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Land disputes involving uncertified land remain a common legal issue in Indonesia. The absence of a land certificate does not automatically extinguish a person’s legal rights over a parcel of land. However, it may create significant challenges in establishing ownership, particularly when multiple parties assert competing claims over the same property.

In resolving land disputes, the validity of land transfer documents, historical records of land possession, property boundaries, and supporting evidence are essential factors in determining the lawful holder of land rights.

Legal Status of Sale and Purchase Deeds and Land Certificates

Pursuant to Article 37 paragraph (1) of Government Regulation No. 24 of 1997 concerning Land Registration, the transfer of land rights through sale and purchase, grants, exchanges, and other legal transactions must, in principle, be evidenced by a deed executed before an authorized Land Deed Official (Pejabat Pembuat Akta Tanah or “PPAT”) for registration purposes.

A Sale and Purchase Deed (Akta Jual Beli or “AJB”) serves as documentary evidence of a land sale and purchase transaction, whereas a land certificate constitutes formal evidence of registered land rights and carries stronger evidentiary value in establishing ownership.

Under Article 32 paragraph (1) of Government Regulation No. 24 of 1997, a land certificate constitutes strong evidence of the physical and juridical particulars recorded therein, provided that such information corresponds with the relevant survey document and land register.

Nevertheless, ownership rights over uncertified land may still be established through other legally admissible evidence, including land history records, documents evidencing the acquisition of land rights, records of land possession, and relevant witness testimony.

The evidentiary weight of such documents depends on their authenticity, legal validity, and consistency with other supporting evidence.

Land Disputes Arising from Inheritance

Land disputes may also arise when a property is claimed as inherited land but the transfer of rights through inheritance has not been formally registered.

Pursuant to Article 42 of Government Regulation No. 24 of 1997, the registration of a transfer of registered land rights through inheritance requires supporting documentation, including the relevant land certificate, the deceased landowner’s death certificate, and documentary evidence establishing the legal status of the heirs.

Where a dispute arises, the party claiming ownership through inheritance must establish the legal relationship with the deceased, the deceased’s ownership rights, and the historical ownership records of the disputed land.

Failure to register the transfer of land rights through inheritance does not automatically extinguish the legal rights of the heirs. Nevertheless, proper land registration remains essential to ensuring legal certainty and preventing future disputes.

Resolution of Land Boundary Disputes

Apart from ownership disputes, land-related conflicts frequently arise from unclear property boundaries, discrepancies in land measurements, or overlapping ownership claims.

To resolve such disputes, the parties may request an examination of land registration records and a reassessment of land boundaries through the relevant Land Office (Kantor Pertanahan).

Such examinations should consider ownership documents, cadastral maps, boundary markers, and statements from neighboring landowners.

Where the dispute proceeds to litigation, each party must submit legally admissible evidence supporting its respective claims.

Witness testimony may be presented as evidence; however, its evidentiary value must be assessed in conjunction with other relevant evidence.

Indonesian civil procedural law recognizes the principle of unus testis nullus testis, under which the testimony of a single witness, without corroborating evidence, is generally insufficient to establish a disputed fact.

Legal Remedies for Resolving Land Disputes

Land disputes involving uncertified property may initially be resolved through negotiation or mediation between the parties.

Where the dispute concerns land registration or administrative matters, the parties may also submit a complaint to the relevant Land Office for examination and resolution within its statutory authority.

If an amicable settlement cannot be reached, the aggrieved party may initiate legal proceedings before the court having jurisdiction over the dispute.

In civil proceedings, a party dissatisfied with a first-instance judgment may pursue an appeal before the relevant High Court and, subject to applicable legal requirements, file a cassation appeal with the Supreme Court of the Republic of Indonesia.

Cassation proceedings primarily concern the proper application of law rather than a comprehensive reassessment of factual findings and evidence examined by the lower courts.

Accordingly, grounds for cassation should focus on alleged errors in the application of substantive law or violations of procedural law committed by the lower courts.

Furthermore, an extraordinary judicial review (Peninjauan Kembali or “PK”) may be sought against a final and binding court judgment where legally recognized grounds exist, including the discovery of new evidence (novum) that satisfies the applicable statutory requirements.

Conclusion

Uncertified land remains legally protectable under Indonesian law, provided that the claimant can establish valid and legally recognized rights over the property.

Nevertheless, the absence of a land certificate may create substantial evidentiary challenges in disputes concerning ownership, inheritance, or land boundaries.

Landowners are therefore strongly encouraged to maintain complete documentation relating to the acquisition of land rights, verify historical ownership records, establish clear property boundaries, and complete the necessary land registration procedures with the relevant Land Office.

Where a dispute has already arisen, its resolution should be based on legally admissible evidence and pursued through the appropriate legal mechanisms, including mediation, administrative land dispute resolution, or judicial proceedings.

Ultimately, proper documentation and registration of land rights play a fundamental role in ensuring legal certainty, safeguarding property interests, and minimizing the risk of future land disputes in Indonesia.

Legal References

1. Law No. 5 of 1960 concerning Basic Agrarian Principles.
2. Government Regulation No. 24 of 1997 concerning Land Registration, as amended by Government Regulation No. 18 of 2021.
3. Regulation of the State Minister of Agrarian Affairs/Head of the National Land Agency No. 3 of 1997 and its subsequent amendments.
4. Law No. 14 of 1985 concerning the Supreme Court, as amended.
5. Law No. 48 of 2009 concerning Judicial Power.
6. Applicable provisions of Indonesian civil procedural law.

The use of a false name is not merely a matter of concealing one’s true identity. Under certain circumstances, such conduct may constitute a criminal offense, particularly where a false name is used to obtain an unlawful benefit, deceive another person, falsify documents, or unlawfully use another person’s personal data.

Since 2 January 2026, Indonesia’s criminal law framework has been governed by Law No. 1 of 2023 concerning the Criminal Code (“New Criminal Code”), as adjusted by Law No. 1 of 2026 concerning Criminal Law Adjustments. The New Criminal Code has replaced various provisions previously regulated under the former Criminal Code.

Accordingly, under what circumstances may the use of a false name or identity result in criminal liability?

Use of a False Name as Fraud

One of the clearest circumstances involving the use of a false name is regulated under Article 492 of Law No. 1 of 2023, which governs the criminal offense of fraud.

In principle, a person may be subject to criminal liability if, with the intent to unlawfully benefit themselves or another person, they use a false name or false capacity, fraudulent means, or a series of false statements to induce another person to:

• surrender property;
• extend credit;
• acknowledge a debt; or
• discharge a receivable.

Such conduct is punishable by imprisonment for a maximum of 4 (four) years or a Category V fine, which is currently capped at IDR 500 million.

For the offense of fraud to be established, the use of a false name cannot merely consist of providing an incorrect identity. There must be a connection between the false identity or deceptive means employed by the perpetrator and the victim’s subsequent act of surrendering property, extending credit, acknowledging a debt, or discharging a receivable.

Accordingly, an essential element is the existence of a causal relationship between the deceptive means employed by the perpetrator and the victim’s reliance on such deception, which subsequently causes the victim to perform an act resulting in loss.

The Elucidation of Article 492 further explains that the offense of fraud is completed when the injured party performs the act intended by the perpetrator.

What If a False Identity Is Incorporated into an Authentic Deed?

The use of a false identity may also fall within the scope of document forgery, particularly where false information or identity is incorporated into an authentic deed.

The falsification of authentic deeds is regulated under Article 392 of Law No. 1 of 2023.

In principle, document forgery carries more serious legal consequences where it involves documents possessing special evidentiary value, including authentic deeds.

Criminal liability may arise not only for the person who creates or falsifies the relevant document. A person who knowingly uses a forged document or authentic deed as if it were genuine and authentic may also be subject to criminal sanctions where such use is capable of causing loss.

Accordingly, the use of a false name in an official document may give rise not merely to an issue concerning false identity, but may also constitute a criminal offense involving document forgery.

Falsification of Identity in Passports and Immigration Documents

The New Criminal Code also specifically regulates the use of false identities in travel and immigration documents.

Under Article 398 of Law No. 1 of 2023, a person may be subject to criminal liability for unlawfully creating or falsifying:

• a passport;
• a travel document in lieu of a passport; or
• a document issued pursuant to laws and regulations governing permission for foreign nationals to enter and reside in Indonesia.

The provision also covers conduct involving a request for the issuance of such documents under a false name, false given name, or false circumstances, with the intention of using, or causing another person to use, such document as if it were genuine.

Such conduct is punishable by imprisonment for a maximum of 5 (five) years or a Category V fine, which is capped at IDR 500 million.

A person who knowingly uses such false or falsified document as if it were genuine may also be subject to the same criminal penalty.

Use of a False Name from the Perspective of the Personal Data Protection Law

In addition to the Criminal Code, the use and falsification of identity must also be considered from the perspective of Law No. 27 of 2022 concerning Personal Data Protection (“PDP Law”).

Under the PDP Law, a person’s full name constitutes general personal data.

Article 66 of the PDP Law expressly prohibits any person from creating false personal data or falsifying personal data with the intention of benefiting themselves or another person where such conduct may result in loss to another person.

Pursuant to Article 68 of the PDP Law, as adjusted by Law No. 1 of 2026, such conduct may be punishable by:

imprisonment for a maximum of 6 (six) years and/or a Category V fine.

Under the New Criminal Code, a Category V fine is capped at IDR 500 million.

Accordingly, a person who intentionally creates or falsifies an identity for the purpose of obtaining a benefit, where such conduct may cause loss to another person, may potentially be subject to criminal liability not only under the Criminal Code but also under the personal data protection regime.

What If the Perpetrator Uses Another Person’s Identity?

A different legal issue arises where the perpetrator does not merely create a fictitious name but instead uses another person’s name or personal data without lawful authority.

The PDP Law prohibits several forms of unlawful conduct involving another person’s personal data, including unlawfully obtaining or collecting, disclosing, and using personal data.

Following the adjustments introduced under Law No. 1 of 2026, the relevant criminal sanctions include:

1. Unlawfully Obtaining or Collecting Personal DataA person who intentionally and unlawfully obtains or collects personal data belonging to another person with the intention of benefiting themselves or another person, where such conduct may result in loss to the Personal Data Subject, may be subject to imprisonment for a maximum of 5 (five) years and/or a Category IV fine.
2. Unlawfully Disclosing Personal DataA person who intentionally and unlawfully discloses personal data belonging to another person may be subject to imprisonment for a maximum of 4 (four) years and/or a Category IV fine.
3. Unlawfully Using Personal DataA person who intentionally and unlawfully uses personal data belonging to another person may be subject to imprisonment for a maximum of 5 (five) years and/or a Category IV fine.

Pursuant to Article 79 of Law No. 1 of 2023, a Category IV fine is capped at IDR 200 million, while a Category V fine is capped at IDR 500 million.

Corporations May Also Be Held Criminally Liable

Criminal offenses involving personal data are not limited to acts committed by individuals.

Where a criminal offense is committed by a corporation, criminal liability under the PDP Law may, subject to the applicable laws and regulations, be imposed on the corporation as well as certain individuals involved in the offense, including its management, controlling persons, persons giving instructions, and/or beneficial owners.

In addition to criminal fines, a corporation may also be subject to additional criminal sanctions, including:

• confiscation of profits and/or assets obtained from or resulting from the criminal offense;
• suspension of all or part of the corporation’s business activities;
• permanent prohibition from carrying out certain activities;
• closure of all or part of the corporation’s business premises and/or activities;
• performance of obligations previously neglected;
• payment of compensation;
• revocation of licenses; and/or
• dissolution of the corporation.

These provisions demonstrate that the misuse of identity and personal data in the course of business activities may have significant legal consequences not only for individual perpetrators but also for corporations involved in such conduct.

Victims May Seek Compensation

In addition to criminal liability, a person whose personal data has been unlawfully used or misused has the right to seek compensation for violations involving the processing of their personal data.

From a civil law perspective, the affected person may also consider filing a claim based on an unlawful act (perbuatan melawan hukum) under Article 1365 of the Indonesian Civil Code, provided that the elements of an unlawful act, fault, loss, and causation can be established.

Accordingly, the misuse of another person’s identity may potentially give rise to liability under criminal law, personal data protection law, and civil law, depending on the nature and circumstances of the conduct.

Not Every Use of a False Name Automatically Constitutes a Criminal Offense

It is important to emphasize that the mere use of a false name does not automatically constitute a criminal offense.

Criminal liability will depend on the purpose for which the false identity is used, the manner in which it is used, the consequences arising from such use, and whether all statutory elements of the relevant criminal offense are satisfied.

For example, the use of a false name may constitute a criminal offense where it is:

• used to deceive another person into surrendering property, extending credit, acknowledging a debt, or discharging a receivable;
• incorporated into a forged document or authentic deed;
• used to obtain or falsify a passport or immigration document;
• used to create or falsify personal data for the purpose of obtaining a benefit in a manner that may cause loss to another person; or
• used as part of the unlawful use of another person’s personal data.

Therefore, determining the appropriate criminal provision requires more than simply establishing that a person has used a name other than their true name. The context, purpose, manner of use, and resulting consequences are critical in determining the appropriate legal characterization of the conduct.

Conclusion

The use of a false name or identity may give rise to criminal liability under several areas of Indonesian law.

First, where a false name is used as a means of inducing another person to surrender property, extend credit, acknowledge a debt, or discharge a receivable, the conduct may constitute fraud under Article 492 of Law No. 1 of 2023.

Second, where a false identity is incorporated into an authentic deed or certain other documents, the perpetrator may be subject to the criminal provisions governing document forgery.

Third, the use of a false identity in connection with the issuance or use of passports and immigration documents may be subject to Article 398 of Law No. 1 of 2023.

Fourth, where the conduct involves creating or falsifying personal data, or unlawfully using another person’s personal data, the perpetrator may also be subject to criminal liability under the Personal Data Protection Law.

Ultimately, the legal consequences of using a false name depend significantly on how the false identity is used, the purpose for which it is used, and the legal consequences or losses resulting from such conduct.

Legal Basis

1. Indonesian Civil Code (Burgerlijk Wetboek);
2. Law No. 27 of 2022 concerning Personal Data Protection;
3. Law No. 1 of 2023 concerning the Criminal Code;
4. Law No. 1 of 2026 concerning Criminal Law Adjustments; and
5. Government Regulation No. 33 of 2026 concerning the Implementing Regulation of Law No. 27 of 2022 concerning Personal Data Protection.*

The rapid development of social media has made it increasingly easy to record and share photographs or videos. However, where a recording depicts an identifiable individual and is subsequently disseminated without that individual’s consent, such conduct may give rise to legal issues, particularly from the perspective of personal data protection.

Facial Images as Personal Data

Pursuant to Article 1 point 1 of Law No. 27 of 2022 on Personal Data Protection (“PDP Law”), Personal Data means data relating to an individual who is identified or identifiable, either independently or in combination with other information, directly or indirectly, through electronic or non-electronic systems.

The PDP Law classifies Personal Data into two categories, namely general Personal Data and specific Personal Data.

One category of specific Personal Data is biometric data. The Elucidation of Article 4 paragraph (2) letter b of the PDP Law explains that biometric data refers to data relating to an individual’s physical, physiological, or behavioral characteristics that enable the unique identification of that individual, such as facial images or dactyloscopic data. Biometric data also encompasses an individual’s unique characteristics, including fingerprints, retinal scans, and DNA samples.

Accordingly, an individual’s facial image contained in a photograph or recording that enables the identification of such individual may constitute Personal Data and, where it possesses characteristics that enable unique identification, may qualify as biometric data.

An individual to whom Personal Data relates is referred to as a Personal Data Subject and is entitled to various rights protected under the PDP Law.

Rights of Personal Data Subjects over Recordings Depicting Them

The PDP Law grants Personal Data Subjects the right to obtain information regarding the clarity of identity, the legal basis of interest, the purpose of requesting and using Personal Data, and the accountability of the party requesting or controlling such Personal Data.

In addition, Personal Data Subjects have the right to terminate the processing, erase, and/or destroy Personal Data concerning them, subject to the applicable laws and regulations.

In principle, a Personal Data Controller is required to erase Personal Data where:

1. the Personal Data is no longer necessary for achieving the purpose of its processing;
2. the Personal Data Subject has withdrawn his or her consent to the processing;
3. the Personal Data Subject has submitted a request for erasure; or
4. the Personal Data was obtained and/or processed unlawfully.

Accordingly, an individual whose face or identity appears in certain content may, in principle, have legal grounds to request the termination of processing or removal of such content, subject to the requirements stipulated under the PDP Law.

Does Recording an Individual Without Consent Violate the PDP Law?

Under the PDP Law, activities involving the acquisition, collection, processing, analysis, storage, rectification, updating, display, publication, transfer, dissemination, disclosure, and/or erasure or destruction of Personal Data constitute Personal Data Processing.

Accordingly, recording an individual and, in particular, using or disseminating a recording containing that individual’s Personal Data may fall within the scope of Personal Data Processing.

Any Personal Data Processing must have a valid legal basis for processing, as stipulated under Article 20 of the PDP Law.

One such legal basis is the explicit valid consent of the Personal Data Subject for one or more specific purposes that have been communicated by the Personal Data Controller to the Personal Data Subject.

Such consent must be provided in writing or in recorded form and may be given electronically or non-electronically. Consent must also be obtained freely, specifically, in an informed manner, and unambiguously.

Prior to obtaining such consent, the Personal Data Controller is also required to provide the Personal Data Subject with relevant information regarding the processing of Personal Data in a concise, transparent, and easily understandable manner and in accordance with the relevant Personal Data Processing activities.

Nevertheless, consent is not the sole legal basis for Personal Data Processing. Article 20 of the PDP Law recognizes several other lawful bases for processing. Therefore, whether a particular recording or dissemination constitutes a violation of the PDP Law must be assessed by considering the purpose and context of the processing, the party carrying out such processing, and whether a valid legal basis for the processing exists.

Prohibition against Unlawful Disclosure of Personal Data

The PDP Law provides criminal law protection against the unlawful disclosure of Personal Data.

Article 65 paragraph (2) of the PDP Law essentially prohibits any person from unlawfully disclosing Personal Data that does not belong to them.

A violation of this provision may give rise to criminal liability in accordance with the criminal provisions stipulated under the PDP Law.

Therefore, uploading or disseminating a recording of an individual without a valid legal basis for processing may result in legal consequences where such conduct satisfies the elements of unlawful disclosure of Personal Data.

Consent under the Electronic Information and Transactions Law

The protection of Personal Data used through electronic media is also related to the provisions of the Electronic Information and Transactions Law (“EIT Law”), as amended.

In principle, the use of information through electronic media involving an individual’s Personal Data must comply with the applicable statutory provisions governing Personal Data protection.

Accordingly, the use of an individual’s recording on social media should not only be assessed under the PDP Law but also in light of other relevant provisions governing electronic systems and transactions.

Right to Request Erasure and Compensation

Where an individual considers that his or her Personal Data has been processed unlawfully, the PDP Law grants the Personal Data Subject a number of rights, including the right to request the termination of processing and erasure of Personal Data, subject to the applicable laws and regulations.

Furthermore, a Personal Data Subject has the right to file a claim and receive compensation for violations involving the processing of his or her Personal Data.

In submitting a claim for compensation, the Personal Data Subject should provide relevant information and supporting evidence, including his or her identity, data or documents supporting the claim, and information concerning the relationship between the Personal Data Subject and the party carrying out the Personal Data Processing.

If the claim for compensation is rejected or the parties fail to reach an agreement regarding compensation, the Personal Data Subject may pursue a legal claim in accordance with the mechanisms prescribed under the applicable laws and regulations.

Demanding Money in Exchange for Removing a Video: Could It Constitute Criminal Threats?

The legal implications become more serious where the party who records or disseminates the content subsequently demands a sum of money from the victim as a condition for removing or taking down such content.

Such conduct may be assessed under the provisions concerning the criminal offense of threats (pengancaman) under Law No. 1 of 2023 on the Criminal Code (“New Criminal Code”), which has been effective since 2 January 2026.

Pursuant to Article 483 of Law No. 1 of 2023, a person may be subject to criminal liability for threats where, with the intent to unlawfully benefit himself/herself or another person, by means of a threat of defamation, written defamation, or disclosure of a secret, such person compels another person to:

1. surrender property that wholly or partly belongs to such person or another person; or
2. provide a debt, acknowledge a debt, or discharge a receivable.

The offense constitutes a complaint-based offense (delik aduan), meaning that prosecution may only be initiated upon a complaint filed by the victim.

The Elucidation of Article 483 of the New Criminal Code essentially distinguishes the offense of threats from extortion based on the nature of the coercion employed. In the case of threats, the means of coercion are generally non-physical or psychological in nature, such as threats of defamation or disclosure of a secret.

Accordingly, where a person threatens to continue disseminating, disclose, or maintain content that may be detrimental to the victim unless the victim pays a certain sum of money, such conduct may be assessed as the criminal offense of threats, provided that all elements of Article 483 of the New Criminal Code are satisfied.

Conclusion

In principle, an individual’s facial image or recording that enables such individual to be identified constitutes information that may fall within the scope of Personal Data. Where such characteristics are used to enable the unique identification of an individual, such data may qualify as biometric data, which constitutes specific Personal Data.

The recording, display, disclosure, and dissemination of Personal Data constitute forms of Personal Data Processing. Accordingly, any party carrying out such processing must have a valid legal basis for processing as required under the PDP Law. Explicit consent constitutes one such legal basis, but it is not the only lawful basis for processing recognized under the PDP Law.

Where Personal Data is obtained, used, or disseminated unlawfully, the Personal Data Subject may exercise his or her rights under the PDP Law, including requesting the termination of processing or erasure of the Personal Data and seeking compensation in accordance with the applicable laws and regulations.

Furthermore, where the dissemination of content is accompanied by a demand for money and a threat of defamation or disclosure of a secret as a means of coercing the victim, such conduct may also give rise to criminal liability under the provisions concerning threats under the New Criminal Code.

Legal Basis

1. Law No. 27 of 2022 on Personal Data Protection;
2. Law No. 11 of 2008 on Electronic Information and Transactions, as amended, most recently by Law No. 1 of 2024;
3. Law No. 1 of 2023 on the Criminal Code;
4. Law No. 1 of 2026 on Criminal Penalty Adjustments; and
5. Government Regulation No. 33 of 2026 on the Implementing Regulation of Law No. 27 of 2022 on Personal Data Protection.

A court judgment that has become final and binding (inkracht van gewijsde) is a judgment that is no longer subject to ordinary legal remedies, such as appeal or cassation. This occurs where all available ordinary legal remedies have been exhausted or where the parties have failed to exercise such remedies within the prescribed time limit.

Under Indonesian civil procedural law, a final and binding judgment is of particular significance because, in principle, the dispute adjudicated therein has reached a final resolution that is binding upon the parties. Accordingly, the legal rights and obligations established by the judgment must be respected and performed by the parties in accordance with the operative provisions of the judgment.

A. Legal Force of a Final and Binding Judgment (Inkracht van Gewijsde)

A judgment that has become final and binding (inkracht van gewijsde) has binding force upon the parties to the proceedings. This means that the parties are required to respect and comply with the matters determined by the judgment.

Such binding force is related to the principle of res judicata, which, in Indonesian civil procedural practice, is also associated with the principle of ne bis in idem, under which a matter that has been adjudicated by a final and binding judgment may, in principle, not be re-examined and adjudicated in respect of the same dispute.

Pursuant to Article 1917 of the Indonesian Civil Code, a matter may, in principle, be considered the same matter (ne bis in idem) where the following elements are present:

a. the same subject matter or relief sought;

b. the same grounds or legal basis of the claim; and

c. the claim is brought by and against the same parties acting in the same legal capacities.

Accordingly, not every new claim relating to a previously adjudicated matter may automatically be deemed ne bis in idem. It must first be determined whether the foregoing elements are identical to those in the matter that has already been adjudicated by a final and binding judgment.

In addition to having binding force, a final and binding judgment (inkracht van gewijsde) also has evidentiary force (bewijzende kracht), in that the judgment constitutes an official document that may be used to establish the existence of judicial proceedings and the legal circumstances determined therein. Nevertheless, such evidentiary force must be assessed in light of the nature and substance of the judgment and its relevance to other proceedings or legal relationships.

A final and binding judgment may also have executorial force (executoriale kracht). However, not every final and binding judgment requires, or is capable of, compulsory enforcement through execution proceedings.

Under civil procedural law, judgments are generally classified as declaratoir, constitutief, or condemnatoir. A declaratoir judgment principally declares or confirms a particular legal status or legal relationship. A constitutief judgment creates, modifies, or terminates a particular legal status or legal relationship. A condemnatoir judgment imposes an obligation or orders one of the parties to perform a particular obligation, such as paying a sum of money, delivering property, vacating certain premises or property, performing a particular act, or refraining from performing a particular act.

Accordingly, the operative provisions of a condemnatoir judgment may be subject to compulsory enforcement through execution proceedings if the party against whom the judgment is rendered fails to comply with it voluntarily.

Therefore, in enforcing a final and binding judgment, due consideration must be given to the nature of its operative provisions.

B. Enforcement of a Final and Binding Judgment (Inkracht van Gewijsde)

In principle, a party upon whom an obligation is imposed by a court judgment must voluntarily perform such obligation in accordance with the operative provisions of the judgment.

However, where the judgment contains condemnatoir operative provisions, namely provisions ordering or requiring a party to perform a particular obligation, and such obligation is not voluntarily performed, the party entitled to relief under the judgment may file an application for execution with the competent court.

Accordingly, the executorial force of a judgment enables its operative provisions to be compulsorily enforced through the court where the obligated party fails to comply voluntarily.

C. Legal Remedies Following a Final and Binding Judgment (Inkracht van Gewijsde)

Although a judgment has become final and binding, Indonesian law provides, under certain circumstances, for extraordinary legal remedies, including judicial review (Peninjauan Kembali or “PK”).

Pursuant to Article 67 of Law No. 14 of 1985 concerning the Supreme Court, the provisions of which have not been amended by Law No. 5 of 2004 or Law No. 3 of 2009, an application for judicial review against a final and binding judgment in a civil case may only be filed on specific grounds exhaustively prescribed by law.

Such grounds include, among others, the discovery that the judgment was based on fraud or deceit, the discovery of decisive documentary evidence (novum), the granting of relief that was not sought or that exceeded the relief sought, the failure to adjudicate part of the relief sought, the existence of conflicting judgments, or an error or manifest mistake on the part of the judges.

Nevertheless, the filing of an application for judicial review does not, by itself, suspend or stay the enforcement of a court judgment. Article 66 paragraph (2) of Law No. 14 of 1985 concerning the Supreme Court, as amended by Law No. 5 of 2004 and most recently by Law No. 3 of 2009 (the “Supreme Court Law”), expressly provides that an application for judicial review does not suspend or stay the enforcement of a court judgment.

Accordingly, the purpose of judicial review is not to delay the enforcement of a judgment, but rather to serve as an extraordinary legal remedy through which a party may seek the re-examination and correction of a final and binding judgment where grounds recognized by law exist.

D. Legal Effects of a Final and Binding Judgment (Inkracht van Gewijsde) on the Parties

Based on the foregoing, a final and binding judgment gives rise to several legal consequences, including the following:

a. Finality as to ordinary legal remedies. The judgment becomes final insofar as ordinary legal remedies are concerned, and therefore may no longer be challenged by way of appeal or cassation.

b. Binding effect upon the parties. The judgment binds the parties to the proceedings, and the parties are therefore required to respect and perform the rights and obligations established in the operative provisions of the judgment.

c. Compulsory enforcement, where applicable. In particular, where a judgment contains condemnatoir operative provisions requiring the performance of a particular obligation, the prevailing party may apply for execution if the party against whom the judgment is rendered fails to comply voluntarily.

d. Application of the principle of ne bis in idem. The same matter may, in principle, not be re-examined and adjudicated where the requirements under Article 1917 of the Indonesian Civil Code are satisfied, namely where the claim concerns the same subject matter or relief sought, is based on the same grounds, and involves the same parties acting in the same legal capacities.

e. Availability of extraordinary legal remedies. The judgment may still be subject to an extraordinary legal remedy, such as judicial review (Peninjauan Kembali or “PK”), provided that the statutory grounds and requirements are satisfied. The filing of an application for judicial review does not deprive the judgment of its final and binding status and, in principle, does not suspend or stay its enforcement.

Accordingly, the principal legal effect of a final and binding judgment is to provide legal certainty and finality for the parties, accompanied by the obligation to respect and comply with the judgment in accordance with its operative provisions.

LEGAL BASIS

1. Article 1917 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata or “KUHPerdata”), concerning the binding force of a judgment and the requirements for the application of the principle of res judicata or ne bis in idem, particularly where the claim concerns the same subject matter, is based on the same grounds, and is brought by and against the same parties acting in the same legal capacities.
2. Law No. 14 of 1985 concerning the Supreme Court, as amended by Law No. 5 of 2004 and Law No. 3 of 2009 (“Supreme Court Law”), concerning judicial review (Peninjauan Kembali or “PK”) of final and binding court judgments.

Introduction

A garment manufacturing business is classified as an industrial activity. Under Law No. 3 of 2014 on Industry, industry generally refers to all forms of economic activities that process raw materials and/or utilize industrial resources to produce goods with higher added value or greater utility, including industrial services.

In the context of garment manufacturing, activities involving the processing of fabric through cutting, sewing, and other production processes to produce ready-to-wear garments constitute industrial activities, as such processes increase the value of the raw materials used.

As an industrial activity, a garment manufacturing business must determine the appropriate Indonesian Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia – “KBLI”) and comply with the applicable Risk-Based Business Licensing (Perizinan Berusaha Berbasis Risiko – “PBBR”) requirements through the Online Single Submission (“OSS”) System.

KBLI Classification for Garment Manufacturing Businesses

Under the applicable business activity classifications, there are two principal KBLI codes relevant to the garment manufacturing industry:

1. KBLI 14111 – Manufacture of Ready-Made Garments (Garment Manufacturing) from Textiles

KBLI 14111 covers the manufacture of ready-made garments from textiles or fabrics, including woven, knitted, or non-woven fabrics, through cutting and sewing processes to produce ready-to-wear products.

Products falling within this classification include, among others:

• shirts;
• trousers;
• kebaya;
• blouses;
• skirts;
• baby clothing;
• dance costumes;
• nightgowns;
• pajamas;
• sportswear;
• disposable garments made from textiles;
• certain components of bras, such as straps and bra cups;
• garments made from embroidered fabrics; and
• garments made from fabric scraps.

This classification does not cover the manufacture of clothing for animals.

2. KBLI 14112 – Manufacture of Ready-Made Garments (Garment Manufacturing) from Leather and Imitation Leather

KBLI 14112 covers the manufacture of ready-made garments from leather or imitation/synthetic leather through cutting and sewing processes to produce ready-to-wear products.

Products falling within this classification include, among others:

• jackets;
• coats;
• vests;
• trousers;
• skirts;
• sportswear; and
• leather clothing accessories, including leather aprons for welders.

Accordingly, the appropriate KBLI classification for a garment manufacturing business must be determined based on the principal raw materials used and the types of products manufactured.

Business Licensing for the Garment Manufacturing Industry

Every industrial business activity, whether conducted on a micro, small, medium, or large scale, is generally required to comply with the applicable business licensing requirements.

Indonesia currently applies a Risk-Based Business Licensing (PBBR) regime as regulated under Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licensing (“GR 28/2025”).

PBBR is a licensing framework under which the applicable requirements and types of business licenses are determined based on an assessment of the level of risk associated with each business activity.

Pursuant to Article 4 paragraph (1) of GR 28/2025, every business actor is required to obtain a Business License (Perizinan Berusaha – “PB”) in order to commence and conduct its business activities.

Basic Requirements for Business Licensing

Prior to obtaining a Business License, a business actor is generally required to satisfy the applicable basic requirements as stipulated under GR 28/2025.

Pursuant to Article 12 paragraph (1) of GR 28/2025, such basic requirements consist of:

1. Conformity of Spatial Utilization Activities (Kesesuaian Kegiatan Pemanfaatan Ruang – “KKPR”);
2. Environmental Approval (Persetujuan Lingkungan – “PL”); and
3. Building Approval (Persetujuan Bangunan Gedung – “PBG”) and Certificate of Proper Function (Sertifikat Laik Fungsi – “SLF”).

Compliance with these requirements is subject to the characteristics of the relevant business activity, its location and premises, as well as the applicable laws and regulations.

In addition to the primary Business License, where a business activity requires a Business License to Support Business Activities (Perizinan Berusaha untuk Menunjang Kegiatan Usaha – “PB UMKU”), the business actor must also obtain the relevant PB UMKU.

The basic requirements, PB, and PB UMKU are processed electronically through the OSS System, which is electronically integrated with the systems maintained by the relevant ministries and government agencies.

Types of Business Licenses Based on Risk Level

Pursuant to Article 124 paragraph (1) of GR 28/2025, the applicable Business License is determined based on the designated risk level and business scale classification of the relevant business activity.

In general, business activities are classified into four risk categories.

Low-Risk Business Activities

For low-risk business activities, the required Business License consists of a:

Business Identification Number (Nomor Induk Berusaha – “NIB”).

The NIB serves as both the identity of the business actor and the legal authorization to conduct the relevant business activity.

Medium-Low-Risk Business Activities

For medium-low-risk business activities, the required Business License consists of:

NIB and Standard Certificate (Sertifikat Standar).

The Standard Certificate constitutes the legal basis for conducting the relevant business activity based on the business actor’s declaration that it will comply with the prescribed business standards.

Medium-High-Risk Business Activities

For medium-high-risk business activities, the required Business License consists of:

NIB and Standard Certificate.

Unlike medium-low-risk business activities, the Standard Certificate for medium-high-risk activities requires verification of compliance with the applicable business activity standards by the competent authority in accordance with the prevailing laws and regulations.

High-Risk Business Activities

For high-risk business activities, the required Business License consists of:

NIB and a Business Permit (Izin).

The Business Permit constitutes an approval issued by the relevant government authority and must be obtained before the business actor may carry out the relevant business activity, in accordance with the applicable regulatory requirements.

Risk Classification of Garment Manufacturing Businesses

For garment manufacturing activities, the applicable risk level may vary depending on the scale of the business.

With reference to Appendix I.F of GR 28/2025 concerning Business Licensing in the Industrial Sector, the general classification is as follows:

Business Scale	Risk Level	Business Licensing Requirement
Micro Enterprise	Low	NIB
Small Enterprise	Low	NIB
Medium Enterprise	Medium	NIB + Standard Certificate
Large Enterprise	Medium	NIB + Standard Certificate

Accordingly, the licensing requirements applicable to a garment manufacturing business are determined not only by its KBLI classification, but also by its business scale and the risk level assigned to the relevant business activity, as stipulated under GR 28/2025 and implemented through the OSS System.

Business Licensing Facilitation for Micro and Small Enterprises

The Government provides certain licensing facilities for Micro and Small Enterprises (“MSEs”) in obtaining business legality.

The Central Government and Regional Governments, within their respective authorities, are required to provide guidance and facilitate the registration of MSEs based on the norms, standards, procedures, and criteria established by the Central Government.

Registration may be conducted electronically through the OSS System. Upon completion of the registration process and fulfillment of the applicable requirements, the MSE will be issued an NIB.

Within the framework of licensing facilitation for MSEs, the NIB may function as a single business license, subject to the applicable laws and regulations.

Conclusion

A garment manufacturing business is classified as an industrial activity because it processes raw materials, particularly textiles, leather, or similar materials, into finished garments with higher added value.

For the manufacture of garments made from textiles, the generally applicable classification is KBLI 14111 – Manufacture of Ready-Made Garments (Garment Manufacturing) from Textiles. Meanwhile, the manufacture of garments made from leather or synthetic leather falls under KBLI 14112 – Manufacture of Ready-Made Garments (Garment Manufacturing) from Leather and Imitation Leather.

Business actors are required to obtain the applicable Business License through the OSS System pursuant to GR 28/2025. The type of Business License required is determined based on the risk level and scale of the relevant business activity.

For micro and small-scale garment manufacturing businesses classified as low-risk activities, the NIB generally constitutes the principal Business License. Meanwhile, medium and large-scale garment manufacturing businesses classified as medium-risk activities are generally required to obtain an NIB and a Standard Certificate, subject to the specific risk classification determined through the OSS System.

In addition to the relevant Business License, business actors must also ensure compliance with the applicable basic requirements, particularly KKPR, Environmental Approval, PBG, and SLF, taking into account the circumstances of the relevant business activities and facilities.

Therefore, prior to establishing or operating a garment manufacturing business, a business actor should first ensure the appropriate KBLI classification, business scale, risk level, conformity of the business location with applicable spatial planning requirements, environmental compliance, building compliance, as well as the applicable Business License and any PB UMKU that may be required.

Legal Basis

1. Law No. 3 of 2014 on Industry;
2. Law No. 7 of 2014 on Trade;
3. Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation, as enacted into law pursuant to Law No. 6 of 2023;
4. Law No. 6 of 2023 on the Enactment of Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation into Law;
5. Government Regulation No. 28 of 2025 on the Implementation of Risk-Based Business Licensing; and
6. Regulation of the Central Statistics Agency No. 7 of 2025 on the Indonesian Standard Industrial Classification.

Under Indonesia’s immigration regime, foreign nationals intending to reside and/or work in Indonesia are required to hold an appropriate stay permit corresponding to the purpose of their stay. Two commonly recognized types of stay permits are the Limited Stay Permit (Izin Tinggal Terbatas – “ITAS/KITAS”) and the Permanent Stay Permit (Izin Tinggal Tetap – “ITAP/KITAP”).

In general, KITAS or ITAS is a limited stay permit granted to foreign nationals to reside in Indonesia for a specified period, whereas KITAP or ITAP is a permanent stay permit granted to certain categories of foreign nationals to reside and settle in Indonesia as residents.

1. Limited Stay Permit (ITAS/KITAS)

An ITAS may be granted to several categories of foreign nationals, including:

1. foreign nationals entering Indonesia with a Limited Stay Visa;
2. children born in Indonesia whose father and/or mother holds an ITAS;
3. foreign nationals whose Visit Stay Permit has been converted into an ITAS;
4. captains, crew members, or foreign experts working on vessels, floating facilities, or certain installations;
5. foreign nationals legally married to Indonesian citizens; and
6. children of foreign nationals legally married to Indonesian citizens.

For Foreign Workers (Tenaga Kerja Asing – “TKA”) working as experts in Indonesia, an application for an ITAS is generally submitted by the foreign national or their guarantor to the Head of the relevant Immigration Office or a designated Immigration Officer having jurisdiction over the foreign national’s place of residence.

The required documents generally include:

• a letter of guarantee issued by the guarantor;
• a valid and unexpired national passport; and
• a recommendation from the relevant government agency and/or institution, as applicable to the purpose of the foreign national’s stay.

In principle, an ITAS application must be submitted no later than 30 days from the date on which the Entry Stamp is granted. If the application is submitted after such period, the foreign national may be subject to an immigration charge in accordance with the applicable laws and regulations. This requirement does not apply to foreign nationals who have already been granted an ITAS at an Immigration Checkpoint.

Once the required documents have been verified as complete and the applicant’s photograph has been taken, the Head of the Immigration Office or the designated Immigration Officer may issue the ITAS within a maximum period of 4 business days.

2. Simplification of ITAS Issuance for Foreign Workers

To simplify the process for issuing visas and stay permits to foreign workers, the Government issued Minister of Law and Human Rights Regulation No. 22 of 2023 on Visas and Stay Permits, as amended by Minister of Law and Human Rights Regulation No. 11 of 2024.

Under these regulations, an ITAS for a prospective foreign worker may be granted in the form of an Entry Stamp issued by an Immigration Officer at an Immigration Checkpoint or at another location designated to perform immigration inspection functions upon approval of the Director General of Immigration.

An ITAS may also be issued in the form of a virtual KITAS delivered electronically, as well as in the form of a physical card printed by a designated Immigration Officer.

In general, an ITAS may be granted for a maximum period of 5 years and may be extended, provided that the total period of stay does not exceed 10 years.

For certain categories of work, an ITAS may also be granted for a maximum period of 90 days and may be extended, provided that the total period of stay in Indonesia does not exceed 180 days.

3. Permanent Stay Permit (ITAP/KITAP)

Unlike an ITAS, which is limited in duration, an ITAP is granted to certain foreign nationals to reside and settle permanently in Indonesia as residents.

An ITAP may be granted through the conversion of status from an ITAS to an ITAP, including to:

1. foreign nationals holding an ITAS as religious workers;
2. workers;
3. investors;
4. Second Home stay permit holders;
5. family members in mixed-nationality marriages;
6. the spouse and/or children of a foreign national holding an ITAP; and
7. former Indonesian citizens and former subjects of dual Indonesian citizenship.

In certain circumstances, an ITAP may also be granted directly without conversion of stay permit status, including to former subjects of dual Indonesian citizenship who elect foreign citizenship, children born in Indonesia to foreign nationals holding an ITAP, and Indonesian citizens who lose their Indonesian citizenship while residing in Indonesia.

4. Requirements for an ITAP Application

An ITAP application is submitted by the foreign national or their guarantor to the Head of the Immigration Office or a designated Immigration Officer having jurisdiction over the foreign national’s place of residence.

The required documents generally include:

• a valid and unexpired national passport;
• proof of guarantee from the guarantor or an immigration guarantee;
• a statement of integration; and
• other documents evidencing the purpose, intention, or status of the foreign national.

Once the application has been verified as complete and the applicant’s photograph has been taken, the ITAP may be issued within a maximum period of 4 business days.

An ITAP is granted for a period of 5 years and may subsequently be extended for an indefinite period, provided that the stay permit has not been revoked.

5. Can a Foreign Worker Holding a KITAS Obtain a KITAP?

In principle, yes.

A foreign national holding an ITAS as a worker, religious worker, investor, or Second Home stay permit holder may obtain an ITAP through the conversion of stay permit status, subject to compliance with the requirements prescribed under the applicable immigration laws and regulations.

One of the key requirements is that the foreign national must have continuously resided in Indonesia for at least 3 consecutive years from the date on which the ITAS was granted.

Accordingly, the applicable provisions do not require a foreign worker to have held a KITAS for 5 years before becoming eligible to apply for a KITAP. For a foreign worker falling within an eligible category and satisfying the applicable conversion requirements, the relevant requirement is continuous residence in Indonesia for at least 3 consecutive years from the date the ITAS was granted, together with compliance with the applicable administrative and immigration requirements.

The foreign national must also execute a statement of integration with the Government of the Republic of Indonesia.

6. Documents Required for Conversion from ITAS to ITAP

An application for conversion from an ITAS to an ITAP may be submitted by the foreign national, guarantor, or responsible party through the relevant application system to the Head of the Immigration Office or a designated Immigration Officer.

In principle, the supporting documents include:

1. a valid and unexpired national passport;
2. a statement of integration, except for an unmarried child under 18 years of age;
3. the foreign national’s existing ITAS;
4. proof of guarantee, where the foreign national has a guarantor;
5. the Identity Card (Kartu Tanda Penduduk – “KTP”) and/or Family Card (Kartu Keluarga – “KK”) of the guarantor or responsible party, where applicable; and
6. the ITAP of the relevant family member where the application is based on family reunification with a spouse, father, mother, or child holding an ITAP.

In addition to the above documents, the Immigration Authority may also consider the completeness and renewal of commitments relating to the underlying basis upon which the stay permit was originally granted, including:

• evidence of the company’s legal standing;
• evidence of valid employment-related licenses or approvals;
• amendments to the company’s deed;
• the latest financial statements;
• the company’s latest tax compliance documents;
• evidence of the applicant’s latest income or bank account;
• the latest shareholding information; and/or
• other documents substantiating the purpose and basis of the foreign national’s stay in Indonesia.

7. Fulfilment of Commitments as a Material Requirement for Conversion

It is important to note that an ITAS cannot be converted into an ITAP if the commitments required at the time of the previous issuance of the ITAS have not been fulfilled.

Accordingly, satisfying the 3-year residence requirement does not automatically entitle an ITAS holder to obtain an ITAP.

The applicant must continue to satisfy all substantive and administrative requirements applicable to their respective stay permit category, including demonstrating the legality of the guarantor, employment, business activity, investment, or other underlying basis for their stay in Indonesia.

8. Conclusion

Based on the applicable immigration provisions, a foreign worker holding a KITAS/ITAS as a worker may, in principle, apply for conversion to a KITAP/ITAP after having continuously resided in Indonesia for at least 3 consecutive years from the date the ITAS was granted.

Accordingly, the following conclusions may be drawn:

1. KITAS/ITAS constitutes a Limited Stay Permit, whereas KITAP/ITAP constitutes a Permanent Stay Permit.
2. An ITAS may generally be granted for a maximum period of 5 years, subject to extension in accordance with the applicable laws and regulations.
3. An ITAP is initially granted for 5 years and may thereafter be extended for an indefinite period, provided that it has not been revoked.
4. A foreign national holding an ITAS as a worker falls within the category of foreign nationals who may obtain an ITAP through conversion of stay permit status.
5. For the conversion of an ITAS into an ITAP for a foreign worker, the relevant residence requirement is continuous residence in Indonesia for at least 3 consecutive years from the date the ITAS was granted, rather than a requirement to hold a KITAS for 5 years.
6. The applicant must comply with the applicable administrative requirements, fulfil all relevant commitments, demonstrate the legality of the underlying employment or activity, and execute a statement of integration.
7. Satisfaction of the 3-year residence requirement does not result in the automatic granting of a KITAP, as the application remains subject to examination and approval by the competent Immigration Authority.

Legal Basis

1. Law No. 6 of 2011 on Immigration;
2. Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation, as enacted into law by Law No. 6 of 2023;
3. Government Regulation No. 31 of 2013 on the Implementing Regulation of Law No. 6 of 2011 on Immigration, as amended several times, most recently by Government Regulation No. 40 of 2023;
4. Minister of Law and Human Rights Regulation No. 22 of 2023 on Visas and Stay Permits; and
5. Minister of Law and Human Rights Regulation No. 11 of 2024 on the Amendment to Minister of Law and Human Rights Regulation No. 22 of 2023 on Visas and Stay Permits.

In the event of termination of employment, an employee is, in principle, entitled to certain statutory entitlements depending on the grounds for termination and the employee’s length of service. Such entitlements may include severance pay, long-service pay, and compensation pay for entitlements.

Employees’ statutory entitlements arising from termination of employment are governed by Law Number 13 of 2003 concerning Manpower, as most recently amended by Law Number 6 of 2023 concerning Job Creation (the “Manpower Law”), and are further regulated under Government Regulation Number 35 of 2021 (“GR 35/2021”).

Severance Pay Based on Length of Service

The basic amount of severance pay is determined based on the employee’s length of service, as follows:

Length of Service	Severance Pay Entitlement
Less than 1 year	1 month’s wage
1 year or more but less than 2 years	2 months’ wages
2 years or more but less than 3 years	3 months’ wages
3 years or more but less than 4 years	4 months’ wages
4 years or more but less than 5 years	5 months’ wages
5 years or more but less than 6 years	6 months’ wages
6 years or more but less than 7 years	7 months’ wages
7 years or more but less than 8 years	8 months’ wages
8 years or more	9 months’ wages

However, the above table only sets out the basic severance pay entitlement. The actual amount payable to an employee will depend on the grounds for termination, as GR 35/2021 stipulates different multipliers applicable to severance pay depending on the relevant grounds for termination.

What Wage Components Are Included in the Basis for Calculating Severance Pay?

One of the key considerations in calculating severance pay is determining which wage components should be included in the calculation basis.

Pursuant to Article 157 paragraph (1) of the Manpower Law, the wage components used as the basis for calculating severance pay and long-service pay consist of:

1. basic wage; and
2. fixed allowances provided to the employee and his or her family.

Accordingly, not all income, allowances, or benefits received by an employee are automatically included in the basis for calculating severance pay. The determination depends on the nature of the relevant payment, particularly whether it qualifies as a fixed allowance.

Where an employee is paid on a daily basis, the monthly wage is calculated as 30 times the daily wage. Where an employee is paid based on output or units of production, the monthly wage is calculated based on the average income received during the preceding 12 months.

If the resulting monthly wage is lower than the applicable minimum wage, the wage used as the basis for calculating severance pay shall be the minimum wage applicable in the region where the company is domiciled.

Fixed Allowances as Part of the Severance Pay Calculation Basis

Referring to Circular Letter of the Minister of Manpower Number SE-07/MEN/1990, a fixed allowance is, in principle, a regular payment related to employment that is provided on a fixed basis to an employee and his or her family and is paid within the same payment period as the basic wage.

Examples of payments that may be classified as fixed allowances include:

• spouse allowance;
• child allowance;
• housing allowance;
• regional allowance; and
• other allowances paid on a fixed and regular basis.

However, meal and transportation allowances are not automatically classified as fixed allowances.

Such allowances may qualify as fixed allowances if their payment is not conditional upon the employee’s attendance and they are paid regularly based on a specified period, whether daily or monthly.

Conversely, if a meal or transportation allowance is paid solely based on the employee’s actual days of attendance, it is more likely to be classified as a non-fixed allowance and, in principle, will not form part of the wage components used as the basis for calculating severance pay.

Accordingly, the substance and payment mechanism of an allowance are more determinative than the name or designation given to such allowance.

Severance Pay Entitlements Vary Depending on the Grounds for Termination

GR 35/2021 provides that an employee’s termination entitlements vary depending on the grounds for termination. Some of the key provisions are as follows:

1. Severance Pay at 1 Time the Applicable Rate

An employee may be entitled to 1 time the applicable severance pay + 1 time the applicable long-service pay + compensation pay for entitlements, including under certain circumstances involving a merger, consolidation, spin-off, or acquisition of the company, as regulated under GR 35/2021.

2. Severance Pay at 0.5 Times the Applicable Rate

An employee may be entitled to 0.5 times the applicable severance pay + 1 time the applicable long-service pay + compensation pay for entitlements, including where:

• an acquisition of the company results in changes to the terms and conditions of employment and the employee is unwilling to continue the employment relationship; or
• the company carries out an efficiency measure due to losses suffered by the company.

3. Severance Pay at 0.75 Times the Applicable Rate

Where employment is terminated due to a force majeure event that does not result in the closure of the company, the employee is entitled to 0.75 times the applicable severance pay + 1 time the applicable long-service pay + compensation pay for entitlements.

4. Severance Pay at 1.75 Times the Applicable Rate

An employee whose employment is terminated upon reaching retirement age is, in principle, entitled to 1.75 times the applicable severance pay + 1 time the applicable long-service pay + compensation pay for entitlements, subject to the applicable provisions concerning pension programs.

5. Severance Pay at 2 Times the Applicable Rate

Under certain circumstances, an employee or his or her lawful heirs may be entitled to 2 times the applicable severance pay + 1 time the applicable long-service pay + compensation pay for entitlements, including where:

• the employee passes away; or
• the employee suffers from a prolonged illness or disability resulting from an occupational accident and is unable to perform his or her work after a period exceeding 12 months.

6. Compensation Pay for Entitlements and Separation Pay

For certain grounds of termination, an employee may not be entitled to severance pay or long-service pay but may instead be entitled to compensation pay for entitlements and separation pay, provided that the separation pay is stipulated under the Employment Agreement, Company Regulation, or Collective Labour Agreement.

One example is an employee who voluntarily resigns and satisfies the applicable statutory requirements for resignation.

Conclusion

In calculating an employee’s statutory entitlements arising from termination of employment, two key elements must be distinguished.

First, the employee’s length of service determines the basic amount of severance pay. The longer the employee’s period of service, the greater the number of months’ wages used as the basis for severance pay, subject to a maximum of 9 months’ wages for employees with 8 years of service or more.

Second, the grounds for termination determine the multiplier applicable to such basic severance pay. Accordingly, employees with the same length of service and wage may not necessarily receive the same amount of severance pay if their employment is terminated on different grounds.

Furthermore, the basis for calculating severance pay and long-service pay is, in principle:

Basic Wage + Fixed Allowances

Therefore, where an employee receives a housing allowance, spouse allowance, meal allowance, transportation allowance, or other allowances on a fixed and regular basis and such payments are not conditional upon attendance or the achievement of certain targets, the relevant allowances should be assessed to determine whether they qualify as wage components to be included in the severance pay calculation basis.

Conversely, payments that are non-fixed, dependent upon attendance, or provided only upon the occurrence of certain conditions will, in principle, not automatically form part of the wage components used as the basis for calculating severance pay.

Accordingly, in practice, the calculation of termination entitlements cannot be determined solely by reference to an employee’s monthly salary. It is also necessary to examine the employee’s wage structure, the nature of each allowance, length of service, grounds for termination, and the applicable provisions of the Employment Agreement, Company Regulation, or Collective Labour Agreement.

Legal Basis

1. Law Number 13 of 2003 concerning Manpower, as most recently amended by Law Number 6 of 2023 concerning the Stipulation of Government Regulation in Lieu of Law Number 2 of 2022 concerning Job Creation into Law;
2. Law Number 6 of 2023 concerning Job Creation;
3. Government Regulation Number 35 of 2021 concerning Fixed-Term Employment Agreements, Outsourcing, Working Hours and Rest Periods, and Termination of Employment; and
4. Circular Letter of the Minister of Manpower Number SE-07/MEN/1990 concerning the Classification of Wage Components and Non-Wage Income.
5. Hukum Online

A foundation (yayasan) is a form of legal entity recognized under Indonesian law and is generally established to carry out activities in the social, religious, and humanitarian sectors. Unlike a limited liability company, a foundation has no members and is not primarily established for the purpose of distributing profits to its founders or governing bodies.

How, then, is a foundation legally characterized under Indonesian law, and what procedures must be followed to establish one?

Definition of a Foundation

Prior to the enactment of legislation specifically governing foundations, foundations had long been recognized in Indonesian civil law practice. Article 1653 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata or Burgerlijk Wetboek voor Indonesie) (“Civil Code”) essentially recognizes the existence of associations or organizations that are granted legal entity status.

Foundations are now specifically regulated under Law No. 16 of 2001 on Foundations, as amended by Law No. 28 of 2004 (“Foundation Law”), together with its implementing regulations.

Pursuant to Article 1 point 1 of the Foundation Law, a foundation is a legal entity consisting of separated assets designated for the achievement of specific purposes in the social, religious, and humanitarian sectors, and which has no members.

Although a foundation has no members, it has three principal governing bodies:

Foundation Body	Principal Function
Board of Trustees (Pembina)	Exercises powers that are not delegated to the Management Board or Supervisory Board, including the authority to appoint and dismiss members of the Management Board and Supervisory Board.
Management Board (Pengurus)	Responsible for the management and administration of the foundation, including managing its activities and assets and preparing annual reports.
Supervisory Board (Pengawas)	Supervises and provides advice to the Management Board in carrying out the foundation’s activities.

Accordingly, the governance of a foundation is structured through a division of functions among the body responsible for determining major policies, the body responsible for day-to-day management, and the body responsible for supervision.

May a Foundation Conduct Business Activities?

Although a foundation is principally established for social, religious, and humanitarian purposes, Article 3 paragraph (1) of the Foundation Law permits a foundation to conduct business activities in support of the achievement of its purposes and objectives.

Such business activities may be conducted by:

1. establishing a business entity; and/or
2. participating or holding an interest in a business entity.

However, conducting such business activities does not alter the non-profit nature of a foundation. Proceeds derived from the foundation’s business activities may not be distributed to members of the Board of Trustees, Management Board, or Supervisory Board.

Furthermore, the activities of any business entity established by or participated in by the foundation must be consistent with the foundation’s purposes and objectives and must not contravene public order, morality, or applicable laws and regulations.

Such business activities may cover various sectors, including education, healthcare, environmental protection, science, arts, sports, consumer protection, and human rights.

Requirements for a Foundation’s Name

Certain statutory requirements must be observed when determining the name of a foundation. A foundation may not use a name that:

1. has already been lawfully used by another foundation; or
2. is contrary to public order and/or morality.

In addition, the name of the legal entity must be preceded by the word “Yayasan” (Foundation).

What Are the Procedures for Establishing a Foundation?

In general, the establishment of a foundation involves three principal stages, namely establishment, legalization, and publication.

1. Establishment of the Foundation

A foundation may be established by one or more persons, whether individuals or legal entities, by separating a portion of the founder’s assets as the foundation’s initial assets.

The establishment of a foundation must be documented in a notarial deed drawn up in the Indonesian language. The deed of establishment must contain the foundation’s articles of association and other necessary information.

The articles of association must, at a minimum, contain:

1. the name and domicile of the foundation;
2. its purposes, objectives, and activities undertaken to achieve such purposes and objectives;
3. the duration of the foundation;
4. the amount of initial assets separated from the founder’s personal assets, whether in the form of money or other property;
5. the procedures for acquiring and utilizing the foundation’s assets;
6. the procedures for the appointment, dismissal, and replacement of members of the Board of Trustees, Management Board, and Supervisory Board;
7. the rights and obligations of members of the Board of Trustees, Management Board, and Supervisory Board;
8. the procedures for convening meetings of the foundation’s governing bodies;
9. provisions concerning amendments to the articles of association;
10. provisions concerning the merger and dissolution of the foundation; and
11. provisions concerning the utilization of remaining assets following liquidation or the distribution of the foundation’s assets following dissolution.

In addition to the articles of association, the deed of establishment must contain information concerning the identities of the founder and the foundation’s governing bodies, including their names, addresses, occupations, places and dates of birth, and nationalities.

Establishment of a Foundation by Testamentary Disposition

In addition to being established directly by a founder, a foundation may also be established pursuant to a will or testament.

In such circumstances, the beneficiary or executor of the will acts to implement the testator’s intentions. The establishment must be based on an open will executed before a notary in accordance with the provisions of the Civil Code.

The establishment of a foundation pursuant to a will may be carried out by:

1. expressly providing for the establishment of the foundation and its articles of association in the relevant will; or
2. instructing the executor of the will to establish the foundation in accordance with the applicable laws and regulations.

What Is the Minimum Initial Asset Requirement?

The minimum amount of initial assets required for a foundation depends on the nationality or status of its founder.

For a foundation established by Indonesian persons, the initial assets separated from the founder’s personal assets must have a minimum value of:

IDR 10,000,000 (ten million Indonesian Rupiah).

Where the separated assets are not denominated in Indonesian Rupiah, the value of such assets must be at least equivalent to the amount stated above.

Meanwhile, a foundation established by foreign persons or jointly by foreign and Indonesian persons is subject, among others, to the provisions of Government Regulation No. 63 of 2008 on the Implementation of the Foundation Law, as amended by Government Regulation No. 2 of 2013.

For such foundations, the initial assets separated from the founder’s personal assets must have a minimum value of:

IDR 100,000,000 (one hundred million Indonesian Rupiah).

Where such assets are not in the form of Indonesian Rupiah, their value must be at least equivalent to IDR 100 million.

2. Legalization as a Legal Entity

The execution of a deed of establishment before a notary does not, in itself, confer legal entity status upon a foundation.

A foundation acquires legal entity status only after its deed of establishment has obtained approval from the Minister of Law.

An application for legalization must be submitted by the founder or its authorized representative to the Minister of Law through the notary who executed the deed of establishment. The notary must submit the application no later than 10 days from the date on which the deed of establishment is executed.

In principle, a decision to approve or reject the application must be issued no later than 30 days from the date on which the complete application is received.

If the application is rejected, the Minister of Law must notify the applicant in writing and provide the reasons for such rejection. An application may be rejected if it does not comply with the Foundation Law or its implementing regulations.

It is important to note that any legal acts undertaken by the Management Board on behalf of the foundation before the foundation acquires legal entity status shall be the joint and several responsibility of the members of the Management Board.

Accordingly, obtaining legal entity status is an important prerequisite before a foundation undertakes legal acts in its own name.

3. Publication of the Foundation

Once the deed of establishment has been approved and the foundation has acquired legal entity status, its deed of establishment must be published in the Supplement to the State Gazette of the Republic of Indonesia (Tambahan Berita Negara Republik Indonesia).

Such publication is carried out by the Minister no later than 14 days from the date on which the deed of establishment is approved by the Minister of Law. Publication is subject to fees as prescribed under the applicable laws and regulations.

Accordingly, the process for establishing a foundation may generally be summarized as follows:

Execution of the Notarial Deed of Establishment → Legalization as a Legal Entity by the Minister of Law → Publication in the Supplement to the State Gazette of the Republic of Indonesia.

Conclusion

A foundation is a legal entity established through the separation of assets for specific purposes in the social, religious, and humanitarian sectors and has no members. Its governance structure consists of three bodies, namely the Board of Trustees (Pembina), Management Board (Pengurus), and Supervisory Board (Pengawas).

Although a foundation is inherently non-profit in nature, it may support the achievement of its purposes and objectives by establishing or participating in a business entity. However, proceeds derived from such business activities may not be distributed to members of the Board of Trustees, Management Board, or Supervisory Board.

To establish a foundation, the founder must execute a deed of establishment before a notary in the Indonesian language, provide the required initial assets, obtain legalization from the Minister of Law, and subsequently have the establishment published in the Supplement to the State Gazette of the Republic of Indonesia.

With respect to the minimum initial assets, a foundation established by Indonesian persons must have initial assets of at least IDR 10 million, whereas a foundation established by foreign persons or jointly by foreign and Indonesian persons must have initial assets of at least IDR 100 million.

Legal Basis

1. Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata/Burgerlijk Wetboek voor Indonesie);
2. Law No. 16 of 2001 on Foundations;
3. Law No. 28 of 2004 on the Amendment to Law No. 16 of 2001 on Foundations;
4. Government Regulation No. 63 of 2008 on the Implementation of the Law on Foundations;
5. Government Regulation No. 2 of 2013 on the Amendment to Government Regulation No. 63 of 2008 on the Implementation of the Law on Foundations; and
6. Regulation of the Minister of Law and Human Rights No. M.HH-02.OT.01.01 of 2011 on the Adjustment of the Use of the Name of the Ministry of Law and Human Rights of the Republic of Indonesia.

The digitalization of documents has led to the increasing use of electronic stamps (e-stamps) and electronic signatures (e-signatures) in various transactions, including electronic agreements. Although both are frequently used in the same document, e-stamps and e-signatures serve different functions and are subject to different legal requirements.

Understanding Electronic Stamp Duty (E-Stamp)

Under Law Number 10 of 2020 on Stamp Duty, a stamp is a label or strip in adhesive, electronic, or other form that contains certain characteristics and security features, is issued by the Government, and is used for the payment of tax on documents.

An electronic stamp (e-stamp) is a stamp in the form of a label that is affixed to an electronic document through a designated electronic system.

Unlike a physical adhesive stamp, an e-stamp contains a unique code and specific information as security features. The unique code includes, among other things, a serial number consisting of at least 22 alphanumeric characters. An e-stamp also contains:

1. an image of the national emblem, Garuda Pancasila;
2. the words “METERAI ELEKTRONIK” (Electronic Stamp); and
3. figures and wording indicating the applicable stamp duty tariff.

An e-stamp is affixed through the Electronic Stamp System, which comprises a series of electronic devices and procedures within an integrated system or application used to create, distribute, and affix electronic stamps.

Pursuant to Minister of Finance Regulation Number 78 of 2024 on the Implementing Provisions for Stamp Duty, Perum Peruri is responsible for implementing the contract for the production and distribution of electronic stamps, including ensuring their availability.

Accordingly, an e-stamp is deemed valid where it is affixed through the Electronic Stamp System in accordance with the applicable laws and regulations.

Documents Subject to Stamp Duty

In principle, Stamp Duty is imposed on documents made to evidence events of a civil nature and documents used as evidence in court proceedings.

Documents subject to Stamp Duty include:

1. agreements, certificates, statements, and other similar documents, including their counterparts;
2. notarial deeds, including their executorial copies (grosse), copies, and excerpts;
3. deeds executed by Land Deed Officials (Pejabat Pembuat Akta Tanah or “PPAT”), including their copies and excerpts;
4. securities, regardless of their name or form;
5. securities transaction documents, including futures contract transaction documents, regardless of their name or form;
6. auction documents;
7. documents stating a monetary amount with a nominal value exceeding IDR 5 million, insofar as they acknowledge the receipt of money or contain an acknowledgment that a debt has been fully or partially settled or accounted for; and
8. other documents as stipulated under applicable laws and regulations.

Stamp Duty may also apply to documents used as evidence in court proceedings, including documents for which Stamp Duty has not previously been paid or documents that were not previously subject to Stamp Duty in accordance with the applicable regulations.

Electronic Signatures (E-Signatures)

Unlike an e-stamp, an electronic signature (e-signature) is a signature consisting of electronic information that is attached to, associated with, or linked to other electronic information and is used as a means of verification and authentication.

The primary function of an electronic signature is to authenticate and verify:

1. the identity of the signatory; and
2. the integrity and authenticity of the electronic information.

For an electronic signature to have valid legal force and effect, it must satisfy certain requirements, including that the electronic signature creation data is linked to and remains under the control of the signatory, that any subsequent alteration to the signature or the related electronic information can be detected, that the identity of the signatory can be verified, and that there is a mechanism demonstrating the signatory’s consent to the relevant electronic information.

In general, electronic signatures are classified into:

1. Certified Electronic Signatures

A certified electronic signature must satisfy the validity requirements prescribed by applicable laws and regulations, use an electronic certificate issued by an Indonesian Electronic Certification Provider (Penyelenggara Sertifikasi Elektronik or “PSrE”), and be created using a certified electronic signature creation device.

2. Uncertified Electronic Signatures

An uncertified electronic signature is an electronic signature created without using the services of an Indonesian PSrE. Although it is not certified, its validity must nevertheless be assessed against the legal requirements applicable to electronic signatures under the prevailing laws and regulations.

Must an E-Stamp Always Be Used Together with an E-Signature?

In principle, there is no provision that expressly requires an e-stamp to always be used together with an e-signature.

This is because the two serve different legal functions.

An e-stamp constitutes an instrument for the payment of Stamp Duty on a document, whereas an e-signature serves as a means of authenticating and verifying the identity of the signatory and the integrity of an electronic document.

Accordingly, the presence of an e-stamp does not replace the function of an electronic signature. Conversely, the presence of an electronic signature does not, in itself, satisfy the Stamp Duty obligation where the relevant document is subject to Stamp Duty.

Use of E-Stamps in Electronic Agreements

With respect to agreements and their counterparts, pursuant to Article 8 paragraph (1) letter a point 1 of the Stamp Duty Law, Stamp Duty becomes payable when the document is signed.

This means that once an agreement has been finalized and signed by the parties, the Stamp Duty obligation arises at that time.

Where an agreement is executed in electronic form, an e-signature and an e-stamp may, in practice, be applied to the same document in accordance with their respective functions, provided that the applicable legal validity requirements are satisfied.

Importantly, however, a stamp is not, in principle, a requirement for the validity of an agreement. Stamp Duty constitutes a tax obligation imposed on certain documents. Therefore, the absence of a stamp does not automatically render an agreement invalid, provided that the legal requirements for a valid agreement under Indonesian civil law have otherwise been satisfied.

Where Stamp Duty payable on a document has not been duly settled, particularly where the document is subsequently intended to be used as evidence in court proceedings, the outstanding Stamp Duty may be settled through the subsequent stamping (pemeteraian kemudian) mechanism in accordance with the applicable laws and regulations.

Conclusion

E-stamps and e-signatures are two distinct legal instruments, notwithstanding that both are used within the framework of electronic documents.

An e-stamp serves as evidence of the payment of Stamp Duty on a document, whereas an e-signature serves as a means of authenticating and verifying the identity of the signatory and the integrity of an electronic document.

There is no provision requiring the two to always be affixed simultaneously. However, in the case of an electronic agreement that constitutes an object of Stamp Duty, the Stamp Duty obligation arises when the document is signed.

Accordingly, the use of e-stamps and e-signatures should be determined by reference to the type of document, the point in time at which Stamp Duty becomes payable, and the legal validity requirements applicable to electronic signatures under the prevailing laws and regulations.

It should also be emphasized that the presence of a stamp does not determine the validity of an agreement. Stamp Duty relates to a tax obligation imposed on a document, whereas the validity of an agreement is determined by whether the applicable legal requirements for a valid agreement have been satisfied.

References

1. Law Number 11 of 2008 on Electronic Information and Transactions;
2. Law Number 19 of 2016 on the Amendment to Law Number 11 of 2008 on Electronic Information and Transactions;
3. Law Number 10 of 2020 on Stamp Duty;
4. Law Number 1 of 2024 on the Second Amendment to Law Number 11 of 2008 on Electronic Information and Transactions;
5. Government Regulation Number 86 of 2021 on the Procurement, Management, and Sale of Stamps;
6. Minister of Communication and Informatics Regulation Number 11 of 2022 on the Governance of Electronic Certification; and
7. Minister of Finance Regulation Number 78 of 2024 on the Implementing Provisions for Stamp Duty;
8. Hukum Online

Another issue that frequently arises is uncertainty regarding the boundaries of a land parcel.

In such disputes, the issue is not limited to determining which party has a valid legal basis for its rights, but also whether the land claimed by one party actually encompasses or overlaps with the land possessed by another party.

As part of the initial land registration process, various activities are conducted, including the collection and processing of physical data, verification of rights, registration of rights, issuance of certificates, and recording of physical and juridical data.

Accordingly, in a land boundary dispute, relevant evidence may include survey documents, measurement drawings, cadastral maps, land books, historical records of possession, sale and purchase documents, boundary markers, measurements conducted by the Land Office, and statements from owners of adjoining land parcels.

Witness testimony may also be relied upon to explain the historical possession or boundaries of the land. However, such testimony should ideally not stand alone and should be assessed in conjunction with other supporting evidence.

This evidentiary principle is important because the court will assess the probative value of each item of evidence and its consistency with the other evidence before determining which party has the stronger legal basis for its claim.

What If the Dispute Has Already Been Brought Before the Court?

If the dispute has been examined by the District Court and subsequently decided on appeal by the High Court, a party that remains dissatisfied with the decision may, in principle, consider filing an appeal on points of law (cassation) with the Supreme Court, subject to the applicable procedural requirements.

Proceedings at the cassation stage are principally concerned with the application of law, or judex juris, rather than a complete re-examination of factual matters as conducted by the court of first instance.

Accordingly, a petition for cassation may be based, among other grounds, on an incorrect application of law by the lower courts, a violation of applicable law, or other matters constituting valid grounds for cassation under the prevailing laws and regulations.

For example, an issue may arise where the lower court’s judgment fails to provide adequate consideration of relevant evidence, incorrectly applies the applicable legal provisions, or contains issues in its assessment of evidence that ultimately result in an erroneous application of law.

At the cassation stage, the parties are generally not afforded an opportunity to introduce and have new evidence examined in the same manner as during the fact-finding proceedings before the court of first instance. Therefore, the formulation of legal arguments in the memorandum of cassation is particularly important.

If, after the judgment has obtained permanent legal force (inkracht van gewijsde), certain circumstances or evidence are discovered that satisfy the statutory requirements for a Judicial Review (Peninjauan Kembali or “PK”), such extraordinary legal remedy may be considered in accordance with the applicable laws and regulations.

Conclusion

In land disputes where documentary evidence of ownership is incomplete, the strength of each party’s legal position largely depends on the chain of evidence establishing the origin of the rights, transfer of rights, physical possession, and the identity and boundaries of the relevant land parcel.

An AJB executed before a PPAT constitutes important evidence of a sale and purchase transaction and serves as the basis for registering the transfer of land rights. A land certificate, meanwhile, constitutes formal evidence of rights and carries strong evidentiary value in respect of the physical and juridical data contained therein.

Where a claim is based on inheritance, the legal basis and history of the transfer of rights by inheritance must also be examined. In a land boundary dispute, land registration records and official measurement data are particularly important in determining whether the parcels claimed by the respective parties actually overlap.

Where a case has reached the cassation stage, the focus of the legal arguments shifts from factual determination to the correctness of the application of law by the lower courts. Accordingly, the judgments, judicial considerations, and evidence previously submitted before the lower courts should be comprehensively analyzed in order to determine the most appropriate grounds for cassation.

Legal Basis

1. Law Number 5 of 1960 concerning Basic Regulations on Agrarian Principles (Basic Agrarian Law/UUPA);
2. Law Number 14 of 1985 concerning the Supreme Court, as lastly amended by Law Number 3 of 2009;
3. Law Number 48 of 2009 concerning Judicial Power;
4. Government Regulation Number 24 of 1997 concerning Land Registration;
5. Regulation of the State Minister of Agrarian Affairs/Head of the National Land Agency Number 3 of 1997 concerning Implementing Provisions of Government Regulation Number 24 of 1997, as amended several times, most recently by Regulation of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency Number 16 of 2021; and
6. Applicable Indonesian civil procedural laws and regulations concerning evidence and legal remedies.
7. Hukum Online