Legal System

Indonesia is constitutional Republic. Republic is based on five principles of Pancasila : Belief in one supreme of GOD, just and civilized humanity, united nation, Democracy guided by inner wisdom derived by  unanimous agreement through consensus of People’s of Representatives, and social justice throughout Republic (Preamble of Constitutions of 1945). Constitutions of 1945 divides state power into : legislative, judicative and executive.

Please download these files for brief an Indonesia Legal System and Civil Code stipulated in Indonesia :

The Legal System

The Indonesian Civil Code

Judicial System

The Indonesian judicial system comprises several types of courts under the supervision of the Supreme Court (Mahkamah Agung).  All civil cases will be brought in the first instance before the District/Lower Courts (Pengadilan Negeri), the daily court of first distance. Its jurisdiction is as a rule that of the Autonomous Region such as City or District (kota or kabupaten). According to Law No. 14 of 1970, at least three judges are required for each panel for the hearing or session to be declared valid.

Please download these files for brief Judicial or Court System and its Civil Procedure in Indonesia :

The Court System

The Civil Procedure

The Commercial Court

Business organizations

There are three models of partnership: persekutuan perdata (maatschap or private association), persekutuan firma (venootschap onder firma or firma, “FA”) and persekutuan komanditer (commanditaire venootschap, “CV”). The Indonesian Civil Code governs the first type of partnership whereas the rest are governed by both the Indonesian Civil Code and the Indonesian Commercial Code. It is not easy to determine law tradition; however, the maatschap and firma closely resemble the concept of a general partnership under the common law system whereas the commanditaire venootschap resembles limited partnership under common law system.

Please download these files for brief documents Indonesia’s commercial organizations :

Firm

Comanditaire Vennotschap (CV)

Limited Liability Company (PT)

Contract Law

Indonesian contract law is governed by two separate systems, namely modern legislation (including the Indonesian Civil Code (“Civil Code”)) and Adat Law (“Customary Law”).

Please download these files for brief documents Indonesia’s Contract Law:

Introduction of Contract

Formal Requirement of a Contract

Arbitration &

Alternative Dispute Resolution (ADR)

Arbitration which is regulated in this Law is a means of resolving a dispute outside of the general courts pursuant to written agreement of the parties to the dispute. However, not every dispute can be resolved through arbitration, it is only with respect to disputes concerning rights which according to law are fully controlled by the parties to the dispute pursuant to their mutual consent

Please download these files for brief documents Indonesia’s Alternative Dispute Resolution & Arbitration as commercial dispute settlement mechanism :

Arbitration

Alternative Dispute Resolution (ADR)

The Enforcement of International Arbitration Awards

Investment

Please download these files for brief documents Indonesia’s Foreign Investment Regulation mechanism :

Obligations on Foreign Investors

Bankruptcy

Basically, like other bankruptcy system the parties in Indonesian Bankruptcy Law are the debtors and the creditors with the receiver to assist them in reaching settlement.

Please download these files for brief documents Indonesia’s Bankruptcy Law :

Bankruptcy Law

Secure Transaction

In Indonesia Hak Tanggungan (Indonesian Security Right upon Land or Mortgage) and Fiduciary Security are now two widely used forms of security, especially since both are already regulated under Indonesian law with the implementation of Law No. 4 of 1996 on Hak Tanggungan and Law No. 42 of 1999 on Fiduciary Security (Undang-Undang Hak Tanggungan/ “UUHT”). While Hak Tanggungan is only over immovable property, land and land related object, the fiduciary security is designed to cover moveable property either tangible and also immovable property that can not be encumbered with the Hak Tanggungan.

Please download these files for brief documents Indonesia’s Security Transaction Regulation mechanism :

Mortgage or Security Right upon Land

Fiduciary Security Law

Real Estate & Land Law

The basic principles and provisions of the present land tenure structure in Indonesia can be found in the Basic Agrarian Law, Law No. 5 of 1960 (BAL), which came into effect on 24 September 1960. The nomenclature is a little misleading as the BAL does not only regulate agrarian matters it also regulates Indonesia’s vast natural resources including minerals, territorial waters, fish and other marine resources, oil and gas, space, and almost all other natural resources deemed critical to the ongoing national development of Indonesia. Nevertheless, the BAL is generally referred to as the Land Law.

Please download these files for brief documents Indonesia’s Real Estate & Land and its regulation mechanism :

Introductory of Land Law

Type of Land Title

The Land Acquisition Process

Anti-Monopoly Law

Therefore, the new government initiated a new regulation that regulated the framework for competition and unfair business practices. The DPR passed Law No. 5 of 1999 on the Prohibition of Monopolistic Practices and Unfair Business Competition (“Law No 5/1999” or the “Anti-Monopoly Law”) on 5 March 1999. The primary objectives of his law were to improve the efficiency of the national economy in order to reach the desired levels of national prosperity, to create an environment conducive for business, to stop monopolistic and unfair trade practices, and to create both efficacy and efficiency in business.

Please download these files for brief documents Indonesia’s Prohibition of Monopolistic Practices and Unfair Business Competition and its regulation mechanism :

Anti Monopolistic

The Commission for the Supervision of Business Competition

Taxation Law

The foundation of tax Law in Indonesia is the Constitution, particularly Article 23A, which states, “Tax and other levies which are characterized as compulsory for the needs of State are to be regulated by law.

Please download these files for brief documents Indonesia’s Taxation :

Taxation : an Introductory