Outsourced Activities Clarified: Scope of Work Limited to Six Supporting Services, with Two-Year Transition Period for Compliance

The Minister of Manpower (“ Minister ”) has issued Regulation No. 7 of 2026 on Outsourcing (“ Regulation 7/2026 ”). This framework will now apply to any companies that allocate certain types of work to outsourcing service providers (Perusahaan Pemberi Pekerjaan– “ Engaging Companies ”) and the various registered entities that provide outsourcing services (Perusahaan Alih Daya– “ Outsourcing Companies ”). [1] Regulation 7/2026 will now serve as an Implementing Regulation to the mandate specifically set out under Decision of the Constitutional Court (“ Court ”) No. 168/PUU-XXI/2023 (“ Decision 168/2023 ”). [2]