Hadromi & Partners is a law firm of general practice, created in 1999 during the Indonesian financial crisis. We discuss Indonesia's evolving legal landscape and guidance for expatriates living and working in Indonesia with the managing partner of the company, Mr. Iqbal Hadromi.
What is the size of your firm?
We are a general business law practice, but with a lot of experience on foreign direct investment, the establishment of companies, the right to labor , litigation, property, immigration, taxation, as well as issues of family intermarriage.
Whether you are interested in the study and practice of law?
When I was young, I always had a deep interest in the law and that's why I studied law at the University. After obtaining and worked several years in a firm of leading Indonesian law, opportunities in legal affairs flourished in Indonesia around 1998. It was then I decided to create my own law firm. With dedication, consistent hard work and focus point, the company was able to grow into one of the offices of leading lawyers in Indonesia.
Have you ever worked on high-profile cases that you can share with us?
For corporate work, we acted as legal advisor for financing project involving a multinational company and its subsidiaries worldwide with a transaction value of almost $ 1 billion $. For disputes work, we are currently acting on behalf of a PMA company in the oil and gas sector against one of the largest banks owned by the state of Indonesia in a civil action valuing almost 20 US $ million.
What is it like to be a lawyer in a country with a legal landscape changing? It must be good for business!
The legal landscape is constantly changing is sometimes difficult, but also challenging and exciting for us lawyers. It also presents opportunities for us to help our customers deal with their legal problems.
Is it true that in March 2016, there will be a new law that requires foreigners seeking a KITAP pay [refundable] deposit of 500 million rupees?
As you know, Indonesian law changes frequently, so at this point, there is no certainty on such a new law in the future.
When setting up a new company in Indonesia, which is often the biggest obstacle that customers face?
One of the biggest challenges faced bureaucratic system of government, which can take a long time when processing authorizations and licenses. Recently, however, we see positive improvements in the system, and we hope that these improvements will continue.
Many foreigners would agree that the president says one thing by asking them to invest in the country, while the legal issues involved go far too difficult to do, so many parts interested look elsewhere. Wherever the problem is you think and what can be done to reassure investors interested to invest in Indonesia?
The Chairman, we believe, truly has good intentions and established a good vision and reform programs, however, their implementation by existing government employees is a challenge and would need time to be realized. However, we have seen positive developments since the new installment of the new president and the cabinet. We believe that the best way to reassure investors concerned would continue to make progress and improve government policy and its implementation.
You also work with expatriates work permits. Do you know what caused such a tightening of the regulatory work of expatriates in 2015?
Yes, we often help expatriates on work and stay permit issues. The tightening of expatriates is basically the Main Department of the policy to give more opportunities for people to use. The tightening is also due to cases where some expatriates have abused their work visas.
you advise expatriates married to Indonesian men / women to get a pre-nuptial agreement, and if so, why?
We advise expatriates intending to marry Indonesians to set up a pre-nuptial agreement before marriage. One important reason is that the Indonesian marriage law stipulates the common ownership of property in all marriages registered in Indonesia, while Indonesian land law stipulates that foreigners are not allowed to own property in Indonesia. Therefore, if an Indonesian marries a foreigner, he / she will not be able to legally property in Indonesia. The pre-nuptial agreement will then provide a legal basis for the separation of ownership in a mixed marriage and therefore maintains the rights of Indonesian joint ownership in Indonesia.
have changed the current tax laws for expatriates? What is the average percentage at the time
The tax laws for expatriates have not changed, and the applicable tax rates are :?
| taxable income | Rupiah rate |
| Rp .1-50 million | 5 percent |
| Rp.50-250 million | 15 percent |
| Rp.250 -500,000,000 | 25 percent |
| on Rp.500 million | 30 percent |
What advice would you give to foreign companies wishing to set up in Indonesia?
The Indonesian legal system is complex. Especially with foreign investments, Indonesian laws and regulations differ from one industry to another. It is strongly recommended that foreign companies seek good advice and legal assistance to set up their businesses in Indonesia. The treatment of various governmental approvals and licenses must be done properly and correctly, so as not to create future problems.
The revision of Permenakertrans No. 16 in 2015 published by the Indonesian Ministry of Manpower dated October 23, 2015 states the following changes: foreign visitors who will visit Indonesia should not treat RPTKA and IMTA and no longer the 1:10 abroad compared to local employees. Is it correct?
Please be informed that fundamentally these permits are still required for foreign employees working and stay in Indonesia. In this case, the new Regulation of the Minister of Manpower Number 35 Year 2015 ( "New Regulation") regarding the modification of the Ministry of Labour Number regulation: 16 Year 2015 concerning the procedure on the use of foreign employees, eliminated the following structures and positions that have been forced to ask RPTKA and IMTA previously:
- Provide guidance, advice and training for the implementation of industrial innovation and technology to improve quality and product design, and marketing of industrial cooperation overseas to Indonesia
- Prelecting (speaker)
- Attend a meeting with the director or representative office in Indonesia
- Conducting audits, quality control and Indonesian branches of inspections (for a period of less than one month)
- other jobs that are completed in a period of time
- foreign employee in vocational training
- foreign directors and / or commissioners who are domiciled abroad
by such new regulations, temporary RPTKA and IMTA are only required for the following temporary work:
- make commercial films with a license from the authorized institution
- Conducting audits, quality control and inspections of Indonesian branches (for a period of over a month)
- related work machinery and electric power facilities, service and selling of the products on test markets
regarding the 1:10 ratio of foreign employees to local employees, we confirm that this provision was removed by the new regulation.
Is there a particular aspect of working in law that excites you the most?
From the beginning, we were very involved in issues related to foreign direct investment in Indonesia and have helped many foreign customers about it. In recent years, there have been many changes on the regulations on foreign direct investment, and we continue to be passionate about it and helping foreign clients on these issues.
Thank you, Bapak Iqbal. To contact, please email: iqbal@hadromi.com or visit www.hadromi.com