Draft Bill on Business Entities Targeted for Enactment in 2026

The Directorate General of General Legal Administration (“ Ditjen AHU ”) of the Ministry of Law has completed the codification of Business Entity regulations that were previously fragmented across multiple regulations. This is reflected in the Draft Bill (“ Draft Bill ”) on Business Entities, which is targeted for enactment in the first half of 2026.

“This is indeed a long list on the National Legislation Program, but we are pursuing it and hopefully by 2026 we will be able to submit it to Indonesia’s House of Representatives for enactment,” said Andi Taletting Langi, Director of Business Entities at Ditjen AHU, in an interview with Hukumonline.

This Draft Bill not only simplifies regulations but also expands the scope of governance, ranging from facilitating the establishment of business entities, strengthening oversight mechanisms, to provisions regarding beneficial ownership in new forms of enterprises such as social enterprises.

Law No. 40 of 2007 on Limited Liability Companies (“ PT ”), as amended by Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation (collectively referred to as “ Law 40/2007 ”), is considered no longer able to accommodate current needs.

“One of the issues in Law 40/2007 is the existence of private agreements, and these need to be taken down in order to provide legal certainty going forward,” he explained.