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Most people think of marriage as the ultimate emotional and spiritual bond. They are looking forward to a life of happiness. However when faced with negotiating a premarital agreement, they realize that not only do they have to decide what will happen to them if they divorce or when die, but that they also have to negotiate these issues with their fiancée. It’s not the types of subjects that an about to be married couple likes to think about prior to getting married.

Persons in Need of a Prenup

Consider a prenuptial agreement if you have at least one of the following situations:

  1. You are an Indonesian citizen planning to marry to a foreigner;
  2. You plan to purchase land or a home in Indonesia during your marriage;
  3. You are on a fast career track and are likely to earn a hefty salary in the future;
  4. You own your own business or are a partner in a company;
  5. You are the person who will bring a lot of assets to the partnership, including a retirement account;
  6. Anyone who is paying for his or her spouse to get an advanced degree which is likely to result in significant future earnings;
  7. You have children from a prior marriage.

Legal Grounds for Prenuptial Agreement

The prenuptial agreement in Indonesia is honored and can be upheld in court. The laws governing prenuptial agreements (prenup) stipulate that the agreement should be made prior to marriage. The legal grounds for the prenup come from severalapplicable Indonesian laws, including: Civil Code, 1974 Marriage Law, and Compilation of Islamic Law, as follows:

  1. Article 47 (1) of Compilation of Islamic Law Article stipulates similar provision with the Marriage Law: “At the time of or before the marriage took place, the bride and groom may enter into an agreement approved by the Registrar of Marriage regarding the management of community property.”
  2. The 1974 Marriage Law in Article 29(1) stipulates that: “At the time of or before the marriage took place, with the mutual consent of both parties, they may enter into an agreement approved by the Civil Registrar of marriage, after which it shall also apply to third parties as long as it involves them as well.” Another provision stipulated in the marriage law is that the agreement cannot be amended during marriage, except upon approval of both parties and cannot cause disadvantage to any third party. This stipulation comes from Article 29(4) in the Marriage Law.
  3. Article 199 of the Civil Code stipulates that: “From the commencing of a marriage, there shall exist by law, community property between the spouses to the extent that no other stipulations have been made in the prenuptial agreement…”

Making a Prenup

Indonesian law does not provide a ready-made framework for a prenuptial agreement. You and your lawyer have leeway to define your future legal relationship, although you are bound by law, religion, morals, and public order considerations in drafting the agreement.

An Indonesian prenuptial agreement must be tailored to the particular needs of the husband and wife and be sufficiently flexible to take into account changes in your future circumstances during the course of the marriage. Both parties are free to determine the form of agreement, as long as it abides by religious and civil laws. The provisions are indeed very abstract. The legislature seems to leave it that way in order to make it flexible within the influences of religion, moral, and public order.

Begin by collecting all the subjects and items you want to be included in the prenuptial agreement. Ask your lawyer to draft the agreement and request his/her recommendations. Make note that the property purchased in Indonesia will be under your Indonesian spouse’s name. This is necessary because foreigners are not allowed to own property in Indonesia. For mixed couples what is needed is a prenup which instigates separation of property as the rule so that an Indonesian spouse can legally own and hold property under Hak Milik (Freehold Title) on property purchased. This negates the foreign spouse being an automatic owner of 50% of the property due to the usual joint property rule for married couples in Indonesia. This is one of the most important points of the pre-nuptial agreement and is a requirement for a mixed couple to purchase land/property in Indonesia.

You need to specify the percentage of the combined wealth that each spouse will receive if the marriage was dissolved. Included in the agreement should be full disclosure of all assets and liabilities, including the value of each asset. Ensure that the terms oftheagreement do not promote dissolution of assets.

Keep a copy of all drafts of the documents so that there is a record that you have reviewed every draft. Keep all the drafts, correspondence, and notes so that the file reflects the negotiations and the various resulting revisions. Name and number the drafts in consecutive order such as “draft number three”. This record will be very helpful if the agreement is later contested. After negotiating the agreement, make sure you understand its terms and the importance of abiding by them. An agreement approved by both parties in its entirety is more likely to stand the test of time.

Avoid commingling assets and keep careful records. A qualified accountant or bookkeeper can assist you with this task. Even if the agreement is set aside or revoked, careful bookkeeping will make it easier for the court to trace assets and will save you lots of money.

At Wijaya & Co, we provide client with a pre-nuptial agreement questionnaire. The main purpose of this questionnaire is to gather facts and obtain client’s input on issues that should be incorporated into a prenuptial agreement. The questionnaire consists of the issues that should be considered when you enter into a prenuptial agreement. It can be difficult to discuss every issue that listed on the questionnaire. When you are ready with the answers, the couple may sit down together to discuss every one of the questions, even if they are difficult to resolve.

Legal Constraints for Mixed-Couples

If you are foreigner and plan to marry an Indonesian, you need to get a prenuptial agreement. Considering that foreigners are not allowed to legally own property in Indonesia, and if you wish to take the quite sensible precaution of a prenuptial agreement for the purpose of protecting yourself and your properties in the event that one of you dies, a prenuptial agreement is a must-have choice. The Indonesian government can, by law, take virtually every purchased property away from the grieving party if they did not create such a protective document PRIOR to marriage.

The legal constraints came from the Basic Property Law enacted in 1960 imposed that Indonesian married to the foreigner will be precluded to own a property in Indonesia. This is because the Marriage Law imposed joint property regime as imposed in Article 35: “Property acquired during the course of a marriage become community property.” As for the community property, the Marriage Law imposed further in Article 36 (1): “In regards to the Community Property, Husband or Wife may act on the consent of both parties.” Islamic Compilation Law, which is enacted specifically for Muslims, stipulates that: “A Husband or Wife is not allowed to sell or transfer the community property without the consent of the other.” This makes perfect sense because mutual consent must be obtained from the other spouse. When it comes to mixed couples, such consent cannot be obtained from your foreign spouse because they are not allowed to own property in Indonesia.

So, how could consent can be retrieved when someone is not in the legal position to hold it? Therefore, in order to avoid this kind of trouble, it would be prudent to draft a prenuptial agreement complying with Indonesian law to ensure that your financial interests will be upheld by an Indonesian court.

Importance of Separation of Property

The idea of having a prenuptial agreement for mixed nationality couples, among others, is to have a property separation regime in your marriage since the Indonesia’s Marriage Law is assuming joint property ownership in all marriages. The Marriage Law is applicable to all Indonesians and to all marriages registered in Indonesia. Furthermore, the Basic Property Law in Indonesia does not allow foreigners the right to own property in Indonesia. Therefore, when an Indonesian is married to a foreigner she/he will be precluded to legally own property in Indonesia.

The prenup creates a legal framework for a property separation in your marriage and thus preserves the rights of the Indonesian spouse to own property in Indonesia. The property ownership must be under the Indonesian spouse's name as the title holder. In the event the foreign spouse passes away, the Indonesian spouse may keep the property for good. Given the origins of the prenuptial agreement in Indonesia are in marital property provisions, therefore it can be concluded that the main contents of a prenup are about the rules of community property notwithstanding the provisions of the Civil Code.

If the Indonesian spouse dies, the foreign spouse must transfer the property within 12 months to other Indonesian's name. In many cases, this may be the child/children of the couple. At this stage, the stipulation imposed by the 1960 Basic Property Law is still applicable for foreigners. The prenup protects your financial interest in the event one of you passes away. Just remember, it must be agreed up and signed before the marriage, otherwise it won’t be valid or legally binding.

Record the Agreement

There are two registrations required for a prenuptial agreement. A premarital agreement must be recorded with the registrar’s office of the local district court and the marriage registry. The agreement will take effect for the husband and wife when the marriage is recorded at the Civil Registry or the Office of Religious Affairs and shall take effect against third parties upon the date of registration with the local district court where the marriage will take place.

The 1974 Marriage Law in Article 29(1) stipulates that: “At the time of or before the marriage took place, with the mutual consent of both parties, they may enter into an agreement approved by the Civil Registrar of Marriage, after which it shall also apply to third parties as long as it involves them as well.”  Another provision stipulated in the marriage law is that the agreement cannot be amended during marriage, except upon approval of both parties and cannot cause disadvantage to any third party. This stipulation comes from Article 29(4) in the Marriage Law.

Registering a prenup with a district court is also required. If the agreement is not recorded at the local district court, then it will be considered that no prenuptial agreement exists. Thus, your marriage will have joint ownership in property. Article 152 of Civil Code states: “No stipulations in the prenuptial agreement which deviate entirely or partially from the provisions regarding legal community property shall apply to third parties, earlier than from the date of copying such stipulations in a public register, which shall be done with the court clerk at the court of justice, within whose legal jurisdiction the marriage was executed.”

Death of Either Party

If your Indonesian spouse passes away, the foreign spouse will have to transfer the property title within one year. To transfer the property you need to sell it to another Indonesian or pass it to your children. Under 2006 Citizenship Law, children born into mixed marriages are entitled to dual citizenship. They can keep the two citizenships until the age of 18 plus they have another 3 years to choose one of the two citizenship. In the event they did not choose Indonesian citizenship they will be treated as foreigner and therefore will not be able to hold the property any further. On the other hand, if the foreign spouse passes away, the Indonesian spouse can maintain ownership of the property.

Back-dated Prenuptial Agreements

A back-dated prenuptial agreement is not legal. Even though, you may find someone that might silly enough to provide you with a back-dated prenup, one can always tell that it's a back-dated prenup. A back-dated prenup is a marital agreement that dated prior to your marriage, but signed after you're already married.  People does that because they realize they need it after they are married.  So, they back-date the prenup as if it was signed prior to your marriage. But don't forget how the prenup may legally binding between you as husband and wife, and against other third party. It requires registrations, both at the clerk office of a district court, and at a marriage registry. The two registrations won't show back-dated registrations. They can only give you actual-date registration.

So, instead of getting a back-dated prenup, why don't you get a postnup. It's  some sort of a prenup signed after you get married. You may read it further here, and here.

Indonesian Prenup signed Abroad

In the event that you’re living abroad, or your marriage will be performed outside Indonesia and you cannot come to Indonesia just to sign a prenuptial agreement. You still can have a legally recognized prenuptial agreement by meeting the following legal formalities:

The Choice of Law. Your prenup must be governed under the laws of the Republic of Indonesia. There are several requirements in order to comply with this: a) it must be written and signed in the Indonesian language (English version may be provided for mutual understanding),  b) the prenup clearly states that Indonesian law is the law of choice, and therefore c) an Indonesian court must be used as the forum to resolve any dispute. Article 31 (1) of Law number 24 of 2009 regarding Flag, Language, State Symbol, and Anthem stipulates that: “Indonesian language must be used in the memorandum of understandings or agreements involving government institutions, government agencies, Indonesia’s private organizations or Indonesian citizens.” Any legal documents not complying with this rule may be null and void.

Indonesian Embassy Attestation. Since Indonesia is not a member sate of the Hague Convention on Abolishing the Requirement for Legalization for Foreign Public Documents, you must sign your prenup at the nearest Indonesian Embassy or must be attested by the consul staff at the Consulate. The place of signing must be the same country where you’re registering your marriage. This is related to the reporting of your overseas marriage.

Marriage Reporting at the Indonesian Embassy/Consulate. When you get married abroad, an Indonesian citizen is obligated to report the marriage to the Indonesian Embassy/Consulate in line with Article 37(1) of Administration of Population Law. This is a good time to register your prenuptial agreement as well.

Marriage Reporting at the Civil Registry. This is a permanent overseas marriage reporting and the burden of such reporting shall be on the Indonesian citizen. There are two laws regulating this issue: i.e., 1974 Marriage Law, and 2006 Administration of Population Law. The first one stipulates that it must be done within one year of the start of the marriage, and the latter states that it must be done in 30 days. Both laws impose the reporting time frame must be conducted upon your return to Indonesia. Usually, they will impose the latter law. Therefore, you need to report your overseas marriage, and as well as your Indonesian prenup signed abroad.

Foreign Pre-Nuptial Agreements

It may also be advised to have a pre-nuptial agreement that is valid in the country of origin of the foreign spouse to govern assets in the foreign spouse's country of origin. It should be registered in your country or through the consular section of your embassy in Jakarta. Both agreements are ONLY valid in the country they have been tailored for.

Updating the Prenup

It is important to understand the need to keep the agreement up-to-date. The agreement should be designed to accommodate the passage of time and changes in status, such as the birth of children, and increases or decreases in wealth, or the disability of either party. Since no agreement can take into account all possible eventualities, however, you need to review the agreement periodically with an attorney to keep it current.

Updated on Dec. 7, 2012.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this article nor in this website.

11/05/2011 - 00:00

Custody and maintenance of children, like other family matters in Indonesia such as divorce, and inheritance; is governed by religious affiliation of the respective spouses. Some of you may find it absurd, but this relates to the belief that religion plays an important role in the family environment.

Child Custody for Moslem

The questions regarding who is entitled to custody or maintenance of children in the event of a divorce between a husband and wife who are Moslems, are subject to the provisions of the Compilation of Islamic Law, and also subject to the principles contained in the Religion of Islam. In the event of divorce, the maintenance of children who have not yet mumayyiz (under 12 year old) is their mother’s. In the case of mothers has died, then the position of woman as the holder of the rights can be replaced by the following persons: a). the women in a straight line upward from the mother, b). father, c). the women in a straight line upwards of the father; d). sister of the child concerned; or e). Blood relatives of women by the side line of the father. So, under normal circumstances, the law prioritizes custody to the mother of the child. Please take a note, under normal circumstances! If you think your particular situations are not even close, please continue reading.

For children who already mumayyiz, it is up to the child to choose between his father or mother as the holder of the right of maintenance. Nevertheless, the father of the child has the responsibility to provide child support according to his ability regardless who holds the custody.  He should provide child support at least until the child is able to take care of him/herself or have aged 21 years. This provision relates to the principle in Islam that the father is the bread-maker in the family. The fact that in this modern world where women are also working and making good career, it does not forbid the obligation of a father to provide the child support. Something we must realize is that other than as husband and wife, we all have other capacity that is as father and mother for children born in our marriage.

Child Custody for Non-Moslem

Child custody and maintenance for Non-Moslem is applicable for children under the age of 18 years old or unmarried. In case of divorce to both parents, the provision of child custody and maintenance can be found in 1974 Marriage Law, Child Protection Law, and Indonesia’s Civil Code.

The 1974 Marriage Law stipulates that in case of divorce, both parents are still obliged to maintain and educate their children until the child marries or able to support themselves. In the event of disputes, they are still obliged to maintain and educate their children until the child marries or able to support themselves. A district court may enter into a verdict on the disputes. The provision sends a message that child custody and maintenance in the event of divorce is still a part of the obligations and responsibilities of spouses. Furthermore, Child Protection Law provides that parents are obliged and responsible for caring, nurturing, educating, and protecting children, fostering the children in accordance with their abilities, talents, and interests, and should prevent the occurrence of early marriage.

The Civil Code stipulates that the legal consequences of a divorce may end the parental authority (ouderlijke macht) and turns into guardianship (voogdij). When the marriage dissolved by the court, there should also be regulated on the guardianship of the underage children. The guardianship shall be determined after the judge hears family from both parents with close relationship with the child.  Determination guardian also may be reviewed by a judge at the request of the father or the mother based on changing circumstances.

How Can You Lose the Custody?

Being a holder of child custody and maintenance is not permanent. A father or a mother could lose child custody and maintenance in the event he/she cannot guarantee the child’s physical and spiritual safety.

If You’re Moslem

At the request of child’s relatives concerned, the religious court may transfer the custody rights to other relatives who have rights of custody as well. Although child custody is a right of a mother, but sometime she could lose the rights due to special factors. There are factors that can impede her rights in obtaining child custody, among others, are:

  1. Ar-Riqqu. Literally, it means that the person concerned has status as a slave. I believe this is no longer applicable as we recognized equal status to all human being. Nevertheless, this can be further interpreted that the person has no freedom at her will. Don’t get me wrong! For example, you are working abroad and you cannot attend the child on daily basis in Indonesia. You need help from your family in Indonesia to take care of the child. On the other hand, your husband resides in Indonesia. Instead of giving the custody to you as the mother of the child, or giving a way the custody to wife’s parent; the father of the child will prevail and shall be the most appropriate parent to hold the custody and maintenance of the child.
  2. The Fasiq. She conducts immoral behaviors such as having an affair with other man, or even worse, committing adultery. Can we trust her with the responsibility of parenting?  When the court found her committing adultery, she will no longer entitle to child custody. How come? If she still has the custody, she will educate the child in accordance with her bad habits. Remember, our children learning by examples of their parents. The Islamic Law finds that the Fasiq will give negative impact to the children.
  3. The Kafir, means Non-Moslem person. The Islamic Law finds that they should not be entrusted with the parenting right of a Moslem child. Furthermore, the Islamic Law finds that they have the possibility in deceiving the child and removing it from the religious beliefs of Islam.
  4. A woman re-married with another man. On the issues of parenting, a mother holds primary rights to child custody and maintenance. However, the right will be automatically revoked when she married to another man with no family relationship with the child (ajnabi). On the other hand, if she married to a man with ties of kinship with the child, the mother custody is not lost.  The revocation of the custody right shall be on the ground of religious court’s order.  In this particular situation, I would like to refer to the Hadits of Prophet of Muhammad:

أَنْتِ أَحَقُّ بِهِ مَا لَمْ تَنْكِحِي

You have more right to nurture him/her as long as you are not married.”

When the impediment factors are disappearing, for example the mother divorced again, she will get her custody right back. Some women don’t know about these rules when they got divorce. When our firm work for a case in a religious court in Bali, we advised our client to resign from her employment abroad to avoid her losing the custody. Nevertheless, such decision sometimes cannot always be accepted by everyone. Having a custody means that you have a responsibility to raise the child. When you and your ex do not cooperate, you will face difficulties in doing the job. After all, it’s not easy being a single parent.

If You’re Non-Moslem

Every child has the right to be taken care of by their parents, unless there is a reason and/or valid legal rules indicate that the separation with the parent is in the best interests of the child and should be taken as the final consideration. However, court decisions remain to decide custody of parents against children when one of their parents behave poorly and neglect their obligations towards the child. Nevertheless, someone who holds child custody and maintenance must be of the same religious affiliation with the child. The existence of this provision will ensure the parent will provide religious education for the child properly.

The Child Protection Law further stipulates that parental authority of one or both parents may be revoked at the request of the other parent or adult siblings or authorized officer based on the court verdict due to neglecting the duty towards the child and behave badly. Let me be more specific on the definition of other parent. It can be either grandmother of the child from the father’s line, grandfather of the child from the mother’s line, and the child’s family in straight line upward (grandfather or grandmother of the child). The first one is being prioritized in the event both parents are being revoked by the court.

In view of the above and regardless who have the custody, I believe you and your ex must work together in raising the child. Both of you still have obligations and responsibilities even if you’re not married anymore. Set aside the ego, and work side by side for your flesh and blood’s upbringing. I know it is easier said than done, but it is worth to try.

Well, I hope you get the whole picture about this issue and most important is that you have enough access to the legal system that protects your rights.  At Wijaya & Co, we are helping people with their legal issues and assisting them to have access to the legal system in Indonesia. This information is to help them to gain the access and please feel free to forward it to others who might need the information. I’m Asep Wijaya, and thanks for helping Wijaya & Co spreads the access to the legal system in Indonesia.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this article nor in this website.

25/10/2010 - 00:00

Oil and gas business activities in Indonesia are carried-out under two (2) types of activities i.e. upstream and downstream business activities.

Upstream Business Activities

Upstream business activities are the core business activities or based on activities which consist of exploration, and exploitation. Exploration is an activity aimed at obtaining information on the condition geology to find and obtain the estimated reserves of Oil and Natural Gas specified in the Work Area. Exploitation is a series of activities aimed to produce oil and Gas from the specified Work Area, which consists of drilling and completion of wells, construction of transportation facilities, storage, and processing for the separation and purification of Oil and Gas in the field as well as other activities that support it.

Downstream Business Activities

Downstream activities are the business which consist of processing, transporting, storing, and trading. Processing is an activity to purify, obtain the parts, enhance quality, and enhance the added value of petroleum and/or natural gas, butnot including field processing. Transporting is the activities of splitting oil, gas, and/or results processed from the Work Area or from shelters and treatment, including gas transport by pipeline transmission and distribution. Storing is an activity of receiving, collecting, storage, and expenditure oil and/or gas. Trading is the activity of the purchase, sale, export, import of petroleum and/or results processed products, including trading of natural gas via pipeline.

19/10/2010 - 00:00

You and your spouse are foreigners. Both of you have been living in Indonesia for several years due to work commitments. Either your spouse works in Indonesia or being your dependent, both of you are residents of Indonesia. After all you have been through, you find the romance is no longer exists and you are seeking divorce as the ultimate solution.

In any country, divorce is tough for everyone involved. Obtaining a divorce can be costly and expensive. It’s even tougher when you file for divorce in a foreign country.  The last thing you want to do is file for divorce in your home country and have the court dismiss your case due to lack of subject matter of jurisdiction. This could cost you even more.

Legal doctrines may say that you are now the subject of International Civil Law due to your long residence abroad. It’s pretty complicated whenever there is more than one legal system involved in your particular case. You need to work through all the necessary procedures in order to see that it’s possible to file for a divorce in Indonesia, when both spouses are foreign nationals.

Indonesian Court Perspective

The Indonesian legal system should not refuse to examine, hear, and decide a case filed, even when there is no clear legal reason for the case to be filed in an Indonesian court. The court is obliged to examine and judge the case. This is a basic principle in the judicative system in Indonesia. Period.

The court may not refuse to examine the case. But do they have any jurisdiction over your case?  If, both of you are foreign nationals and your marriage was conducted and legally registered abroad you may wonder if the Indonesian courts could have jurisdiction over a divorce in your case.

Let’s Cut to the Chase: The International Civil Law (ICL)

In the divorce between two foreign nationals, there are foreign elements involved. Therefore, the case shall be considered as an ICL proceedings. ICL is a national law. It’s not a supranational law or international law. Therefore, every country, including Indonesia, has ICL system respectively. Furthermore, there are major issues within the ICL, they are Choice of Law and Choice of Forum/Jurisdiction. Official domicile of the Parties is a link point to determine the forum court of competent jurisdiction to examine the case. This deals in determining the personal status of a person.

There are several ways to determine the personal status of a person that is principle of citizenship or nationality (Lex Patriae) and principle of domicile. In the principle of nationality, one’s national law determines his/her personal status. It means, even though one is residing abroad, his/her nationality law shall prevail and therefore the court in his/her home country shall have jurisdiction upon him/her. While the principle of domicile, on the other hand, one’s personal status is determined from the country where they live. It means that the law and the court where he/she lives shall have jurisdiction upon him/her.

Each country has different principles in determining one’s personal status. Let’s take Indonesia and the United States as examples. Indonesia adheres to the civil law as its legal system, while United States adheres to the common law legal system. Civil law countries use the principle of nationality and common law countries use the principle of domicile. These are very closely related to the jurisdiction of the court to adjudicate a case of divorce.  Therefore, the marriage of the US nationals must be dissolved in their country.

On the other hand, according to the state that adheres to a common law system such as United States, the party’s residence or domicile must exist at the time the proceedings are filed. In order for a US court to have subject matter jurisdiction to dissolve a marriage, either party must have been physically present within the country for a certain period of time prior to the filing of the petition for dissolution of marriage. The divorce, therefore, should be finalized in their country of domicile.

This is where renvoi (re-appointment) serves. Renvoi arises because of the differences in determining one’s personal status. It requires the US court to dismiss your divorce case due to lack of subject matter of jurisdiction. Although Indonesia is not a state of the United States of America, nevertheless, the Indonesian decree is an order from a foreign nation which the US court cannot ignore subject to certain restrictions. Furthermore, the court shall re-appoint Indonesia as the forum in dissolving the marriage. This is where Indonesian court has jurisdiction based on the re-appointment (renvoi).

So What Next?

In Indonesia, marital dissolution is a personal status related case under the category of family law. If both spouses are US nationals, the Indonesian court shall consult and utilize US family law regarding legal grounds for marital dissolution during the proceedings. The legal grounds in the US family law must not contradict with the public policy (ketertiban umum) in Indonesia. To be more specific, it must be in line with the legal grounds for divorce as stipulated in Indonesia’s Marriage Law and its implementing regulations.

Let's Take It to the Next Level!

After the Indonesian court declared the jurisdiction to adjudicate the case, and the legal grounds for divorce is in line with the public policy in Indonesia, the case shall be tried by using Indonesia’s civil procedures law. This is when the case enters regular phase  within the Indonesian court.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this article nor in this website.

22/06/2010 - 00:00

The precise origin of the legal concept of the joint venture (or joint “adventure,” as it sometimes is called) is not known. Some believe that the concept originated in the United States.  Originally, the courts treated joint ventures simply as a special form of partnership, applying the law of partnership. But beginning in the late nineteenth century, the courts began to recognize the joint venture as a separate legal entity with qualities that distinguished it from a partnership.

In a modern joint venture, the parties combine their resources, usually comprising capital, knowledge, skill and services, in the conduct of a business venture, but without necessarily organizing a partnership in the legal sense.

What Is It?

Joint ventures may be either structural or contractual, or both. They also may conform to a statutory or other regulatory scheme. The cooperative relationship may be broad based or narrowly defined. It may be long term or transitional. While subsequent chapters primarily address long term joint ventures having a corporate structure, all ventures-regardless of duration or form-have some characteristics in common. Understanding these characteristics is the first step toward reducing the inevitable risks associated with joint ventures through effective planning, negotiation, management and ultimate termination of the venture.

Long term joint ventures, particularly those that are broad based, usually are best suited to a corporate structure. Short term or narrowly defined joint ventures often are better formulated contractually. Partnerships, business trusts and hybrid structures also house joint ventures. Corporate joint ventures are characterized by shared ownership and often by shared functions, such as research and development, manufacture, assembly or marketing as well. Shared function often leads to shared dependency. Contractual joint ventures usually are more narrowly based than corporate joint ventures. They often involve a combination of product distribution, licensing or OEM arrangements. They also may involve research and development. While contractual joint ventures may be long term, they have no shared ownership with its accompanying shared governance. The participants may, however, share a function, with resulting mutual dependency. Contractual joint ventures may require shared management of a particular function. Thus, contractual joint ventures and corporate or other structural joint ventures share the need for management continuity.

Why Joint Venture?

Joint ventures are vital to business. They have become an important strategic option for many companies-particularly those operating internationally. Few companies have the capital, skills or market access necessary to achieve their commercial objectives entirely through their own resources. Rarely a day passes without an announcement of a new joint venture, alliance or collaboration. Reason for particular joint ventures do, of course, vary. They include:

  1. Cost savings. A common rationale is the objective of saving costs by sharing with a joint venture partner or partners the costs of research and development (R&D) or capital investment programmers (a particular feature given the magnitude of investment costs involved in many industries such as electronics, defense, pharmaceuticals, telecommunications and aero-engines).
  2. Risk sharing. A similar rationale is the objective of sharing with another party or parties the significant financial risks involved in undertaking a speculative or capital intensive project.
  3. Access to technology. Joint ventures may also provide a route for a party to gain access to a co-venturer’s technology and skills and thus accelerate its entry into a particular technology or market.
  4. Expansion of customer base. International joint ventures can also provide the most effective route for a party to expand the scope of its customer base by utilizing a co-venture’s strength in different geographic markets or by buying-in to a co-venture’s distribution or sales network.
  5. Entry into emerging economies. Similarly, joint ventures may provide the best, and sometimes only realistic, route for gaining entry to new emerging markets in areas such as Eastern Europe or Asia where access to local knowledge, contacts or sponsorship is often a practical necessity.
  6. Entry into new technical markets. The rapid pace of technological change is itself producing new markets and effective entry into those markets can often be accelerated by participation with another company that already has a technical start in that field; a ‘go-it-alone’ strategy may simply take too long or cost too much.
  7. Pressures of global competition. On an international scale, the merger of similar businesses between two or more participants may be desirable in order to establish the economies of scale, global customer reach, and purchasing power or capital investment resources necessary to meet the strength of international competition.

There may be other reason, since many ventures will be based on more than one objective. The objectives may also not be the same for all joint venture parties. An added complexity in analyzing commercial objectives is that a joint venture may not be an ‘and-game’ in itself. It may be an interim stage in a party’s long-term business strategy or simply, in itself, intentionally a short-term strategy which may be subject to review at a later stage. Joint ventures frequently change in scope over time.

Planning Joint Venture

A joint venture initiative may arise internally or in response to an external proposal. Internal initiatives may result from strategic planning or from existing suppliers, distributors, or competitors or from companies with whom no current business relationship exists. Whatever the source of the initial joint venture proposal, whether internal or external, participants must undertake financial and operational analysis, evaluate managerial, technical and other staffing requirements, deal with legal and administrative requirements, and evaluate the other venture’s capabilities and motives.

This planning process should include both those with financial or administrative responsibilities and those with operational responsibilities. Internal consensus as to the venture’s structure and course must be reached among those who are to share ongoing operational, financial and administrative responsibilities for the venture. Operational consideration such as a perceived need for entry into a particular market should not dictate a joint venture with undue long term financial or administrative risks. Conversely, a long range strategic plan calling for market expansion should not impose a joint venture upon an operation with insufficient resources or motivation to successfully implement it. If consensus is not reached an anti-venture lobby within the company may ultimately poison a particular joint venture by withholding financial or operational resources critical to its success.

22/06/2010 - 00:00

In July 2000, the Indonesian government began to implement the Consumer Protection Law of 1999 by requiring registration of imported food products.  Importers must apply for a registration number from the Agency for Drug and Food Control (BPOM). All imported food products must be tested by BPOM.  Fees for such testing range from Rp 50,000 ($6.00) to Rp 2.5 million ($300) per item, and between Rp 1 million ($120) to Rp 10 million ($1200) per product.

Indonesia’s government also has been gradually implementing a strict food labeling law that requires labels written only in the Indonesian language on all consumer products.  Labels may not include any other languages.  Beginning January 2001, Indonesia’s regulations required labels identifying food containing "genetically engineered" ingredients and "irradiated" ingredients. BPOM, which is an arm of the Ministry of Health, must test all processed food products and is also responsible for labeling and the issue of registration numbers (MLs) for imported food products.

ML Numbers System in Indonesia

Under the Consumer Protection Law, a registration system covers all processed food products. Its key elements are:

  1. Details of products, including their ingredients, must be submitted to BPOM, together with samples and evidence of testing by authorities in the country of origin
  2. Upon approval, a registration number is issued (for imports the ML number, which must be printed on food package labels)
  3. Products must be re-registered every five years
  4. The ML numbers (abbreviation of “Makanan Luar” or “Imported Food”) are importer specific.

Products must be registered with BPOM before clearance through Customs and carry the appropriate sticker. Importers, distributors or retailers dealing in unregistered products are in breach of the regulations and subject to penalty. The time it takes to register goods is also significant—up to six months, although some cases can take longer.

Imported Food Products Registration

All processed food products imported must be registered with the National Agency of Drugs and Food Control (BPOM) except for:

  1. Processed food with a life of less than seven days at room temperature.
  2. Processed food representing a donation to the Government or to a Social Institution.
  3. Processed food in small quantities for the specific purposes of registration with the National Agency of Drugs and Food Control (BPOM), scientific research or personal consumption.

Registration requires submission of five standard forms in triplicate together with:

  1. A sample of the food.
  2. The label (10 copies) and brochure if applicable.
  3. For repackaged product, the operating license of the Indonesian business involved and a letter of reference from the original production plant.
  4. For product produced under license, the Indonesian company's license and a letter of reference from the overseas factory.
  5. For imported products a reference letter from the overseas factory, a health certificate and a radiation free certificate in accordance with existing law.

Following consideration, the product may be:

  1. Registered with the issue of Form M1;
  2. Conditionally registered with the use of Form M2; or
  3. Rejected from registration via the issue of Form M3.

Other Specific Standards

GMO’s (General Modified Organism)

Any producer using genetic engineering must ensure that the product is safe for human consumption before distribution. In terms of labeling requirements for GMO’s: 1) The words GENETICALLY ENGINEERED FOOD shall be contained in labels of food resulting from genetic engineering; 2) In the case of processed food which results from genetic engineering as meant in paragraph being ingredients used in certain food products, the information on genetically engineered ingredients of foods resulting from the genetic engineering on labels shall be enough.

Labeling

New food labeling requirements were introduced in 1999 and are the responsibility of the Food and Drug Control Body (Badan POM or BPOM). Labeling requirements are designed to ensure that the consumer can be accurately informed about the ingredients in processed food and its status as a halal or non-halal product. Post market control is maintained through sampling and testing food products. Where discrepancies occur there are powers to reprimand, order withdrawal of products from sale, or prosecute through the courts.

Key points of the current labeling requirements include:

  1. All packaged food products distributed in Indonesia must be labelled exclusively in Bahasa
  2. Indonesia language, Arabic numbers and Latin letters.
  3. The use of any other language, number and letters is permitted only where there are no
  4. Substitute Indonesian words or if there is a difficulty in finding Indonesian words with a similar meaning; such approval must be obtained from the Indonesian Attorney-General.
  5. The use of stickers was authorized temporarily (until new legislation was enacted).
  6. Specific wording regarding content is required for labels of certain food items including milk
  7. Products, baby food, alcoholic beverages, and halal food.
  8. If the product is halal, it must be certified by an approved authority
  9. The expiration date of perishable food items must be shown (and products must be landed
  10. in Indonesia with at least 2/3 of their stated shelf life remaining).
  11. Food additives must be identified.
  12. The name and address details of the importer must be stated.
  13. There are specific requirements for labeling of products with GMO content greater than
  14. 5% and also for irradiated products.
  15. SNI marks must be shown when relevant compulsory standards exist (these apply to sugar,
  16. Salt and wheat flour.

Halal certification

The Indonesian authorities do not require halal certification for all imported foodstuffs. But while certification is not compulsory, 88% of the Indonesian population is Muslim and the Indonesian Islamic Council (MUI) prefers all food products to be halal accredited. Halal is an Arabic word meaning lawful or permitted. The opposite of halal is haram, which means unlawful or prohibited. Halal and haram are universal terms that apply to all facets of life. However, in Indonesia, these terms are used only in relation to food products, meat products, cosmetics, personal care products, food ingredients, and food contact materials.

All foods are considered halal except the following, which are haram: a. Swine/pork and its by-products; b.  Animals improperly slaughtered or dead before processing;  c.  Animals killed in the name of anyone other than Allah (God); d.  Alcohol and intoxicants; e.  Carnivorous animals, birds of prey and land animals without external ears; f.  Blood and blood by-products; g.  Foods contaminated with any of the above products.

Food Additive Regulations

The Food Act of 1996 states that food additives are not to be used if they have been banned, or may not exceed specified limits.  This implies a "negative" regulation of food additives, but the subsequent clause states that the Government will determine which substances are banned as food additives and/or may be used in food production and also the content limit.  Hence the regulation is "positive" in that the Government states those additives that may be used. Approval is the prerogative of the Director of Food Safety Evaluation, a subordinate of the Deputy of Agency for the National Agency of Drugs and Food Control (BPOM).  The regulation states that approval will be based on assessment against guidelines prepared by the Head of Agency.

Every import of food additives must be reported in writing to the Division of Food Certification, BPOM after the goods arrive in harbor.  The report must include:

  1. The name of the substance and batch quantity and weight.
  2. The name and address of the importer.
  3. The name and address of the exporter.
  4. The name and address of the producer.
  5. The port and date of lading.
  6. The port of destination and date of arrival.
  7. The name, nationality and registration number of the ship or aircraft carrying the food
  8. Additive import.
  9. The name and address of the warehouse and date into store.
  10. An outline of any accidents that may have occurred during shipping.

A certificate of analysis for the applicable batch must accompany every import of food additives.  The certificate may be issued by the production plant or by the responsible authority in the country of origin.  Before the import is cleared from the point of entry the Director of Food Certification, BPOM must agree the certificate.  If a certificate does not accompany an intended import, then a certificate must be requested from the Director of Food Certification before the food additive shipment may enter the country.

The certificate must include:

  1. Date that the sample was taken.
  2. Batch number of the product
  3. Test date.
  4. Test method.
  5. Statement that the test result was in accordance with criteria for the product.

A food additive product from an animal source must also have a certificate of conformity with Islamic purity, "Halal".  That certificate is to be issued by the responsible authority in the country of origin.  Food additives produced, imported or distributed must comply with the Indonesian Food Codex or conditions approved by the National Agency of Drugs and Food Control (BPOM).  For food additives not listed in the Indonesian Codex, or not having conditions determined by the National Agency of Drugs and Food Control (BPOM), the FAO/WHO Codex Alimentary Commission or Food Chemicals Codex is applicable.

Compiled from various sources.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this article nor in this website.

21/04/2010 - 00:00

In Indonesia, every divorce lawyer will have to refer to the 1974 Marriage Law and its implementing rules for divorce and  marital dissolution. A divorce petition must be filed at the local district court for Non-Moslems, and local Religious Court for Moslems. There are certain marital dissolution reasons according to 1974 Marriage Law and Islamic Law, they are:

Marriage Law

Pursuant to Marriage Law, a marriage may be terminated due to several reasons as follows:

  1. Death of either party
  2. Divorce
  3. Upon court’s decision

Death

The death to either party will automatically terminate the marriage.

Divorce

One of the means to dissolve a marriage is by divorce. Divorce may only be executed before a court session, before the district court for Non-Moslems and before the religious court for Moslems. Therefore, either one of the parties wanting to divorce needs to file a divorce petition to the court.

There are  legal grounds of filing for divorce that every divorce lawyer has to advise his/her clients with, and they have been regulated in the Marriage Law, which are, in the event one of the parties:

  1. has committed adultery, is an alcoholic, is addicted to drugs, is a gambler or exhibits other vices which are difficult to cure;
  2. has left the other spouse for two consecutive years, without consent and without legitimate reasons or the absence of reasons beyond his control;
  3. has been sentenced to imprisonment for five (5) consecutive years or a longer period;
  4. has resorted to cruelty or severe ill treatment, endangering the life of the other spouse;
  5. has developed a disability or disease, preventing from fulfilling the duties of husband or wife; or
  6. has irreconcilable differences.

Annulment to Dissolve Your Marriage

Marriage annulment means that any marriage may be cancelled if both parties cannot fulfill the conditions for the marriage. A marriage annulment can only be decided by a court of law.

Families in a straight line of descent and above the husband or wife (For example: father, mother, grandfather etc of husband or wife.) , an authorized/appointed official, and anyone directly possessing legal interest in the marriage may file a request for marriage annulment.

Any request for marriage annulment may be submitted to a court within the jurisdiction where the marriage was conducted or within the jurisdiction of the residence of the married couple (in accordance with Article 38 (1) Government Regulation No. 9 Year 1975 regarding the Implementing Rules of 1974 Marriage Law) the husband, or the wife. A marriage annulment may be filed for the following reasons:

  1. the marriage guardian (so called “wali” ) is illegal; or
  2. the marriage was not attended by two witnesses.
  3. The marriage was performed in front of unauthorized marriage registrar.

The right to annul a marriage by a husband or wife based on such reasons becomes null and void if they live together as a married couple and can show the marriage certificate issued by the unauthorized officer of the marriage registry. In this instance the marriage has to be conducted again in order to make it legal.

The husband or wife may request an annulment of their marriage, if the marriage was conducted before an unauthorized officer of a marriage registry, or if the marriage was conducted under a threat that violates the law, or if there is a misunderstanding between the husband and wife.

His/her right will be null and void if the threat has stopped or if the misunderstood party? realizes the situation, but doesn’t use his/her right to request for marriage annulment within six (6) months after living together as married couple. Example of a “misunderstood condition” would be if the husband thought the wife was a virgin, but in fact she was not – so I misunderstood about her personal conditions.

Annulment of a marriage commences upon the court decision and is permanent and legal binding and applies as of the time of marriage was conducted. However, such a decision is not retroactively effective to:

  1. children born from the marriage;
  2. husband or wife acting with good intention, except against joint property, if the annulment is based on a previous marriage. The annulment decision is retroactively effective to the joint property of the parties in the event the marriage was entered and one of the couples was not legally free to marry.
  3. a third party, so long as he/she has the rights based on good faith.

Islamic Law

In Islam, a marriage may be terminated due to several reasons, namely:

  1. Death of either party
  2. Thalak
  3. Judge’s Decision
  4. Khulu
  5. Li’an
  6. Ila’
  7. Murtad (apostate)

When a husband or wife passes away, their marriage is automatically terminated. When a wife passes away, her husband doesn’t have any legal difficulties in marrying another woman, but can remarry immediately. But, when a husband passes away, his wife has to wait for four (4) months and 10 days before she can marry another man.

Literally, thalak means to release (abandon). Thalak or divorce is the right given to a man and is an action of releasing a woman from the marriage. In Islam, this method of divorce has been stipulated, but it is accompanied by the explanation from the Prophet Mohammad that God doesn’t like divorce.

Divorce through a judge’s decision may be due to several reasons, such as, among others, that the husband is unable to provide the basic necessities of life, the husband commits torture against his wife, the husband vanishes (being far away from or not being near his wife), or that the husband is serving a term in prison.

Fasakh is the cancellation of marriage agreement (akad) and the termination of a marriage between a husband and wife due to damage taking place in the marriage agreement (akad) or due to sudden reasons that may hamper the continuation of the marriage agreement (akad). For instance, it could be due to a problem in the family relationships. Fasakh will cause the marriage agreement (akad) to be annulled.

Khulu’ is a divorce given by a husband to his wife with payment to the wife. Khulu’s is required by Islam for balancing the thalak right for a husband when there is a hatred that cannot be settled peacefully.

A marriage may be terminated due to li’an, because the person making the li’an in the fith oath says that God’s curse is upon him/herself if he/she is a liar. As a result of li’an, the marriage is terminated forever. If the accusing husband denies the birth of a child by saying that the child is not his, the child is not the offspring of this husband any longer, but legally becomes an illegitimate child and becomes the child of accused wife. The child cannot inherit from his/her father (the accusing husband). If the child is female, her guardian is a judge of justice, if the child will marry someone else.

Murtad (apostate) is when a Moslem abandons Islam. If a husband or wife is judged apostate, their marriage is terminated due to their action.

Marriage dissolution based on the grounds of thalak, li’an, and khuluk’ shall only valid in the event they are conducted at the religious court.

Annulment according to Compilation of Islamic Law

Compilation of Islamic Law which is enacted under Presidential Instruction Number 1 of 1991 also governs marriage annulment under several reasons:

  1. Polygamy conducted by husband without the permission from the Religious Court;
  2. The bride is not legally free to marry and still in a marriage with other man;
  3. The bride in the period of ‘iddah of her previous husband, Iddah means a waiting period where a woman is not allowed to marry other man. The period may vary according to the reason of her previous marriage dissolution i.e. 130 days due to death, and 90 days due to divorce;
  4. The marriage is not comply with the minimum of age requirement as governed by the 1974 Marriage Law;
  5. Married performed without wali nikah (marriage guardian) or performed with unauthorized one;
  6. Marriage performed under threat

Marriage annulment is also known as fasakh is the cancellation of marriage agreement (akad) and the termination of a marriage between a husband and wife due to defect taking place in the marriage agreement (akad) or due to sudden reasons that may hamper the continuation of the marriage agreement (akad). For instance, it could be due to a problem in the family relationships. Fasakh will cause the marriage agreement (akad) to be annulled.

Annulment petition can be filed at the local religious court having jurisdiction over the residence of husband or wife or may be submitted to the local religious court within the jurisdiction where the marriage was conducted. Court decree on marriage annulment shall take effect retroactively since the date of marriage took place.

Parties to authorize for annulment petition are:

  1. Family in a upper and lower straight line such as parents, and siblings;
  2. Husband or wife;
  3. Authorized officers responsible in supervising the performance of marriage as governed by law;
  4. Other parties who aware of any marriage defect in terms of marriage requirements as imposed by the prevailing law.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this article nor in this website.

07/01/2010 - 00:00

Will is the most common way for people to state their preferences about how their estates should be handled after their deaths. It is a legal document containing a statement of an individual’s wishes and intents to take effect following his/her death, and which can be revoked. Many people use their wills to express their deepest sentiments toward their loved ones. You can protect the people you love most, choose guardians for minor children, and make gifts to family, friends, and charities.

Making a valid last will and testament in Indonesia is the only way to ensure that your property passes to people of your choosing rather than to people chosen by the courts based on laws that are decades old. Without a will, the estate can be subject to many problems. Relative may also dispute over property, leading to lengthy proceedings, and a probate judge who does not know your personal wishes will dictate who gets your property and custody of your children after your death.

By having a valid last will and testament, you will have full control over how your assets (i.e. your estate) are managed and distributed after your death and who will look after your children when you are no longer around to do so. The clear terms of last will require no clarification and in the event they can be interpreted in several ways, the intent of the testator must be determined rather than interpreting the text literally. Making a Last Will A last will cannot be made by two or more individuals in one legal document, whether it is in favor of a third party mutual or reciprocal arrangement.

Everyone with property who have reached the full age of 18 years are allowed to make wills. The competence of the testator shall be judged based on the condition that he was in at that time that the last will was made. In last wills, conditions are unintelligible or impossible, or which violate the laws and good morals, shall be regarded as void. Last wills which are made as a result of duress, deceit or cunning shall be invalid. The Legitimate Portion The legitimate portion or the legal share of the inheritance is that portion of the estate which the lawful heirs in a direct line are entitled to and which the testator is not entitled to dispose of as a gift during his lifetime or by last will. In relation to the descending line, if the testator leaves only one legal child, the legal share of the inheritance shall consist of half of the property which the child would be entitled to inherit upon death.

In the event that there are two children, the legal share of the inheritance for each child shall be two thirds of whatever they would be entitled to inherit upon death. In the event that the deceased has left three or more children, then the legal share of the inheritance shall be three fourths of whatever each child should have inherited upon death. Children shall include the descendants, in any kind of degree; they shall, however only be regarded as substitutes for the child whom they represent in the inheritance of the testator.

Meanwhile, in the ascending line, the legal share of inheritance shall always consist of one half of that which is by law due, upon death, to each blood relative in that line. For the purpose of calculating the legal share, regard shall be had to those individuals who upon the death of an individual have become heirs to his estate but who have not been named as legatees under his will, and in the event that individuals other than the aforementioned heirs have been granted a share in excess of their legal share by deed during the lifetime of the deceased or by last will, provided that the aforementioned heirs were not present, the devises and gifts may be reduced upon a claim and in favor of the legatees and heirs or those entitled.

In the absence of blood relatives in the ascending and descending line, and of natural, legally acknowledged children, gifts by inter vivo deed or by last will, shall be deemed to be of the entire estate.

Disclaimer:

The above is provided for informational purposes only and is NOT to be relied upon as legal advice. This information is not a substitute for the advice of an attorney and should not be construed as a solicitation. No attorney-client relationship is established by use of information found anywhere in this website.

04/11/2009 - 00:00

Business activities in Indonesian may be carried-out in the form of a sole proprietorship, a general or limited partnership or one of a various number of corporations. However foriegn capital investment (so called "PMA Company") in Indonesia may only conducted in form of a limited liability company, being established and existed under the Indonesian laws and havin its legal domicile within the Indonesian territory.

The limited liability company (Perseroan Terbatas, so called "PT") is the most ideal vehicle for direct foreign investment because of its nature as an association of capital with objection to make profits and the laws on establishment of other type of legal entity does not accomodate foreign investors.

An application to the Investment Coordination Board ("BKPM") is necessary in order to have a foreign capital investment. A letter of approval (Investment license) will be issued by the Head of the Investment Coordinatong Board to the applicant after all of the requirements have been completed and fulfilled.

Form of Foreign Capital Investments

Foreign Capital Investment may be conducted in the form (1) Joint ventures between foreign capital and capital owned by Indonesian citizens and/or Indonesian statutory bodies. Under the current applicable regulation, the foreign party may have 95 % of the share in the Company, and at least 5 % of the share shall be owned by Indonesian citizen or legal entity; (2) Direct Investments, which the entities capital being owned by foreign legal entities, whether it is a foreign citizens or foreign statutory bodies.

A foreign entity may invest their capital through several ways, e.g. purchasing an existing company, wholly or partly as well as setting-up a whole new company.

Incorporation of a Limited Liability Company

In order to incorporatea limited liability company, the company shall at least require two legal entities (persons or business entities) or more ("Founder") using a notarial document written in Indonesian language. The founder may be represented by its attorney or proxies. Each founder of the company shall get their part of the company shares at the time the company is incorporated.

Deed of Incorporation

The notarial document which in this matter is the Deed of Incorporation shall contain the company articles of associations and other relevant information, at least information regarding personal or company profile of the founder, member of the board of directors ("BoD") and Board of Commissioners ("BoC") of the company for the first time appointed and name of shareholders and the shares that they hold, objectives and purposes of the company.

Approval from the Minister of Justice

In order to be able to commence its business legitimately, a company must apply for an approval of its incorporation from the Ministery of Justice ("MOJ"). It is then considered as a corporate body/legal entity. Normally, the MoJ shall grant the approval no later than 60 days after the receipt of the complete application. Once it is approved, the BoD of the company must register the company to the Company Registry Office in oder to be registered within the List of Company. After it has been registered, it will be announced within the Supplement to the Gazette of the Republic of Indonesia. As long as the registration has not yet been made, the BoD shall collectively be held responsible for all legal acts conducted by the company.

Limitations

Certain industries are entirely closed to foreign capital investment, the most notable being industries vital to the national defense, e.g. industries producing arms, ammunition, and military equipment. Large sectors of trading and distribution business, particularly domestice retail trades, exports and import are largely closed to foreign capital investment. The government gradually issue and publish a list of business sectors absolutely restricted as well as business sectors that are open but with certain conditions for foreign and domestic capital investment.

In regards to sales activities (merchandise selling), trading and its supporting services are restricted to foreign investment except for large retailers (superstore, shopping mall, etc), large scale trading (distributorship/wholesaler), restaurants, quality certification services, market research services and after sales services are opened for foreign investment. However these sectors are opened with certain conditions set-up by other relevant regulations.

03/09/2009 - 00:00

Children born outside of marriage are declared as illegitimate on their birth certificates under Indonesia's 1974 Marriage Law. In Indonesian, the term illegitimate is known as ''Anak Luar Kawin'' referring to the child born outside the marriage of the two parents. As such, these children do not have any legal claim against their biological fathers, as the identity of the father is not noted on the birth certificate.

This article will hopefully be useful for parents who are experiencing legal problems with their children born out of wedlock in Indonesia and wish to obtain legal recognition for their children.

Definition

An ''out of wedlock'' child is a child born outside of a marriage between the woman who is giving birth to the child with a man who caused her pregnancy. The legal parentage of the child may or may not be admitted by the father.

Parentage Acknowledged by the Father

A child born out of wedlock shall have civil law relations only with his/her mother. The child does not automatically have a legal parental relationship with the father. To establish that legal relationship with the father, Indoensian law requires an admission, referred to as ''pengakuan'', where the father admits that the child is in fact his child. The out of wedlock child already has a civil law relationship with the mother who is giving birth to the child. This grants a family relationship, with its legal consequences including inheritance rights, to the mother of the child (only). An admission of the parentage by the father will not create a family relationship between the child with his/her father's family.

Out of Wedlock Legalization

Legalization is the next step towards recognizing parentage of an out of wedlock child. The father that intends to legalize the child's birth must legally marry the child's mother. The legalization will grant family relationship between the child with her/his parent's and their families that have acknowledged the child's parentage.

Recorded at Civil Registry Office

The admission of out of wedlock child is not a hush-hush proceeding. It should be registered with the Civil Registry by recording the child's birth in the birth certificate registry or into the parent's marriage certificates (which will then grant legalization) or in a separate deed of civil registry or even written in a notary deed.

Once the parents are legally married and the birth is registered at the Civil Registry Office, the child's parentage is legally recognized by the Indonesian government. A new birth certificate, can be issued by the civil registry office, will have the father's name on it.

03/09/2009 - 00:00
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