 on Wages, the Governor of DKI Jakarta has just issued Governor’s Regulation No. 227 of 2016 on The Provincial Minimum Wage for 2017 (“Governor Regulation 227/2016”). Governor’s Regulation 227 of 2016 came into effect on the date of its promulgation, ie 31 October 2016 and the required minimum wage will apply from 1 January 2017.

DUTY ON THE ACQUISITION OF RIGHTS OVER LAND AND BUILDINGS FOR DKI JAKARTA PROVINCE

Following the issuance of Government Regulation No. 34 of 2016 on New Tariffs for Income Tax on Transfers of and Conditional Sale and Purchase Agreements for Land and/or Buildings, the Regional Government of DKI Jakarta Province has just issued the following new regulation which provide zero duty or an exemption from the obligation to pay Duty on the Acquisition of Rights over Land and Buildings (Bea Perolehan Hak Atas Tanah dan Bangunan/ “BPHTB”): Regulation of the Governor of DKI Jakarta No. 193 of 2016 on The 100% (one hundred percent) Exemption from Duty on the Acquisition of Rights over Land and Buildings as a Result of a Sale and Purchase for the First Time and/or the Imposition of 0% (zero percent) Duty on the Acquisition of Rights over Land and Buildings as a Result of Inheritance for land/buildings with a nominal value of up to IDR2,000,000,000 (two billion Rupiah) (“Governor’s Regulation 193/2016”). Governor Regulation 193/2016 came into effect upon the date of its promulgation ie 21 October 2016.