Indonesia Implements New Criminal Procedure Code to Enhance Investment Certainty

Key Provisions and Business Impact

Indonesia has taken a significant step towards improving its legal framework with the enactment of a new Criminal Procedure Code (KUHAP) in December 2025. The Indonesian Employers' Association (Apindo) is closely monitoring the implementation of this new law, particularly its impact on corporate entities and investment certainty.

Restorative Justice and Deferred Prosecution

The new KUHAP introduces two major innovations: restorative justice mechanisms and deferred prosecution agreements. These provisions represent a shift towards more flexible and business-friendly legal practices. Apindo Chairman Shinta W. Kamdani emphasized that these changes are crucial for creating a more favorable business environment.

Implications for Corporate Sector

The introduction of restorative justice principles is expected to reduce the legal burden on corporations by providing alternative dispute resolution mechanisms. Meanwhile, deferred prosecution agreements will allow companies to rectify wrongdoing without facing immediate prosecution, potentially encouraging compliance and self-reporting.

Government's Perspective

The government's decision to update the legal framework demonstrates its commitment to strengthening law enforcement effectiveness while creating a more business-friendly environment. This move is part of broader efforts to enhance Indonesia's investment attractiveness and economic competitiveness.

Business Community's Response

Apindo is actively monitoring the implementation of the new KUHAP, particularly how its provisions will be applied in practice. The business community is cautiously optimistic that these changes will lead to greater legal certainty and reduced regulatory risks. The association is working closely with government agencies to ensure that the new law achieves its intended objectives while protecting business interests.