Rajah & Tann Regional Round-Up
your snapshot of key legal developments in Asia
Issue 3 - Jul/Aug/Sep 2021

Leveling the Playing Field, the Government Cuts Income Tax Rate on Bonds for Local Investors

When the Omnibus Law was enacted, tax rate on interests received by foreign investors from bonds was reduced to 10%. Local investors now enjoy this same reduced tax rate under Government Regulation No. 91 of 2021.

The reduced tax rate applies on any income received or gained by local investors in the form of interest, ujrah or fee, profit sharing, margin, and any other similar income from bonds issued by government or private institutions. The regulation introduces three possible income tax bases to calculate the 10% tax rate and allows an investor to set-off discount or loss on the securities against the interest income.

Lastly, the regulation widens the parties that can withhold tax to include pension funds or mutual funds acting as brokers and/or buyers, and custodians or sub-registries that records the transfer of ownership. 

For more information, click here to read our Legal Update.

OJK Reaffirms Relaxation to Listing Requirements

As Indonesia continues to paddle through the pandemic, the Financial Services Authority ("OJK") issued Circular Letter No. 20/SEOJK.04/2021 ("Circular Letter") to reaffirm and introduce relaxations to listing requirements aimed to safeguard the performance and stability of the capital market. 

Some of the relaxations introduced under the Circular Letter are as follows:

  1. Financial statements for listing purposes, including for initial public offerings (IPOs), rights issue, and material transaction, are now valid for eight months instead of six months;
  2. The book building period in a public offering is extended to 42 business days from 21 business days;
  3. Issuers that have obtained an effective statement from OJK can postpone or cancel their offering with OJK’s approval;
  4. A public company that satisfies the conditions under the Circular Letter can increase their capital without pre-emptive rights; and
  5. Certain reports, including on the ownership and result of acquisition, can be submitted online.

For more information, click here to read our Legal Update.

KPPU Introduces Guidelines on Administrative Fines

Under KPPU Regulation No. 2 of 2021, the Indonesia Competition Commission ("KPPU") details the calculation and payment mechanism for administrative fines imposed under KPPU decisions. The administrative fine itself is capped at either 50% of the company's net profit or 10% of its turnover. Either percentage will be calculated from the relevant market during the violation period. 

This KPPU regulation also requires a party appealing against a KPPU decision to submit a bank guarantee. The bank guarantee will be liquidated if the Commercial Court, the court responsible to hear appeals of competition cases, upholds the KPPU decision. 

Lastly, this regulation allows a party to pay fines for violation of the competition law by way of a maximum of 36-month instalments. 

For more information, click here to read our Legal Update.

Please note that whilst the information in this Update is correct to the best of our knowledge and belief at the time of writing, it is only intended to provide a general guide to the subject matter and should not be treated as a substitute for specific professional advice.


Assegaf Hamzah & Partners
Jakarta Office
Level 36 & 37, Capital Place
Jalan Jenderal Gatot Subroto Kav 18
Jakarta 12710, Indonesia

Surabaya Office
Pakuwon Center, Superblok Tunjungan City
Lantai 11, Unit 08
Jalan Embong Malang No. 1, 3, 5,
Surabaya 60261, Indonesia


Bono Daru Adji
Managing Partner
D +62 21 2555 7800
F +62 21 2555 7899

Ahmad Fikri Assegaf
Senior Partner/Co-Founder
D +62 21 2555 7800
F +62 21 2555 7899

Chandra M Hamzah
D +62 21 2555 7800
F +62 21 2555 7899

Eri Hertiawan
D +62 21 2555 7800
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Ibrahim Sjarief Assegaf
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Rajah & Tann Singapore LLP


Hamidul Haq
D +65 62320398

Cheng Yoke Ping
D +65 62320265

Rajah & Tann Asia is a network of legal practices based in Asia.

Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client.

This update is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept, and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this update.