Indonesia’s current regulations on franchises, as stipulated under Government Regulation No. 35/2024 on Franchising and its implementing regulation, Ministry of Trade (MOT) Regulation No. 71/2019 regarding Implementation of Franchising, highlight fundamental changes in franchise registration. These changes have introduced additional complexities and challenges in the franchise registration procedure, making it more difficult for franchise owners to navigate the process. New procedure Franchise applications are still submitted through the Online Single Submission (OSS) portal of the Capital Investment Coordinating Board (BKPM). However, the new procedure requires each applicant, including foreign franchisors, to have an OSS account and a business registration number (NIB) issued by BKPM. An application for franchise registration must be submitted under the applicant’s own account—submissions can no longer be made through the account of a consultant. Once a franchise application is submitted, the authority will distribute the submission to the MOT—the authorized ministry for franchise registration. Any notification or decision upon the registration made by the MOT will be available in the OSS system. Applicants should regularly monitor the status of the franchise application because no notifications will be sent to applicants to alert them of any deficiency. Here is the summary of the new procedure for franchisors: Notable Requirements The disclosure document, or prospectus, is the key focus for the MOT in examining a franchise registration for a franchisor. This document is subject to thorough scrutiny by the MOT to ensure that all mandatory information meets the requirements set in the franchise regulations. The current regulations specifically require that the mandatory clause “business system” in the prospectus cover operational standards and procedures, which should include human resource management, administration, operational management, standard operating methods, business location selection, business premises design, employee requirements, and marketing strategies. Other clauses that are equally important to pay attention to are:

The popularity of the franchise business model has been growing rapidly in Southeast Asia in recent years, with some of the world’s top brands becoming common sights in the commercial districts and shopping malls of major regional cities in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam. While for most countries in this part of the world, franchising has not been explicitly mentioned in legislation, well prepared franchise business operations can comfortably adapt to each country’s regulatory framework, and the growth is poised to continue even as the global retail sector redesigns and redoubles its efforts in the wake of the COVID-19 outbreak. In fact, the franchise business model, which is both global and hyper-local at once, is one of the most promising solutions that entrepreneurs are turning to in their quest to overcome the challenges of the new economic reality. The Regional Guide to Franchising Law in Southeast Asia provides key, up-to-date insights into the legal frameworks regulating franchise operations in these Southeast Asian countries, and helps brand owners understand the most relevant laws, authorities, and procedures for their business. Some of the essential topics covered for each jurisdiction include considerations in negotiating and designing franchise agreements, protecting intellectual property rights, and important information on judicial and arbitral procedures should a dispute arise between franchisor and franchisee. Practitioners from Tilleke & Gibbins’ offices in Cambodia, Indonesia, Laos, Myanmar, Thailand, and Vietnam contributed to guide—not only by providing legal expertise on the laws and mechanisms applicable in each jurisdiction, but also by examining strategies for establishing and running resilient franchise operations in Southeast Asia. The full guide can be accessed as a PDF through the button below.

Indonesia’s Ministry of Industry (MOI) has issued a new regulation requiring importers of textiles, textile products, bags, and footwear to furnish applicable trademark certificates when applying for an import permit. This means that a letter of appointment to import from the trademark owner or authorized representative is no longer sufficient to obtain an import permit for these goods. The requirement is detailed in MOI Regulation No. 5 of 2024 concerning Procedures for Issuing Technical Considerations for Imports of Textiles, Textile Products, Bags and Footwear, which took effect on March 10, 2024. Affected Products The new regulation applies to the following products: Textiles: Fiber, thread, fabric Textile products: Carpets, other textile floor coverings, clothing, ready-made clothing accessories, other finished textile goods Bags: Suitcases, wallets, school bags, sports bags, handbags, other bags Footwear: Shoes, sandals, moccasins Import Permits In principle, businesses can import textiles, textile products, bags, and footwear as raw materials, auxiliary materials, or consumer goods (for trading) after obtaining the appropriate import permit from the Ministry of Trade (MOT). There are three categories of import permits: General import permits for consumption (API-U), which are required for parties that conduct import activities for the purpose of trading; Import permits for producers (API-P); and Import permits for suppliers of raw or auxiliary materials (PPBB). Applicants for an import permit must submit an application for general importer verification (VIU), the results of which will inform the MOI’s technical consideration process. If the MOI issues a recommendation or approval based on their technical consideration, applicants will be able to proceed with the submission of their import permit to the MOT. The process of applying for and obtaining an API-U import permit has several steps, as shown in the diagram below. New Trademark Certificate Requirement Under the MOI’s March 2024 regulation, when applying for