Indonesia's new Criminal Code (KUHP Nasional) took effect on 2 January 2026, closing a three-year transition period that gave businesses, law enforcement, and the courts time to prepare. For a code that replaces legislation inherited from the Dutch colonial era, the practical changes are more incremental than revolutionary — but several provisions deserve close attention from businesses operating in Indonesia.
The most immediately relevant change for corporate clients is the codification of corporate criminal liability. Where prosecution of companies previously relied on scattered provisions across sectoral laws, the new Code provides a general framework for holding corporations criminally liable for acts committed by their management or on their instruction, with penalties including fines calculated as a category-based multiplier rather than a fixed sum.
Employment-adjacent provisions have also drawn attention, including expanded provisions on workplace-related offenses and updated fine structures across the board — fines under the new Code are set in "categories" (I through VIII) rather than fixed rupiah figures, a structure intended to keep penalties proportionate over time without requiring legislative amendment for every adjustment.
For businesses, the practical takeaway is an internal compliance review: management should confirm that internal policies, whistleblowing channels, and incident-response procedures reflect the new corporate liability framework, rather than assuming continuity with prior practice. We are advising clients on a case-by-case basis on where exposure has meaningfully shifted.
