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Regulatory Environment in Indonesia

Indonesia is a presidential representative democratic republic and since 1998 has experienced a stable and democratic political environment. The separation of executive, legislative and judicial power is provided under the 1945 Constitution.

  • Executive – Since 2004 the president and vice-president are selected by universal suffrage for a maximum of two five-year terms. The president is the head of state, commander-in-chief of Indonesian armed forces and is responsible for domestic governance and policy-making and foreign affairs. The president appoints a Cabinet, which consists of 34 ministers and sets the policy direction of Indonesia. Cabinet members do not have to be elected members of the legislature.

  • Legislative – The People's Consultative Assembly is the legislative branch in Indonesia, which has taken the form of a bicameral parliament since 2004. The upper house is the Regional Representatives Council, whereas the lower house is known as the People’s Representative Council with 550 members. All legislators serve five-year terms. 

  • Judicial – Comprised of the District Courts and High Courts of Appeal for each province, as well as the Supreme Court, which is the highest court in the country whose judges are appointed by the president.

The main legislative frameworks of interest to Hong Kong businesses setting up in Indonesia are included in the following sections.


A Practical Guide to Doing Business in Indonesia

  1. Regulatory Environment
  2. Establishing a Presence
  3. Intellectual Property Protection
  4. Staff Recruitment
  5. Tax Considerations
  6. Import/Export Procedures
  7. Further Information

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