Key Points of the Amendments to the MSME Law

The Ministry of Micro-, Small-, and Medium-scale Enterprises (“MSME”) is promoting amendments to Law No. 20 of 2008 on Micro-, Small-, and Medium-scale Enterprises, as last amended by Government Regulation in Lieu of Law No. 2 of 2022 on Job Creation (“Perppu 2/2022”) (collectively referred to as “MSME Law”). The proposed amendments are intended to align the MSME Law with several priority programs currently being advanced by the MSME Ministry.

“The MSME Law is planned to be reviewed because it has been in force for quite some time. There are several aspects that need to be refined,” said Bagus Rachman, Deputy for Medium-scale Enterprises at the MSME Ministry, to Hukumonline.

Bagus explained that one of the proposed amendments to be incorporated into the MSME Law concerns the establishment of an MSME Holding, which has become a key program at present. According to him, the MSME Holding currently relies solely on partnership arrangements, specifically supply chain partnerships among MSMEs as regulated under Government Regulation No. 7 of 2021 on the Ease, Protection, and Empowerment of Cooperatives and Micro-, Small-, and Medium-scale Enterprises (“PP 7/2021”), and has not yet been regulated at the statutory level.

Amendments to the Law are also required with respect to the definition of business scale based on turnover thresholds. Although such thresholds have been revised under PP 7/2021, Bagus emphasized the need for regulation at the statutory level, including an increase of the maximum turnover threshold for medium-scale enterprises to Rp 200 billion. This amendment is necessary to support the MSME Ministry’s Rise to IPO program.