Establishment of Supplements and Cosmetics MLM Company

Posted by Irfan Disnizar on

COMPANY ESTABLISHMENT

Retail trading business group of goods by selling them includes trading activities through direct sales or special distribution systems such as single-level marketing and multi-level marketing, as well as retail trade commission agents. (ref. KBLI 47999)

The Business Sector is regulated in Government Regulation No. 29 of 2021.

The Scope of Activities is regulated in Government Regulation No. 5 of 2021, it is required that:

  • Business Entity in the form of Limited Company; and
  • Employ at least 1 Indonesian citizen as a member of the Board of Directors and 1 Indonesian citizen as a member of the Board of Commissioners.

MLM LICENSE

Business licensing requirements

  1. Business entity in the form of Limited Company
  2. Meet the criteria:
    (1) Has exclusive distribution rights for goods to be distributed through direct sales.
    (2) Have a marketing program (marketing plan);
    (3) Have a code of ethics;
    (4) Recruiting direct sellers through a network system;
    (5) Selling goods directly to consumers through a marketing network developed by direct sellers;
    (6) Employ at least 1 Indonesian citizen as a member of the board of directors and 1 Indonesian citizen as a member of the board of commissioners.

Business licensing obligations

  1. The company provides information orally and in writing to prospective direct sellers at least regarding:
    (1) Company identity;
    (2) Quality and specifications of goods;
    (3) the condition and guarantee of the goods and provide an explanation of their use, repair, and maintenance;
    (4) Marketing program (marketing plan);
    (5) Code of ethics.
  2. Companies that have recruited direct sellers must:
    (1) Provide sales aids (starter kit) to each direct seller which at least contains information on goods, marketing plan, and code of ethics;
    (2) Ensuring that the activities carried out by direct sellers are in accordance with the marketing plan and code of ethics;
    (3) Attaching a label on the goods and/or packaging containing at least the name of the company and a statement that the goods are sold using a direct selling system;
    (4) Determine the price of goods sold in rupiah currency and applies to direct sellers and consumers;
    (5) Providing commissions and/or bonuses based on the results of goods sales activities carried out by the direct seller and his network in accordance with the agreement;
    (6) Giving a grace period to the consumer to return the goods within a period of 7 (seven) working days from the receipt of the goods, if it turns out that the goods are not in accordance with the agreement;
    (7) Provide compensation, compensation, and/or compensation for losses caused by the use, use, and utilization of traded goods;
    (8) Carry out coaching and training to improve the ability and knowledge of direct sellers, so that they act correctly, honestly, and responsibly at least once in 1 (one) year;
    (9) Providing equal opportunities to all direct sellers to excel in marketing goods;
    (10) Have a list of direct sellers who are members of their marketing network which is equipped with the identity data of the said direct sellers;
    (11) Selling goods that already have a distribution permit or have complied with the provisions of quality standards in accordance with the provisions of laws and regulations;
    (12) Ensure direct sellers do not sell goods through indirect distribution channels and/or online marketplaces.
  3. The Company submits a report on the Company’s business activities to the Central Government.

CERTIFICATION OF SUPPLEMENTS AND COSMETICS

  • Registration of Supplements and Cosmetics (minister/head of the agency)
  • Distribution Permit for Supplements and Cosmetics (minister/head of the agency)
  • Approval of Supplements and Cosmetics Advertisement (minister/head of the agency)
  • Clinical Trial of Supplements and Cosmetics (minister/head of the agency)
  • Importer recommendation (minister/head of the agency)
  • Recommendation as an applicant for Notification of Supplements and Cosmetics (minister/head of the agency)
  • Supplement and Cosmetic Notification Standard Certificate (minister/head of the agency)
  • Domestic Electronic System Operator Registration Certificate (TD PSE) (minister/head of the agency)

Indonesia Queen Law Firm Annual Review of 2021

Posted by Irfan Disnizar, SH. on

2021 is an extraordinary year for Queen Law Firm.

During this year, Queen Law Firm participated in a large number of civil litigation and criminal defense, safeguarding the rights and interests of many companies and individuals. At the same time, Queen Law Firm has acted as long-term legal counsel for many multinational companies from China, Singapore, and Malaysia, ensuring the smooth development of many multinational companies’ businesses in Indonesia. In addition, in 2021, Queen Law Firm participated in the drafting of a large number of contracts, completed a large number of legal consulting work, and issued a large number of legal opinions.

Due to many factors such as strong professional knowledge, rich experience of team members, high success rate, high customer satisfaction, and many other factors, Queen Law Firm won the “2021 Indonesia Best Choice Award” and “2021 Indonesia Best Lawyer Award”, and many other awards.

In 2022, Queen Law Firm will continue to be active in all corners of the legal world, providing legal services to global companies and individuals, and making due contributions to our own capabilities.

The Difference between Authorized Capital, Issued Capital, Paid-Up Capital in Indonesian Company Law

Posted by Dr. Guan Yue on

The rapid development of Indonesia’s economy has attracted a large number of foreign investors to set up companies in Indonesia. Investors often cannot distinguish the difference between registered capital, issued capital, and paid-in capital. Queen Law Firm will explain this issue to the majority of foreign investors today.

In Indonesia’s regulations on company establishment, capital is divided into three types, namely, Authorized Capital (modal dasar), Issued Capital (modal ditempatkan), and Paid-Up Capital (modal disetor).

Authorized Capital is the entire nominal value of the company’s shares mentioned in the Articles of Association or the Deed of Establishment document. Authorized Capital in principle is the total number of shares that can be issued by the company.

Issued Capital is the number of shares that have been taken by the founders or shareholders. In other words, Issued Capital is the capital that the founders or shareholders are able to repay. So it is possible for the capital that has been written in the Deed of Establishment document indirectly and in the near future, it is agreed to be provided by the owners of capital. In other words, the company’s finances that initially had 0 or nothing would get a capital injection, but some were immediately available and some were still promised to be available.

Paid-up Capital is capital that has been entered by the shareholders as payment for shares taken from the issued capital. So, Paid-up Capital is capital that has actually been paid into the company. If the capital value has been given from the owner of the capital to the company, then the value becomes the property of the company and is recorded in the company’s books. In other words, the company gets fresh money from the owners of capital. The amount of Issued Capital that has not been paid up can be recorded as a liability/debt of the owner of the capital to the company.

Simply put, the difference between Issued Capital and Paid-up Capital is that when the owner of the capital has agreed to provide capital of IDR 500 million in the form of money or goods, the capital is referred to as Issued Capital. If the capital has not been provided, it will be considered a debt. When he has given the Rp 500 million, then the debt is considered paid off and is referred to as Paid-up Capital.

According to the “Indonesia Company Law”, the company must have issued and paid at least 25% of the registered capital when it is established. For example, for a foreign company, the registered capital is at least IDR 10 billion, so the company’s establishment contract must state that the registered capital is IDR 10 billion. According to the law, at least 25% of IDR 10 billion, or IDR 2.5 billion of issued capital, must be injected and deposited when the company is established. This amount is the minimum amount, so if you want to deposit more than IDR 2.5 billion, of course, you can.

Queen Law Firm Signed a Peace Agreement on Behalf of An Energy Group in China

Posted by Dr. Guan Yue on

After months of difficult negotiations, Queen Law Firm once again helped a Chinese client win the lawsuit in a Chinese energy group v. an Indonesian energy group, and successfully negotiated at the mediation stage. A settlement agreement was signed with the other party at the Mediation Chamber of the Central Jakarta District Court on September 30, 2021.

According to the Indonesian Civil Procedure Law, mediation must be conducted before the case enters the formal litigation stage, and the time limit for mediation is a maximum of 40 days. However, the mediator can make an appropriate extension according to the actual situation. The purpose of mediation is to resolve disputes through negotiation as much as possible and to successfully resolve civil cases at the mediation stage, so as to save limited judicial resources.

In the course of handling cases for many years, Queen Law Firm has also tried its best to negotiate with the other party during the mediation stage to strive for the best interests of the client, so that the case can achieve the greatest effect in the shortest time.

Successive victories have proved that the professional team of Queen Law Firm is capable of handling any complicated cases and high-pressure working environment, and is able to consider customers to the greatest extent. Because of this, Queen Law Firm has accumulated numerous client groups from various countries around the world over the years and has become an influential presence in the industry.

Queen Law Firm Wins Case Again

Posted by Irfan Disnizar, SH. on

In a land dispute case that was pronounced at the Cianjur District Court on September 29, 2021, although the opponent was a team of well-known lawyers in the field of law, Queen Law Firm still fulfilled its mission and spared no effort to protect the interests of its clients, and as always achieved the final victory.

Winning cases continuously is the best gift Queen Law Firm can give to its clients.

Queen Law Firm Won the “Indonesian Best Choice Award 2021”

Posted by Dr. Guan Yue on

Congratulations to Eni Oktaviani and Guan Yue, the Managing Partners of Queen Law Firm, for winning the “Best Choice In Lawyer Award” at the “Indonesian Best Choice Award 2021” ceremony held at the Holiday Inn Kemayoran Hotel in Jakarta on the evening of September 24, 2021. This signifies that Queen Law Firm’s unremitting efforts have been recognized by the Indonesian government and the field of law.

This awards party gathered elites from all walks of life in Indonesia. Many companies and individuals in multiple industries, including Internet companies, the beauty industry, banks, foundations, the legal profession, and real estate, compete for the few awards. Queen Law Firm lived up to expectations and won the “Best Choice In Lawyer Award”.

After years of development, Queen Law Firm has become a rising star in the Indonesian legal community. With a professional team, superb knowledge, rich experience, and strong channels, Queen Law Firm have solved countless cases from companies and individuals from all over the world, successfully safeguarding the interests of clients and the dignity of the law.

Therefore, it is the hard work of all members of Queen Law Firm and the support of all customers around the world that have achieved this honor. In the future, Queen Law Firm will continue to work hard to create more brilliance with all the people who support and encourage Queen Law Firm.

Guan Yue Accepts an Exclusive Interview with the Japan Daily News

Posted by Dr. Guan Yue on

On August 21, 2021, Guan Yue from Queen Law Firm accepted an interview with reporter Epo A Ishiyama from Japan Daily News about the Indonesian criminal virtual court.

The virtual court is a measure taken by the Supreme Court of Indonesia in response to the growing COVID-19 pandemic in Indonesia. Guan Yue pointed out that the virtual courts in Indonesia currently only target criminal cases. The difference from an ordinary trial is that the defendant does not need to go to court to participate in the trial in person. Instead, the defendant participates in the trial through a TV screen in a specially arranged room in the prison. Other personnel, including judges, prosecutors, lawyers, witnesses, etc., must still be present in court in person.

During the COVID-19 epidemic, the virtual court can ensure that the defendant does not bring the virus from outside the prison into the prison, and it can also ensure that the trial of the case will not be interrupted due to the epidemic. Because, according to the Indonesian Criminal Procedure Law, the defendant cannot be more than 400 days in custody until the final judgment. If the final judgment is not made after the deadline, the defendant must be released.

Of course, Guan Yue also pointed out that virtual courts will reduce the quality of defense. Bypassing, the judge cannot really feel the defendant’s remorse, which will also affect the final judgment. Because the judgments made in trials conducted through ordinary courts are often lighter than those made in trials conducted through virtual courts. Moreover, due to network reasons, it will be difficult for the defendant to communicate with the parties to the trial, especially for foreign defendants. At the same time, with regard to the execution of a death sentence through a virtual court, Guan Yue believes that this is not a humane practice.

There are two sides to everything. Guan Yue believes that during the epidemic, for the safety of most people, it is indeed a better way to use virtual courts to try criminal cases.

Queen Law Firm Distributes Daily Needs To The Community In Pandemic

Posted by Dr. Guan Yue on

The COVID-19 epidemic has been going on for more than one year, and Indonesia’s anti-epidemic situation has become increasingly severe. Starting on July 3, the Indonesian government has adopted Enforcement of Emergency Community Activity Restrictions (PPKM). More and more people have lost their source of livelihood because they can’t carry out normal activities so that they can’t guarantee the most basic life needs.

To this end, Queen Law Firm adheres to the concept of “take it from the people and use it for the people”, and prepares daily necessities for a certain number of people to alleviate their urgent needs.

Queen Law Firm hopes to help people in need to tide over the difficulties through this event.

Land Dispute Problems, Prevention and Resolution

Posted by Irfan Disnizar, SH. on

There are many cases of land disputes that have entered Queen Law Firm, with different characteristics of cases, although many cases are similar but not the same, here are some of the problems we often encounter:

  1. Lack of orderly land administration in Indonesia, what we often encounter is that one land has multiple certificates with different owners;
  2. There are several Notaries, Land Deed Making Officials (PPAT) / Temporary Land Deed Making Officials (PPATS) / Subdistrict Head, less careful in carrying out their duties, in some cases Notaries, Land Deed Making Officials (PPAT) / Temporary Land Deed Making Officials (PPATS) / Subdistrict Head, in making a deed of sale and purchase of a land object they do not first check the status of Land at the National Land Agency so that in some cases when buying and selling has occurred and will register the transfer of land rights to the National Land Agency, the rights cannot be transferred because the land is in a state of dispute;
  3. There are erroneous land data, both in terms of area, boundaries, and overlapping rights with one another;
  4. The problem of inheritance land ownership between individuals, both in the distribution of land rights and the sale of land rights whose certificates have not been broken;
  5. The laws and regulations overlap each other, both horizontally and vertically, as well as the substances regulated;
  6. Limited human resources tasked with resolving land disputes either in the District Court or the State Administrative Court, so that a Land Dispute case can take years, even though the government has regulated in Article 4 Paragraph (2) of the Law of the Supreme Court of the Republic of Indonesia stipulates that justice is carried out quickly, simply and at low cost, but in reality, it has not been realized;
  7. The existence of settlements from other agencies, resulting in overlapping authorities, for example in remote areas where land disputes have not yet developed are resolved by customary heads, tribal chiefs, village heads, or clan heads.

In order to avoid the above-disputed issues in terms of buying and selling land, everyone should pay attention to the following:

  1. Looking for the origin of the land, which is usually found in the Kelurahan/Village called Letter C Desa which contains the previous to the latest land ownership;
  2. Checking the certificate of ownership of land rights to the National Land Agency (BPN), to check who the owner is, whether there is a mortgage that is imposed, or to check whether the certificate is still in a state of dispute or not;
  3. Make a Deed of Sale and Purchase at a Notary, Land Deed Making Officer (PPAT) / Temporary Land Deed Making Officer (PPATS) / Subdistrict Head who are competent and responsible in carrying out their duties.

However, if this land dispute has occurred, the settlement of land disputes can be done through the District Court, it can also be through the State Administrative Court, and it is not uncommon for land dispute resolution to penetrate into the criminal law area because the dispute contains elements criminal.

 

 

 

 

Regarding the Establishment of A Representative Office of A Foreign Company in Indonesia

Posted by Dr. Guan Yue on

With the rapid development of the Indonesian economy, more and more overseas companies plan to enter the Indonesian market. However, many companies are hesitant to set up a branch or representative office in Indonesia. Here, I will focus on the relevant situation of the representative office.

Restrictions on Representative Office

Indonesian laws and regulations allow foreign companies to open representative offices in Indonesia. However, allowing the establishment does not mean that there are no restrictions. In addition to being unable to freely conduct commercial operations, foreign company representative offices also have many other restrictions. According to the guidelines and procedures for permits and investment facilities in Article 37 of Regulation No. 13 of 2017 of the Indonesian Investment Coordination Board, the establishment of a representative office of a foreign company in Indonesia has at least five restrictions:

  1. A representative office of a foreign company can only act as a supervisor, liaison, and coordinator and handle issues related to the parent company’s interests or its affiliates.
  2. A representative office is limited only to prepare for establishing and developing a foreign investment company business in Indonesia or other countries and Indonesia.
  3. Regarding the office location of a representative office of a foreign company. The Indonesian Investment Coordinating Commission Regulation No. 13 of 2017, Article 37(1) Subparagraph c stipulates that the office of foreign company representative offices is limited to office buildings located in provincial capital cities. In other words, representative offices of foreign companies are not allowed to be established in non-provincial capital cities. At the same time, you cannot use a virtual office address like a limited company.
  4. The representative office of a foreign company is prohibited from seeking income from Indonesia. The Indonesian Investment Coordinating Board Regulation No. 13 of 2017 Article 37(1) Subparagraph d stipulates: (the activities of foreign company representative offices are restricted) shall not seek income from Indonesia, including agreements/transactions that are not allowed to carry out activities or buy or sell goods or services with companies or individuals in Indonesia.
  5. Applicable to the handling of the relationship between a representative office of a foreign company and a subsidiary or branch. The Indonesian Investment Coordinating Commission Regulation No. 13 of 2017 Article 37(1) Subparagraph e stipulates: Foreign company representative offices shall not participate in the management of companies, subsidiaries, or branches in Indonesia in any form.

Obligations of A Representative Office of A Foreign Company

In addition to the above restrictions, the regulations also stipulate certain obligations for the representative office as an organization and the head and employees as individuals. For example, before operating, a representative office must obtain a representative office license from the Indonesian government. This is stipulated in Article 37(2) of Indonesian Investment Coordinating Board Regulation No. 13 of 2017.

The maximum period of validity of a representative office permit is three years unless the letter of an appointment indicates that it is less than three years, and it can be extended by the period of validity specified in the letter of appointment. The representative office must apply for an extension of the representative office license at least 30 days before the license expires.

Finally, there is the obligation of the person in charge of the representative office. The person in charge must live in Indonesia and take full responsibility for the normal operation of the representative office. The person in charge shall not engage in activities other than the related activities of the representative office, and shall not concurrently hold the position of the person in charge of the representative office of other companies and/or representative offices. If the person in charge of the representative office is a foreign citizen and/or has foreign employees, then according to Indonesian laws and regulations, the representative office must also employ Indonesian employees.