The legal system of Indonesia
A civil-law system received from the Netherlands and still resting on Dutch-era codes — the Burgerlijk Wetboek as the Kitab Undang-Undang Hukum Perdata, and the colonial commercial and criminal codes — with two further layers. Adat, the customary law of hundreds of communities, is recognised for land and family matters, and Islamic law applies to Muslims in marriage, divorce and inheritance through the Religious Courts and the Compilation of Islamic Law. Aceh additionally applies Sharia, including criminal provisions, under its special autonomy statute. A new Criminal Code was enacted in 2023 to replace the colonial code, taking effect in 2026.
Legal tradition
Indonesia belongs to the mixed civil, customary and islamic law tradition. A civil-law system received from the Netherlands and still resting on Dutch-era codes — the Burgerlijk Wetboek as the Kitab Undang-Undang Hukum Perdata, and the colonial commercial and criminal codes — with two further layers. Adat, the customary law of hundreds of communities, is recognised for land and family matters, and Islamic law applies to Muslims in marriage, divorce and inheritance through the Religious Courts and the Compilation of Islamic Law. Aceh additionally applies Sharia, including criminal provisions, under its special autonomy statute. A new Criminal Code was enacted in 2023 to replace the colonial code, taking effect in 2026.
How power is divided
Unitary but heavily decentralised since the 1999 regional autonomy laws, which devolved most service delivery to some 500 regencies and cities rather than to the 38 provinces. Aceh, Papua and its successor provinces, Yogyakarta and Jakarta hold special autonomy statuses with distinct arrangements — Aceh includes Sharia jurisdiction and its own political parties; Yogyakarta's governor is hereditary.
Where law comes from
- The 1945 Constitution
- Supreme; enforced by the Constitutional Court.
- Statutes (Undang-Undang)
- Passed by the DPR with the President; reviewable by the Constitutional Court.
- Government regulations and presidential regulations
- Reviewable by the Supreme Court against statutes.
- Adat law
- Customary law recognised for land and family matters where communities persist.
- Islamic law
- Applied by Religious Courts to Muslims; the Compilation of Islamic Law guides application.
The legal profession
Advocates are admitted under the Advocate Law 2003 after a law degree, a professional course, the bar examination and two years' apprenticeship, then sworn in by a High Court. PERADI is the principal bar association, though the profession has been divided by competing organisations, and the Constitutional Court has held that multiple bars may coexist while a single body administers admission. Notaries are a separate regulated profession with exclusive competence over deeds of incorporation and land transfers.
Law by topic in Indonesia
- Constitutional LawA 1945 Constitution transformed by four post-Suharto amendmentsThe 1945 Constitution was amended four times between 1999 and 2002, converting a highly centralised presidential system into one with direct presidential elections, a Constitutional Court, regional autonomy and an enforceable rights chapter. The Constitutional Court has since become a genuinely consequential institution, striking down statutory provisions with regularity.
- Civil ProcedureColonial-era HIR and RBg procedure, still not replacedCivil procedure remains governed by the Dutch colonial Herzien Inlandsch Reglement for Java and Madura and the Rechtsreglement Buitengewesten for the outer islands. A unified national civil procedure code has been drafted for decades without enactment. The Supreme Court fills gaps by circular (SEMA) and regulation (PERMA), including the e-Court system now mandatory for many filings.
- Employment & LabourManpower law rewritten by Job Creation, then partly re-legislatedThe Manpower Law of 2003 was substantially amended by the 2020 Job Creation Law, which the Constitutional Court declared conditionally unconstitutional in 2021 for procedural defects. The government responded with a Government Regulation in Lieu of Law in 2022, enacted as Law No. 6 of 2023. The result is that employment terms changed materially and the legal basis was contested throughout.
- Property & LandHak Milik for citizens only, with Hak Pakai for foreign residentsThe Basic Agrarian Law of 1960 created a hierarchy of land rights in which freehold (Hak Milik) is reserved to Indonesian citizens. Foreigners with residence permits may hold Hak Pakai (right of use), and foreign-invested companies use Hak Guna Bangunan (right to build). Adat (customary) land rights are recognised and coexist with the registered system.
- Business & CorporatePT companies under the 2007 Law, with the Positive Investment ListThe Company Law of 2007 governs limited liability companies (PT). Foreign investment uses the PT PMA form, and sectoral openness is now set by the 2021 Positive Investment List, which replaced the old Negative List and opened most sectors. Licensing runs through the OSS (Online Single Submission) risk-based system.
- Criminal LawA new Criminal Code enacted in 2023, in force from 2026Indonesia enacted Law No. 1 of 2023, a wholly new Criminal Code replacing the Dutch colonial KUHP, with a three-year transition making it effective in January 2026. It is the most significant criminal law change in Indonesian history and includes controversial provisions on cohabitation, insulting the President and customary law offences. Until it takes effect the colonial code still governs.
- Tax LawA 2021 harmonisation law, with VAT rising in stepsLaw No. 7 of 2021 on Harmonisation of Tax Regulations reset much of Indonesian tax law, raising VAT from 10% to 11% in 2022 with a further increase legislated, adding a top personal rate of 35%, and running a voluntary disclosure programme. Corporate tax settled at 22% after a planned further reduction was cancelled.
- Family LawMarriage law tied to religion, with Religious Courts for MuslimsThe Marriage Law of 1974 requires marriage to be conducted according to the parties' religion, which in practice makes interfaith marriage very difficult and has produced a substantial body of workaround practice. Muslim family matters go to the Religious Courts (Pengadilan Agama) applying the Compilation of Islamic Law; others go to the District Courts.
- Immigration & NationalityThe 2011 Immigration Law, now with second-home and golden visasLaw No. 6 of 2011 governs immigration. Work requires a KITAS residence permit supported by an RPTKA manpower plan approved by the Ministry of Manpower — the immigration and manpower approvals are separate and sequential. Indonesia has recently added Second Home and Golden Visa categories aimed at investors and retirees.
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