INDONESIA

Updated on 02/10/2025

I. Economic data

A. Macro-economic data

• General data [1]

-Population 2021: 273,753,191 inhabitants
-Area: 1,919,443 km2
-Density: 129 inhabitants/km2
-GDP (nominal) 2022: $1,319 bn[2]
-GDP/capital 2022: $4,788[3]
-GDP (PPP) 2022: $4,038 bn[4]
-GDP (PPP)/capita 2022: $14,657.8[5]
-2022 growth rate: 5.3%[6]
-GNI/capita (PPP) 2021: $12,680
-HDI 2021: 0.705
-Literacy rate: 96%[7]
-Life expectancy 2021: 72.5 years

Policy [8]

Indonesia is a presidential republic. At the time of writing, the President of the Republic of Indonesia is Joko Widodo (since 2014). Presidential elections were held on February 14, 2024, and Prabowo Subianto, former Minister of Defense during Joko Widodo's presidency, won. He will take over from Joko Widodo in October 2024[9].

Joko Widodo had based his political program on opening up Indonesia's economy, building infrastructure within the archipelago and fighting terrorism. Prabowo Subianto has declared his intention to continue Joko Widodo's policies.

In terms of international policy, Indonesia is a founding member of ASEAN (Association of Southeast Asian Nations) and took over its presidency in 2023.

In 2022, Indonesia had the presidency of the G20.

Indonesia holds the presidency of the Asia-Pacific group (ASPAC) at UNESCO[10] for 2024.

Economic development [11]

A member of the G20 and foremost of the ASEAN economies, Indonesia had a positive long-term growth rate, averaging +5.3% between the 1997 Asian crisis and the Covid-19 health crisis.

However, the Covid-19 pandemic pushed Indonesia into recession, with a contraction of -2.1% in 2020. However, Indonesia has managed to recover its growth rate, with a rise of +3.7% in 2021[12].

The middle class has grown in Indonesia, with an average increase of 10% per year.

Indonesia's public debt was 503.3 billion euros in 2022, representing 40.14% of GDP[13].

In 2021, the unemployment rate was 4.4%[14]. The inflation rate for February 2024 was 0.37%[15].

Resources

Indonesia's main resources are agricultural (palm oil), hydrocarbon (oil and natural gas) and mineral (coal, rubber, silver, gold, bauxite, tin, copper, nickel). In this respect, Indonesia has the world's largest nickel reserves, with 21 million tonnes on its territory[16].

Agriculture accounts for 13.3% of GDP and employs 27.7% of the working population, mining and industry for 39.9% of GDP and employing 22.7% of the working population, and the service sector accounts for 46.8% of GDP with 49.6% of the working population[17].

Foreign investment

Foreign direct investment fell in Indonesia between 2019 and 2021. This decline is due in particular to lower investment in the manufacturing industry caused by the Covid-19 health crisis. Foreign investment from Japan and Singapore has also fallen.

In 2022, foreign direct investment was around $21 billion.

The main investors in Indonesia are Singapore, Thailand, Japan, the UK, China and the USA.

Population

Indonesia is the world's 4th most populous country[18]. 55% of the Indonesian population is urban[19].

23% of the population is under 15, 71% is between 15 and 65 and only 6% is over 65[20].

Indonesia's ten most populous cities are Jakarta (pop. 9.8 million), Medan (pop. 4.2 million), Surabaya (pop. 3.12 million), Bandung (pop. 2.6 million), Bekasi (pop. 2,1 million inhabitants), Tangerang (2 million inhabitants), Depok (1.8 million inhabitants), Palembang (1.8 million inhabitants), Makassar (1.4 million inhabitants) and Semarang (1.3 million inhabitants)[21] .

[1] Unless otherwise stated, the general data comes from the l’Atlas socio-économique des pays du monde, Larousse, édition 2024
[2] Source : Banque Mondiale
[3] Source : Banque Mondiale
[4] Source : Banque Mondiale
[5] Source : Banque Mondiale
[6] Source : Banque Mondiale
[7] Source : Banque Mondiale
[8] Unless otherwise indicated, the information below comes from Source: Diplomatie.Gov.
[9] Source : La Nouvelle République
[10] Source : Kemlu

[11] Sauf indication contraire, les informations ci-dessous proviennent de Diplomatie.gov
[12] Source : Banque Mondiale
[13] Source : Country Economy
[14] Atlas socio-économique des pays du monde, Larousse, édition 2024
[15] Source : Statistics Table
[16] Source : Asialist
[17] Atlas socio-économique des pays du monde, Larousse, édition 2024
[18]Source : Diplomatie.gov
[19] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[20] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[21] Source : Escalade de nuit

B. Economic data specific to franchising

Historical background

The franchising sector took off in the 1980s in Indonesia, particularly with the arrival of American franchises in the country[23].

Trade shows

The Indonesian Franchise Association is organizing the 23nd International Franchise, Licensing and Business Concept Exhibition. The show will take place from April 25 to 27 at the Indonesia Convention Exhibition and from August 29 to 31, 2025 at the Jakarta Convention Center[26].

The Jakarta International Expo (Jiexpo)[27] will also host the Franchising and Licensing Exhibition from May 16 to 18, 2024 [27].

International

International franchises operating in Indonesia are mainly established in the food and beverage (63%), informal education (14.52%) and retail (13.7%) sectors[34].

Statistics

South Africa has around 800 franchise systems, spanning 14 sectors [23]. In 2018, there were 45,011 outlets in South Africa. 84% of franchisees rate their relationship with the franchisor as very good or good [24].

South Africa is now home to 68,000 franchisees [25]. 40% of them are based in the Gauteng province [26].

The biggest sector in the franchise business is fast food. South Africa has around 85,000 restaurants and over 850 franchises. The international food market is estimated to be worth $4.9 billion by 2026 [27].

In 2022, South Africa had 1,907 businesses and companies in a state of bankruptcy [28].

Institution

Indonesia has set up the Indonesian Franchise Association[24], founded on November 22, 1991[25].

Contract content

The cost of a franchise varies from one business sector to another. For example, for the Kumon

Method Learning franchise, the initial investment is between $7,000 and $14,000[31]. For a franchise such as La Mie Câline, the initial investment is $87,355.20[32].

Economic impact

The 5 top-performing foodservice franchises listed above generated sales of $1.2 billion in 2022[33].

Statistics [28]

National franchises are particularly well-established in the following sectors: food and beverages (58.37%), informal education (education outside the traditional school learning system) (13.40%) and retail (15.31%)[29].

In July 2023, Indonesia had 135 franchisors, both domestic and international, registered with the Ministry of Commerce, representing a 5% increase on 2022.

The 5 best-performing franchises in the food sector, in terms of sales, are McDonald's ($409.8 million), KFC ($408.2 million), Pizza hut ($247.2 million), Starbucks ($154.9 million) and Burger King ($59.9 million).

Between 2012 and 2023, a further 650 franchises were established in Indonesia. Of these 650 franchises, 130 were of Indonesian origin and 520 were foreign.

In 2019, Indonesia counted more than 24,000 franchise units, an increase of 14.75% on 2018[30].

[23] https://www.trade.gov/market-intelligence/indonesia-franchising
[24] Jl. Darmawangsa X No. A 19, Kebayoran Baru, Jakarta Selatan 12150, tél : (6221) 7395577, adresse e-mail : sukandar@indo.net.id
[25] https://www.franchiseindonesia.or.id/about-us
[26] https://ifra-indonesia.com/
[27] https://franchise-expo.co.id/

[29] Source : Trade.Gov
[30] Source : Zipdo
[31] Source : Top Franchise
[32] Source : Franchise Direct
[33] Source : Trade.gov
[34] Source : Trade.gov

II. Legal information

A. Legal information directly related to the franchising

Applicable legislation

Indonesia has specific regulations governing franchising, namely Government Regulation No. 42/2007 and the Regulation on the Establishment of Franchises[35].

According to Section 1 of regulation n°42/2007, franchising is defined as a special right, held by a natural or legal person, concerning a commercial system for marketing goods and/or services which have been proven to be successful and which are usable and/or applicable by other parties on the basis of a franchise agreement.

The franchisor is a natural or legal person who grants a franchisee the right to use his franchise (Section 1, paragraph 2). The franchisee is a natural or legal person who is granted the right to use a franchise held by a franchisor (Section 1, paragraph 2).

Section 4 of the aforementioned regulation specifies that franchise agreements must be drawn up in English and translated into Indonesian.

In addition, franchise agreements must at the very least contain clauses relating to the following information:

- the names and addresses of the parties;
- the type of intellectual property right concerned;
- the business activity concerned;
- the rights and obligations of the parties;
- assistance, installations, operational advice, training and marketing provided by the franchisor to the franchisee;
- the business sector;
- contract duration;
- the compensation payment procedure;
- ownership, any changes in ownership and the rights of successors;
- dispute resolution;
- contract renewal, interruption and termination procedures.

Pre-contractual information

Regulation no. 42/2007 requires franchisors to provide prospective franchisees with pre-contractual information, known as a "franchise offer prospectus", at least two weeks before signing the franchise agreement.

According to Section 7 of the Regulation, the franchisor must provide the following information:

- the identity of the franchisor ;
- proof of the legality of the franchise agreement;
- the history of the franchisor's commercial activity;
- the organizational structure of the franchise;
- Financial statements for the last two years of the franchise in question;
- number of commercial establishments ;
- list of franchisees;
- the rights and obligations of the parties.

In addition, the franchisor is obliged to register the franchise offer prospectus with the Minister of Commerce, before entering into the franchise agreement, in order to obtain a franchise registration certificate. The Regulation on the Establishment of Franchises no longer limits the duration of this certificate to 5 years.

Contract perfomance

The franchise agreement must be registered with the Minister of Commerce and must also obtain a franchise registration certificate (Section 11 of regulation no. 42/2007). Here again, under the regulation on the establishment of franchises, the duration of the franchise registration certificate is no longer limited to 5 years.

Throughout the term of the franchise agreement, the franchisor must support the franchisee with training and management advice (Section 8 of regulation no. 42/2007).

The parties must give priority to the use of domestic products if they meet the quality standards for goods and/or services specified in the franchise agreement.

Trademarks

Trademark law is governed by the Trademarks and Geographical Indications Act[37].

The law on trademarks and geographical indications distinguishes between service trademarks and collective trademarks.

Thus, service trademarks mean any trademark used for services marketed by a natural or legal person in order to distinguish said services from other similar services. Collective trademarks, on the other hand, mean any trademark used for goods and/or services with similar characteristics concerning the nature, general features, quality of the goods or services, as well as control, which will be marketed by several persons, in order to distinguish them from other similar goods and/or services (Section 1, paragraphs 2 and 3 of the Trademarks and Geographical Indications Act).

To obtain trademark protection, an application must be filed with the Directorate General of Intellectual Property (DGIP)[38] .

Once registered, the trademark is protected for 10 years from the date of filing. Protection can be renewed for a further 10 years (Section 35 of the Trademarks and Geographical Indications Act).

In addition, Indonesia ratified the Madrid Protocol on January 2, 2018, enabling companies to obtain trademark protection, in up to 130 countries, by filing a single international application, in a single language, with the World Intellectual Property Organization (WIPO). Under Article 6 of the Madrid Agreement, a trademark registration is valid for 20 years.

To go further

In Indonesia, trademark applications can be national or international. The TMO accepts both multiclass and single class applications. Each application undergoes an examination process during which notifications may be issued. A registered trademark must be used within three consecutive years from its registration date or last use to avoid cancellation. For developing a franchise, it is advisable to cover "Business assistance relating to franchising" and retail services that are accepted in class 35 by the trademark office. Recording a franchising agreement is compulsory for the franchisee. The franchisor must register an offering prospectus. The agreement, filed with the Ministry of Trade (MoT), must meet specific content requirements. Upon approval, a Franchise License (STPW) is issued. Failure to register can lead to administrative sanctions, including fines, though there is no deadline for registering a franchise agreement.

Jurisdiction and applicable law

India has ratified the 1958 New York Convention[40] facilitating the recognition and enforcement of foreign arbitral awards.

[35] Regulation No. 71/2019
[36] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958
[37] Law No. 20/2016

[38] Kementerian Hukum & Hak Asasi ManusiaJl. HR. Rasuna Said Kav. 8-9,Jakarta Selatan, Jakarta, Indonesia, adresse e-mail : halodjki@dgip.go.id

Competition law

Franchise agreements must comply with Indonesian competition law, which is governed by the Prohibition of Monopolistic Practices and Unfair Competition Act[39].

Section 2 of this law establishes the principle that economic players in Indonesia must conduct their businesses on the basis of the principles of economic freedom, respecting the balance between the interests of economic players and the public interest.

Section 4 of the Prohibition of Monopolistic Practices and Unfair Competition Act prohibits economic players from entering into agreements with other economic players with the aim of jointly controlling the production, or marketing, of goods or services likely to give rise to monopolistic practices or unfair competition.

It is forbidden to enter into agreements to fix the price of certain goods and/or services. More specifically, competitors may not enter into agreements to set prices below market levels, which could lead to unfair competition (Sections 5 and 7 of the Prohibition of Monopolistic Practices and Unfair Competition Act).

Furthermore, economic players may not enter into agreements with a view to dividing up the market for goods and services (Section 9 of the Prohibition of Monopolistic Practices and Unfair Competition Act).

With regard to vertical agreements, the said law specifies that economic players may not enter into agreements with each other with the aim of controlling the production of several goods which are products included in the production chain of certain related goods and/or services (Section 14 of the Prohibition of Monopolistic Practices and Unfair Competition Act).

Indonesia has set up a competent authority tasked with enforcing competition law in Indonesia. This is the Commission for the Supervision of Commercial Competition[40].

Personal data

Personal data law is governed by the Personal Data Protection Act[41] , which came into force in 2022.

This law defines personal data as any information relating to an identified or identifiable natural person, whether through an electronic or non-electronic system (Section 1, Paragraph 1).

Under the Personal Data Protection Act, the data subject has the right to be informed about the processing of their data (identity of the person processing their data, purpose of the processing, etc.), the right to request rectification of their data if necessary, the right to access their personal data held by the data controller, the right to data portability enabling data subjects to obtain and re-use their data for their purposes in different services.

Section 16, paragraph 2 of the Personal Data Protection Act specifies that the data controller must only collect personal data that is strictly necessary for the intended purpose.

The data controller may process the data subject's personal data if it obtains the data subject's lawful consent. However, the consent of the data subject will not be required if the processing is necessary:

- for the performance of a contract to which the data subject is a party;
- to comply with the data controller's legal obligations;
- to protect the vital interests of the data subject;
- to carry out a mission of public interest;
- to achieve other legitimate interests of the controller, taking into account the purposes, needs and balance between the interests of the controller and the rights of the data subject.

At the time of writing, there is no competent authority tasked with enforcing the law on personal data protection.

Special provisions for foreign investments

Foreign investment law is governed by the Investment Act[42] and law n°6/2023.

Section 1, paragraph 1 of the Investment Act defines foreign investment as any investment for the management of a business in the territory of the Republic of Indonesia, made by a foreign investor using either only foreign capital, or foreign and domestic capital.

Section 6 of the Investment Act states that the Indonesian state grants equal treatment to all investors, whether national or foreign, who invest in Indonesia in accordance with the rule of law.

Law n°6/2023 aims to enhance Indonesia's competitiveness, particularly by reducing company taxes. As a result, taxes on foreign companies have been reduced from 20% to 17% for companies listed in Indonesia[43].

Main websites

Indonesian Franchise Association: https://www.franchiseindonesia.or.id/;
Competition: https://eng.kppu.go.id/;
intellectual property: https://www.dgip.go.id/;
Statistics Office: https://www.bps.go.id/id;
World Bank data: https://donnees.banquemondiale.org/.

B. Peripheral legal data

[39] Law n°5/1999
[40] Jl. Ir. H. Juanda No. 36 Jakarta Pusat Indonesia / 10120, tél : (+62-21)-3507008, adresse e-mail : international@kppu.go.id
[41] Law n°27/2022
[42] Law n°25/2007
[43] https://asianinsiders.com/2023/05/16/indonesias-omnibus-law-attracting-foreign-investment/

I. Economic data
A. Macro-economic data
- General data[1]

Population 2021: 273,753,191 inhabitants
Area: 1,919,443 km2
Density: 129 inhabitants/km2
GDP (nominal) 2022: $1,319 bn[2]
GDP/capita 2022: $4,788[3]
GDP (PPP) 2022: $4,038 bn[4]
GDP (PPP)/capita 2022: $14,657.8[5]
2022 growth rate: 5.3%[6]
GNI/capita (PPP) 2021: $12,680
HDI 2021: 0.705
Literacy rate: 96%[7]
Life expectancy 2021: 72.5 years

- Policy[8]

Indonesia is a presidential republic. At the time of writing, the President of the Republic of Indonesia is Joko Widodo (since 2014). Presidential elections were held on February 14, 2024, and Prabowo Subianto, former Minister of Defense during Joko Widodo's presidency, won. He will take over from Joko Widodo in October 2024[9].

Joko Widodo had based his political program on opening up Indonesia's economy, building infrastructure within the archipelago and fighting terrorism. Prabowo Subianto has declared his intention to continue Joko Widodo's policies.

In terms of international policy, Indonesia is a founding member of ASEAN (Association of Southeast Asian Nations) and took over its presidency in 2023.

In 2022, Indonesia had the presidency of the G20.
Indonesia holds the presidency of the Asia-Pacific group (ASPAC) at UNESCO[10] for 2024.
- Economic development[11].

A member of the G20 and foremost of the ASEAN economies, Indonesia had a positive long-term growth rate, averaging +5.3% between the 1997 Asian crisis and the Covid-19 health crisis.

However, the Covid-19 pandemic pushed Indonesia into recession, with a contraction of -2.1% in 2020. However, Indonesia has managed to recover its growth rate, with a rise of +3.7% in 2021[12].

The middle class has grown in Indonesia, with an average increase of 10% per year.

Indonesia's public debt was 503.3 billion euros in 2022, representing 40.14% of GDP[13].

In 2021, the unemployment rate was 4.4%[14]. The inflation rate for February 2024 was 0.37%[15].

- Resources

Indonesia's main resources are agricultural (palm oil), hydrocarbon (oil and natural gas) and mineral (coal, rubber, silver, gold, bauxite, tin, copper, nickel). In this respect, Indonesia has the world's largest nickel reserves, with 21 million tonnes on its territory[16].

Agriculture accounts for 13.3% of GDP and employs 27.7% of the working population, mining and industry for 39.9% of GDP and employing 22.7% of the working population, and the service sector accounts for 46.8% of GDP with 49.6% of the working population[17].

- Population

Indonesia is the world's 4th most populous country[18]. 55% of the Indonesian population is urban[19].

23% of the population is under 15, 71% is between 15 and 65 and only 6% is over 65[20].

Indonesia's ten most populous cities are Jakarta (pop. 9.8 million), Medan (pop. 4.2 million), Surabaya (pop. 3.12 million), Bandung (pop. 2.6 million), Bekasi (pop. 2,1 million inhabitants), Tangerang (2 million inhabitants), Depok (1.8 million inhabitants), Palembang (1.8 million inhabitants), Makassar (1.4 million inhabitants) and Semarang (1.3 million inhabitants)[21] .

- Foreign investment[22]

Foreign direct investment fell in Indonesia between 2019 and 2021. This decline is due in particular to lower investment in the manufacturing industry caused by the Covid-19 health crisis. Foreign investment from Japan and Singapore has also fallen.

In 2022, foreign direct investment was around $21 billion.

The main investors in Indonesia are Singapore, Thailand, Japan, the UK, China and the USA.

B. Economic data specific to franchising

- Historical background

The franchising sector took off in the 1980s in Indonesia, particularly with the arrival of American franchises in the country[23].

- Institution

Indonesia has set up the Indonesian Franchise Association[24], founded on November 22, 1991[25].

- Trade shows

The Indonesian Franchise Association is organizing the 23nd International Franchise, Licensing and Business Concept Exhibition. The show will take place from April 25 to 27 at the Indonesia Convention Exhibition and from August 29 to 31, 2025 at the Jakarta Convention Center[26].

The Jakarta International Expo (Jiexpo)[27] will also host the Franchising and Licensing Exhibition from May 16 to 18, 2024 [28].

- Statistics[29]

National franchises are particularly well-established in the following sectors: food and beverages (58.37%), informal education (education outside the traditional school learning system) (13.40%) and retail (15.31%)[30].

In July 2023, Indonesia had 135 franchisors, both domestic and international, registered with the Ministry of Commerce, representing a 5% increase on 2022.
The 5 best-performing franchises in the food sector, in terms of sales, are McDonald's ($409.8 million), KFC ($408.2 million), Pizza hut ($247.2 million), Starbucks ($154.9 million) and Burger King ($59.9 million).

Between 2012 and 2023, a further 650 franchises were established in Indonesia. Of these 650 franchises, 130 were of Indonesian origin and 520 were foreign.
In 2019, Indonesia counted more than 24,000 franchise units, an increase of 14.75% on 2018[23].
- Contract content
The cost of a franchise varies from one business sector to another. For example, for the Kumon Method Learning franchise, the initial investment is between $7,000 and $14,000[24]. For a franchise such as La Mie Câline, the initial investment is $87,355.20[25].
- Economic impact
The 5 top-performing foodservice franchises listed above generated sales of $1.2 billion in 2022[26].
- International
International franchises operating in Indonesia are mainly established in the food and beverage (63%), informal education (14.52%) and retail (13.7%) sectors[27].

[1] Unless otherwise stated, the information below is taken from https://www.diplomatie.gouv.fr/fr/dossiers-pays/indonesie/presentation-de-l-indonesie/#:~:text=Politik%20int%C3%A9rieure&text=Malgr%C3%A9%20l'influence%20croissante%20d,de%20la%20jeune%20d%C3%A9mocratie%20indon%C3%A9sienne.
[2] https://www.lanouvellerepublique.fr/france-monde/l-indonesie-vote-pour-designer-le-successeur-du-president-widodo
[3] https://www.kemlu.go.id/paris/lc/news/28064/lindonsie-deviendra-prsidente-du-groupe-asie-pacifique-lunesco-en-2024
[4] Unless otherwise stated, the information below is taken from https://www.diplomatie.gouv.fr/fr/dossiers-pays/indonesie/presentation-de-l-indonesie/#:~:text=Politik%20int%C3%A9rieure&text=Malgr%C3%A9%20l'influence%20croissante%20d,de%20la%20jeune%20d%C3%A9mocratie%20indon%C3%A9sienne.
[5] https://donnees.banquemondiale.org/indicator/NY.GDP.MKTP.KD.ZG?locations=ID
[6] https://fr.countryeconomy.com/gouvernement/dette/indonesie
[7] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[8] https://www.bps.go.id/en/statistics-table/2/MjI0NiMy/inflation--february2024.html
[9] https://asialyst.com/fr/2024/02/14/indonesie-nickel-chine/
[10] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[11] https://www.diplomatie.gouv.fr/fr/dossiers-pays/indonesie/presentation-de-l-indonesie/#:~:text=Politics%20int%C3%A9over&text=Malgr%C3%A9%20the%20increasing%20d,influence%20of%20the%20young%20d%C3%A9mocracy%20indon%C3%A9sian.
[12] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[13] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[14] https://escaledenuit.com/les-plus-grandes-villes-d-indonesie/
[15] https://www.btrade.ma/fr/observer-les-pays/indonesie/investir?url_de_la_page=%2Ffr%2Fobserver-les-pays%2Findonesie%2Fpresentation&
[16] https://www.trade.gov/market-intelligence/indonesia-franchising
[17] Jl. Darmawangsa X No. A 19, Kebayoran Baru, Jakarta Selatan 12150, tel.: (6221) 7395577, e-mail address: sukandar@indo.net.id
[18] https://www.franchiseindonesia.or.id/about-us
[19] https://ifra-indonesia.com/
[20] https://franchise-expo.co.id/
[21] Unless otherwise stated, the information below is taken from https://www.trade.gov/country-commercial-guides/indonesia-franchising
[22] https://www.trade.gov/market-intelligence/indonesia-franchising
[23] https://zipdo.co/statistics/franchising/
[24] https://topfranchise.com/articles/top-9-education-franchises-in-indonesia/
[25] https://www.franchisedirecte.fr/franchisesinternational/indonesie/98/
[26] https://www.trade.gov/country-commercial-guides/indonesia-franchising
[27] https://www.trade.gov/market-intelligence/indonesia-franchising

B. Peripheral legal data

- Competition law

Turkish competition law is governed by the Protection of Competition Act[43].

The law on the protection of competition prohibits restrictive practices which have the aim or effect of restricting competition on the market for the goods and services concerned.

With regard to contracts, Section 4 of the aforementioned law prohibits:

- product price fixing;
- compartmentalizing of goods or services markets and the sharing or control of all types of resources or market elements;
- controlling the volume of supply or demand for goods or services;
- applying different conditions to people of the same standing for equal rights, obligations and acts (except in the case of exclusivity agreements);
- linking the sale of a good or service to the purchase of another good or service.

The Turkish Competition Authority has issued a statement on the exemptions applying to vertical agreements[44]. Exempted from the prohibition laid down in the aforementioned Section 4 are agreements entered into by two or more undertakings, operating at different levels of the production or distribution chain, with a view to the purchase, sale or resale of particular goods or services, if they meet the following conditions:

- the supplier must not hold more than 30% of the market share in the market in which it supplies the goods and/or services covered by the contract;
- in the case of an exclusive supply contract, the buyer's market share may not exceed 30% when purchasing the goods and/or services covered by the contract;
- vertical agreements enabling the transfer of intellectual property rights will be exempt provided that the intellectual property rights directly concern the use, sale or resale, by the purchaser or the purchaser's customer, of the goods and services constituting the subject matter of the contract, and that the said transfer of intellectual property rights is not the main subject matter of the contract;
- in all cases, to qualifyfor exemption, agreements may not contain provisions imposing the sale price on the purchaser, prohibiting passive sales, or specifying a non-competition obligation for an indefinite period, or exceeding five years.

- Personal data

The Personal Data Protection Act[45] regulates the use and processing of personal data in Türkiye.

Section 3 of the Personal Data Protection Act defines personal data as all identifying or identifiable information relating to a natural person.

Personal data must be processed in good faith and updated where necessary. Furthermore, the processing of personal data must be relevant and limited to the purpose of the processing (Section 4).

In order to process personal data, the data controller must first obtain the consent of the data subject. However, the consent of the data subject will not be required in the following cases[46]:

- legal obligation to process data;
- when the life of the person concerned is at stake;
- where processing is necessary for entering into or performance of a contract to which the data subject is party;
- when the processing is necessary for the controller to fulfil its legal obligations;
- where processing is necessary for the legitimate interests of the controller, provided that such processing does not infringe the fundamental rights and freedoms of the data subject.

In particular, the data subject has the right to request correction of his or her personal data, where applicable, and to request the destruction or deletion of his or her personal data (Section 11 of the Personal Data Protection Act).

Türkiye has set up the Personal Data Protection Authority to ensure compliance with the Personal Data Protection Act.

- Special provisions for foreign investments

Foreign investment law is governed by the Foreign Direct Investment Act[47].

Section 2 of the Foreign Direct Investment Act defines a foreign investment as the creation by a foreign investor of a company or branch of a foreign company, or the acquisition of shares in a company established in Türkiye.

For example, Section 3 of the Foreign Direct Investment Act states that, subject to any exceptions, foreign investors are free to make foreign direct investments in Türkiye, and that they must be treated in the same way as domestic investors.

They may also freely transfer abroad:
- net income;
- dividends;
- proceeds from the sale or liquidation of all or part of an investment;
- compensation payments;
- amounts arising from licensing agreements;
- management and other similar agreements, as well as repayments and interest payments arising from foreign loans granted through banks or special financial institutions.

Main websites

- Turkish Franchise Association: https://ufrad.org/en/homepage/;
- Personal data: https://www.kvkk.gov.tr/en/;
- Competition: https://www.rekabet.gov.tr/en;
- Intellectual property: https://www.turkpatent.gov.tr/;
- Legislation: https://www.lawsturkey.com/law/;
- Official statistics institute: https://www.tuik.gov.tr/;
- World Bank data: https://donnees.banquemondiale.org/.

I. Economic Data

A. Macro-economic data

• General data [1]

Population 2021: 273,753,191 inhabitants

Area: 1,919,443 km2

Density: 129 inhabitants/km2

GDP (nominal) 2022: $1,319 bn[2]

GDP/capita 2022: $4,788[3]

GDP (PPP) 2022: $4,038 bn[4]

GDP (PPP)/capita 2022: $14,657.8[5]

2022 growth rate: 5.3%[6]

GNI/capita (PPP) 2021: $12,680

HDI 2021: 0.705

Literacy rate: 96%[7]

Life expectancy 2021: 72.5 years

- Policy[8]

Indonesia is a presidential republic. At the time of writing, the President of the Republic of Indonesia is Joko Widodo (since 2014). Presidential elections were held on February 14, 2024, and Prabowo Subianto, former Minister of Defense during Joko Widodo's presidency, won. He will take over from Joko Widodo in October 2024[9].

Joko Widodo had based his political program on opening up Indonesia's economy, building infrastructure within the archipelago and fighting terrorism. Prabowo Subianto has declared his intention to continue Joko Widodo's policies.

In terms of international policy, Indonesia is a founding member of ASEAN (Association of Southeast Asian Nations) and took over its presidency in 2023.

In 2022, Indonesia had the presidency of the G20.

Indonesia holds the presidency of the Asia-Pacific group (ASPAC) at UNESCO[3] for 2024.

• Economic development[10]

A member of the G20 and foremost of the ASEAN economies, Indonesia had a positive long-term growth rate, averaging +5.3% between the 1997 Asian crisis and the Covid-19 health crisis.

However, the Covid-19 pandemic pushed Indonesia into recession, with a contraction of -2.1% in 2020. However, Indonesia has managed to recover its growth rate, with a rise of +3.7% in 2021[11].

The middle class has grown in Indonesia, with an average increase of 10% per year.

Indonesia's public debt was 503.3 billion euros in 2022, representing 40.14% of GDP[12].

In 2021, the unemployment rate was 4.4%[13]. The inflation rate for February 2024 was 0.37%[14].

- Resources

Indonesia's main resources are agricultural (palm oil), hydrocarbon (oil and natural gas) and mineral (coal, rubber, silver, gold, bauxite, tin, copper, nickel). In this respect, Indonesia has the world's largest nickel reserves, with 21 million tonnes on its territory[15].

Agriculture accounts for 13.3% of GDP and employs 27.7% of the working population, mining and industry for 39.9% of GDP and employing 22.7% of the working population, and the service sector accounts for 46.8% of GDP with 49.6% of the working population[16].

• Population

Indonesia is the world's 4th most populous country[17]. 55% of the Indonesian population is urban[18].

23% of the population is under 15, 71% is between 15 and 65 and only 6% is over 65[19].

Indonesia's ten most populous cities are Jakarta (pop. 9.8 million), Medan (pop. 4.2 million), Surabaya (pop. 3.12 million), Bandung (pop. 2.6 million), Bekasi (pop. 2,1 million inhabitants), Tangerang (2 million inhabitants), Depok (1.8 million inhabitants), Palembang (1.8 million inhabitants), Makassar (1.4 million inhabitants) and Semarang (1.3 million inhabitants)[20] .

- Foreign investment[21]

Foreign direct investment fell in Indonesia between 2019 and 2021. This decline is due in particular to lower investment in the manufacturing industry caused by the Covid-19 health crisis. Foreign investment from Japan and Singapore has also fallen.

In 2022, foreign direct investment was around $21 billion.

The main investors in Indonesia are Singapore, Thailand, Japan, the UK, China and the USA.

I. Economic Data

B. Maro-economic data

- General data [1]

-Population 2021: 273,753,191 inhabitants
-Area: 1,919,443 km2
-Density: 129 inhabitants/km2
-GDP (nominal) 2022: $1,319 bn[2]
-GDP/capital 2022: $4,788[3]
-GDP (PPP) 2022: $4,038 bn[4]
-GDP (PPP)/capita 2022: $14,657.8[5]
-2022 growth rate: 5.3%[6]
-GNI/capita (PPP) 2021: $12,680
-HDI 2021: 0.705
-Literacy rate: 96%[7]
-Life expectancy 2021: 72.5 years

- Policy [8]

Indonesia is a presidential republic. At the time of writing, the President of the Republic of Indonesia is Joko Widodo (since 2014). Presidential elections were held on February 14, 2024, and Prabowo Subianto, former Minister of Defense during Joko Widodo's presidency, won. He will take over from Joko Widodo in October 2024[9].

Joko Widodo had based his political program on opening up Indonesia's economy, building infrastructure within the archipelago and fighting terrorism. Prabowo Subianto has declared his intention to continue Joko Widodo's policies.

In terms of international policy, Indonesia is a founding member of ASEAN (Association of Southeast Asian Nations) and took over its presidency in 2023.

In 2022, Indonesia had the presidency of the G20.

Indonesia holds the presidency of the Asia-Pacific group (ASPAC) at UNESCO[10] for 2024.

- Economic development [11]

A member of the G20 and foremost of the ASEAN economies, Indonesia had a positive long-term growth rate, averaging +5.3% between the 1997 Asian crisis and the Covid-19 health crisis.

However, the Covid-19 pandemic pushed Indonesia into recession, with a contraction of -2.1% in 2020. However, Indonesia has managed to recover its growth rate, with a rise of +3.7% in 2021[12].

The middle class has grown in Indonesia, with an average increase of 10% per year.

Indonesia's public debt was 503.3 billion euros in 2022, representing 40.14% of GDP[13].

In 2021, the unemployment rate was 4.4%[14]. The inflation rate for February 2024 was 0.37%[15].

- Foreign investment

Foreign direct investment fell in Indonesia between 2019 and 2021. This decline is due in particular to lower investment in the manufacturing industry caused by the Covid-19 health crisis. Foreign investment from Japan and Singapore has also fallen.

In 2022, foreign direct investment was around $21 billion.

The main investors in Indonesia are Singapore, Thailand, Japan, the UK, China and the USA.

- Population

Indonesia is the world's 4th most populous country[18]. 55% of the Indonesian population is urban[19].

23% of the population is under 15, 71% is between 15 and 65 and only 6% is over 65[20].

Indonesia's ten most populous cities are Jakarta (pop. 9.8 million), Medan (pop. 4.2 million), Surabaya (pop. 3.12 million), Bandung (pop. 2.6 million), Bekasi (pop. 2,1 million inhabitants), Tangerang (2 million inhabitants), Depok (1.8 million inhabitants), Palembang (1.8 million inhabitants), Makassar (1.4 million inhabitants) and Semarang (1.3 million inhabitants)[21] .

- Resources

Indonesia's main resources are agricultural (palm oil), hydrocarbon (oil and natural gas) and mineral (coal, rubber, silver, gold, bauxite, tin, copper, nickel). In this respect, Indonesia has the world's largest nickel reserves, with 21 million tonnes on its territory[16].

Agriculture accounts for 13.3% of GDP and employs 27.7% of the working population, mining and industry for 39.9% of GDP and employing 22.7% of the working population, and the service sector accounts for 46.8% of GDP with 49.6% of the working population[17].

I. Economic Data

A. Macro-economic data

-General data [1]

-Population 2021: 273,753,191 inhabitants
-Area: 1,919,443 km2
-Density: 129 inhabitants/km2
-GDP (nominal) 2022: $1,319 bn[2]
-GDP/capital 2022: $4,788[3]
-GDP (PPP) 2022: $4,038 bn[4]
-GDP (PPP)/capita 2022: $14,657.8[5]
-2022 growth rate: 5.3%[6]
-GNI/capita (PPP) 2021: $12,680
-HDI 2021: 0.705
-Literacy rate: 96%[7]
-Life expectancy 2021: 72.5 years

-Policy [8]

Indonesia is a presidential republic. At the time of writing, the President of the Republic of Indonesia is Joko Widodo (since 2014). Presidential elections were held on February 14, 2024, and Prabowo Subianto, former Minister of Defense during Joko Widodo's presidency, won. He will take over from Joko Widodo in October 2024[9].

Joko Widodo had based his political program on opening up Indonesia's economy, building infrastructure within the archipelago and fighting terrorism. Prabowo Subianto has declared his intention to continue Joko Widodo's policies.

In terms of international policy, Indonesia is a founding member of ASEAN (Association of Southeast Asian Nations) and took over its presidency in 2023.

In 2022, Indonesia had the presidency of the G20.

Indonesia holds the presidency of the Asia-Pacific group (ASPAC) at UNESCO[10] for 2024.

-Economic development [11]

A member of the G20 and foremost of the ASEAN economies, Indonesia had a positive long-term growth rate, averaging +5.3% between the 1997 Asian crisis and the Covid-19 health crisis.

However, the Covid-19 pandemic pushed Indonesia into recession, with a contraction of -2.1% in 2020. However, Indonesia has managed to recover its growth rate, with a rise of +3.7% in 2021[12].

The middle class has grown in Indonesia, with an average increase of 10% per year.

Indonesia's public debt was 503.3 billion euros in 2022, representing 40.14% of GDP[13].

In 2021, the unemployment rate was 4.4%[14]. The inflation rate for February 2024 was 0.37%[15].

- Resources

Indonesia's main resources are agricultural (palm oil), hydrocarbon (oil and natural gas) and mineral (coal, rubber, silver, gold, bauxite, tin, copper, nickel). In this respect, Indonesia has the world's largest nickel reserves, with 21 million tonnes on its territory[16].

Agriculture accounts for 13.3% of GDP and employs 27.7% of the working population, mining and industry for 39.9% of GDP and employing 22.7% of the working population, and the service sector accounts for 46.8% of GDP with 49.6% of the working population[17].

- Population

Indonesia is the world's 4th most populous country[18]. 55% of the Indonesian population is urban[19].

23% of the population is under 15, 71% is between 15 and 65 and only 6% is over 65[20].

Indonesia's ten most populous cities are Jakarta (pop. 9.8 million), Medan (pop. 4.2 million), Surabaya (pop. 3.12 million), Bandung (pop. 2.6 million), Bekasi (pop. 2,1 million inhabitants), Tangerang (2 million inhabitants), Depok (1.8 million inhabitants), Palembang (1.8 million inhabitants), Makassar (1.4 million inhabitants) and Semarang (1.3 million inhabitants)[21].

- Foreign investment

Foreign direct investment fell in Indonesia between 2019 and 2021. This decline is due in particular to lower investment in the manufacturing industry caused by the Covid-19 health crisis. Foreign investment from Japan and Singapore has also fallen.

In 2022, foreign direct investment was around $21 billion.

The main investors in Indonesia are Singapore, Thailand, Japan, the UK, China and the USA.

B. Economic data specific to franchising

- Historical background

The franchising sector took off in the 1980s in Indonesia, particularly with the arrival of American franchises in the country[23].

- Institution

Indonesia has set up the Indonesian Franchise Association[24], founded on November 22, 1991[25].

- Statistics [28]

National franchises are particularly well-established in the following sectors: food and beverages (58.37%), informal education (education outside the traditional school learning system) (13.40%) and retail (15.31%)[29].

In July 2023, Indonesia had 135 franchisors, both domestic and international, registered with the Ministry of Commerce, representing a 5% increase on 2022.

The 5 best-performing franchises in the food sector, in terms of sales, are McDonald's ($409.8 million), KFC ($408.2 million), Pizza hut ($247.2 million), Starbucks ($154.9 million) and Burger King ($59.9 million).

Between 2012 and 2023, a further 650 franchises were established in Indonesia. Of these 650 franchises, 130 were of Indonesian origin and 520 were foreign.

In 2019, Indonesia counted more than 24,000 franchise units, an increase of 14.75% on 2018[30].

- Trade shows

The Indonesian Franchise Association is organizing the 23nd International Franchise, Licensing and Business Concept Exhibition. The show will take place from April 25 to 27 at the Indonesia Convention Exhibition and from August 29 to 31, 2025 at the Jakarta Convention Center[26].

The Jakarta International Expo (Jiexpo)[27] will also host the Franchising and Licensing Exhibition from May 16 to 18, 2024 [27].

- Contract content

The cost of a franchise varies from one business sector to another. For example, for the Kumon

Method Learning franchise, the initial investment is between $7,000 and $14,000[31]. For a franchise such as La Mie Câline, the initial investment is $87,355.20[32].

- International

International franchises operating in Indonesia are mainly established in the food and beverage (63%), informal education (14.52%) and retail (13.7%) sectors[34].

II. Legal information

A. Legal information directly related to franchising

- Applicable legislation

Indonesia has specific regulations governing franchising, namely Government Regulation No. 42/2007 and the Regulation on the Establishment of Franchises[35].

According to Section 1 of regulation n°42/2007, franchising is defined as a special right, held by a natural or legal person, concerning a commercial system for marketing goods and/or services which have been proven to be successful and which are usable and/or applicable by other parties on the basis of a franchise agreement.

The franchisor is a natural or legal person who grants a franchisee the right to use his franchise (Section 1, paragraph 2). The franchisee is a natural or legal person who is granted the right to use a franchise held by a franchisor (Section 1, paragraph 2).

Section 4 of the aforementioned regulation specifies that franchise agreements must be drawn up in English and translated into Indonesian.

In addition, franchise agreements must at the very least contain clauses relating to the following information:

the names and addresses of the parties;
the type of intellectual property right concerned;
the business activity concerned;
the rights and obligations of the parties;
assistance, installations, operational advice, training and marketing provided by the franchisor to the franchisee;
the business sector;
contract duration;
the compensation payment procedure;
ownership, any changes in ownership and the rights of successors;
dispute resolution;
contract renewal, interruption and termination procedures.

- Pre-contractual information

Regulation no. 42/2007 requires franchisors to provide prospective franchisees with pre-contractual information, known as a "franchise offer prospectus", at least two weeks before signing the franchise agreement.

According to Section 7 of the Regulation, the franchisor must provide the following information:

the identity of the franchisor ;
proof of the legality of the franchise agreement;
the history of the franchisor's commercial activity;
the organizational structure of the franchise;
Financial statements for the last two years of the franchise in question;
number of commercial establishments ;
list of franchisees;
the rights and obligations of the parties.

In addition, the franchisor is obliged to register the franchise offer prospectus with the Minister of Commerce, before entering into the franchise agreement, in order to obtain a franchise registration certificate. The Regulation on the Establishment of Franchises no longer limits the duration of this certificate to 5 years.

- Contract performance

The franchise agreement must be registered with the Minister of Commerce and must also obtain a franchise registration certificate (Section 11 of regulation no. 42/2007). Here again, under the regulation on the establishment of franchises, the duration of the franchise registration certificate is no longer limited to 5 years.

Throughout the term of the franchise agreement, the franchisor must support the franchisee with training and management advice (Section 8 of regulation no. 42/2007).

The parties must give priority to the use of domestic products if they meet the quality standards for goods and/or services specified in the franchise agreement.

- Jurisdiction and applicable law

Indonesia ratified the New York Convention on Arbitration[36] on October 7 1981, facilitating the recognition and enforcement of foreign arbitral awards.

- Trademarks

Trademark law is governed by the Trademarks and Geographical Indications Act[37].

The law on trademarks and geographical indications distinguishes between service trademarks and collective trademarks.

Thus, service trademarks mean any trademark used for services marketed by a natural or legal person in order to distinguish said services from other similar services. Collective trademarks, on the other hand, mean any trademark used for goods and/or services with similar characteristics concerning the nature, general features, quality of the goods or services, as well as control, which will be marketed by several persons, in order to distinguish them from other similar goods and/or services (Section 1, paragraphs 2 and 3 of the Trademarks and Geographical Indications Act).

To obtain trademark protection, an application must be filed with the Directorate General of Intellectual Property (DGIP)[2] .

Once registered, the trademark is protected for 10 years from the date of filing. Protection can be renewed for a further 10 years (Section 35 of the Trademarks and Geographical Indications Act).

In addition, Indonesia ratified the Madrid Protocol on January 2, 2018, enabling companies to obtain trademark protection, in up to 130 countries, by filing a single international application, in a single language, with the World Intellectual Property Organization (WIPO). Under Article 6 of the Madrid Agreement, a trademark registration is valid for 20 years.

To go further by MIIP

In Indonesia, trademark applications can be national or international. The TMO accepts both multiclass and single class applications. Each application undergoes an examination process during which notifications may be issued. A registered trademark must be used within three consecutive years from its registration date or last use to avoid cancellation. For developing a franchise, it is advisable to cover "Business assistance relating to franchising" and retail services that are accepted in class 35 by the trademark office. Recording a franchising agreement is compulsory for the franchisee. The franchisor must register an offering prospectus. The agreement, filed with the Ministry of Trade (MoT), must meet specific content requirements. Upon approval, a Franchise License (STPW) is issued. Failure to register can lead to administrative sanctions, including fines, though there is no deadline for registering a franchise agreement.

I. Economic Data

B. Maro-economic data

- General data [1]

-Population 2021: 273,753,191 inhabitants
-Area: 1,919,443 km2
-Density: 129 inhabitants/km2
-GDP (nominal) 2022: $1,319 bn[2]
-GDP/capital 2022: $4,788[3]
-GDP (PPP) 2022: $4,038 bn[4]
-GDP (PPP)/capita 2022: $14,657.8[5]
-2022 growth rate: 5.3%[6]
-GNI/capita (PPP) 2021: $12,680
-HDI 2021: 0.705
-Literacy rate: 96%[7]
-Life expectancy 2021: 72.5 years

- Policy [8]

Indonesia is a presidential republic. At the time of writing, the President of the Republic of Indonesia is Joko Widodo (since 2014). Presidential elections were held on February 14, 2024, and Prabowo Subianto, former Minister of Defense during Joko Widodo's presidency, won. He will take over from Joko Widodo in October 2024[9].

Joko Widodo had based his political program on opening up Indonesia's economy, building infrastructure within the archipelago and fighting terrorism. Prabowo Subianto has declared his intention to continue Joko Widodo's policies.

In terms of international policy, Indonesia is a founding member of ASEAN (Association of Southeast Asian Nations) and took over its presidency in 2023.

In 2022, Indonesia had the presidency of the G20.

Indonesia holds the presidency of the Asia-Pacific group (ASPAC) at UNESCO[10] for 2024.

- Economic development [11]

A member of the G20 and foremost of the ASEAN economies, Indonesia had a positive long-term growth rate, averaging +5.3% between the 1997 Asian crisis and the Covid-19 health crisis.

However, the Covid-19 pandemic pushed Indonesia into recession, with a contraction of -2.1% in 2020. However, Indonesia has managed to recover its growth rate, with a rise of +3.7% in 2021[12].

The middle class has grown in Indonesia, with an average increase of 10% per year.

Indonesia's public debt was 503.3 billion euros in 2022, representing 40.14% of GDP[13].

In 2021, the unemployment rate was 4.4%[14]. The inflation rate for February 2024 was 0.37%[15].

- Foreign investment

Foreign direct investment fell in Indonesia between 2019 and 2021. This decline is due in particular to lower investment in the manufacturing industry caused by the Covid-19 health crisis. Foreign investment from Japan and Singapore has also fallen.

In 2022, foreign direct investment was around $21 billion.

The main investors in Indonesia are Singapore, Thailand, Japan, the UK, China and the USA.

- Population

Indonesia is the world's 4th most populous country[18]. 55% of the Indonesian population is urban[19].

23% of the population is under 15, 71% is between 15 and 65 and only 6% is over 65[20].

Indonesia's ten most populous cities are Jakarta (pop. 9.8 million), Medan (pop. 4.2 million), Surabaya (pop. 3.12 million), Bandung (pop. 2.6 million), Bekasi (pop. 2,1 million inhabitants), Tangerang (2 million inhabitants), Depok (1.8 million inhabitants), Palembang (1.8 million inhabitants), Makassar (1.4 million inhabitants) and Semarang (1.3 million inhabitants)[21] .

- Resources

Indonesia's main resources are agricultural (palm oil), hydrocarbon (oil and natural gas) and mineral (coal, rubber, silver, gold, bauxite, tin, copper, nickel). In this respect, Indonesia has the world's largest nickel reserves, with 21 million tonnes on its territory[16].

Agriculture accounts for 13.3% of GDP and employs 27.7% of the working population, mining and industry for 39.9% of GDP and employing 22.7% of the working population, and the service sector accounts for 46.8% of GDP with 49.6% of the working population[17].

- Contract content

In practice, the majority of franchise contracts are entered into for a period of either five or ten years. 30% of franchisees have been operating a franchise for between 5 and 10 years, and almost 40% of franchisees for more than 10 years.

When starting up a franchise, franchisors charge an initial franchise set-up fee, which varies according to the type of franchise. This cost is highest in the retail sector, where it can exceed $1 million.

Franchise fees are calculated on the basis of the number of sales, and are generally 5-6%. [18]

B. Peripheral legal data

- Competition law

Franchise agreements must comply with Indonesian competition law, which is governed by the Prohibition of Monopolistic Practices and Unfair Competition Act[39].

Section 2 of this law establishes the principle that economic players in Indonesia must conduct their businesses on the basis of the principles of economic freedom, respecting the balance between the interests of economic players and the public interest.

Section 4 of the Prohibition of Monopolistic Practices and Unfair Competition Act prohibits economic players from entering into agreements with other economic players with the aim of jointly controlling the production, or marketing, of goods or services likely to give rise to monopolistic practices or unfair competition.

It is forbidden to enter into agreements to fix the price of certain goods and/or services. More specifically, competitors may not enter into agreements to set prices below market levels, which could lead to unfair competition (Sections 5 and 7 of the Prohibition of Monopolistic Practices and Unfair Competition Act).

Furthermore, economic players may not enter into agreements with a view to dividing up the market for goods and services (Section 9 of the Prohibition of Monopolistic Practices and Unfair Competition Act).*

With regard to vertical agreements, the said law specifies that economic players may not enter into agreements with each other with the aim of controlling the production of several goods which are products included in the production chain of certain related goods and/or services (Section 14 of the Prohibition of Monopolistic Practices and Unfair Competition Act).

Indonesia has set up a competent authority tasked with enforcing competition law in Indonesia. This is the Commission for the Supervision of Commercial Competition[40].

- Personal data

Personal data law is governed by the Personal Data Protection Act[41] , which came into force in 2022.

This law defines personal data as any information relating to an identified or identifiable natural person, whether through an electronic or non-electronic system (Section 1, Paragraph 1).

Under the Personal Data Protection Act, the data subject has the right to be informed about the processing of their data (identity of the person processing their data, purpose of the processing, etc.), the right to request rectification of their data if necessary, the right to access their personal data held by the data controller, the right to data portability enabling data subjects to obtain and re-use their data for their purposes in different services.

Section 16, paragraph 2 of the Personal Data Protection Act specifies that the data controller must only collect personal data that is strictly necessary for the intended purpose.

The data controller may process the data subject's personal data if it obtains the data subject's lawful consent. However, the consent of the data subject will not be required if the processing is necessary:

for the performance of a contract to which the data subject is a party;
to comply with the data controller's legal obligations;
to protect the vital interests of the data subject;
to carry out a mission of public interest;
to achieve other legitimate interests of the controller, taking into account the purposes, needs and balance between the interests of the controller and the rights of the data subject.

At the time of writing, there is no competent authority tasked with enforcing the law on personal data protection.

- Special provisions for foreign investments

Foreign investment law is governed by the Investment Act[42] and law n°6/2023.

Section 1, paragraph 1 of the Investment Act defines foreign investment as any investment for the management of a business in the territory of the Republic of Indonesia, made by a foreign investor using either only foreign capital, or foreign and domestic capital.

Section 6 of the Investment Act states that the Indonesian state grants equal treatment to all investors, whether national or foreign, who invest in Indonesia in accordance with the rule of law.

Law n°6/2023 aims to enhance Indonesia's competitiveness, particularly by reducing company taxes. As a result, taxes on foreign companies have been reduced from 20% to 17% for companies listed in Indonesia[43].

Main websites

-Indonesian Franchise Association: https://www.franchiseindonesia.or.id/;

-Competition: https://eng.kppu.go.id/;

-intellectual property: https://www.dgip.go.id/;
-Statistics Office: https://www.bps.go.id/id;

- World Bank data: https://donnees.banquemondiale.org/.

[1] Unless otherwise stated, the general data comes from the l’Atlas socio-économique des pays du monde, Larousse, édition 2024
[2] Source : Banque Mondiale
[3] Source : Banque Mondiale
[4] Source : Banque Mondiale
[5] Source : Banque Mondiale
[6] Source : Banque Mondiale
[7] Source : Banque Mondiale
[8] Unless otherwise indicated, the information below comes from Source: Diplomatie.Gov.
[9] Source : La Nouvelle République
[10] Source : Kemlu

[11] Sauf indication contraire, les informations ci-dessous proviennent de Diplomatie.gov
[12] Source : Banque Mondiale
[13] Source : Country Economy
[14] Atlas socio-économique des pays du monde, Larousse, édition 2024
[15] Source : Statistics Table
[16] Source : Asialist
[17] Atlas socio-économique des pays du monde, Larousse, édition 2024
[18]Source : Diplomatie.gov
[19] Atlas socio-économique des pays du monde, Larousse, 2024 edition
[20] Atlas socio-économique des pays du monde, Larousse, 2024 edition

[23] https://www.trade.gov/market-intelligence/indonesia-franchising
[24] Jl. Darmawangsa X No. A 19, Kebayoran Baru, Jakarta Selatan 12150, tél : (6221) 7395577, adresse e-mail : sukandar@indo.net.id
[25] https://www.franchiseindonesia.or.id/about-us
[26] https://ifra-indonesia.com/
[27] https://franchise-expo.co.id/
[21] Source : Escalade de nuit

[29] Source : Trade.Gov
[30] Source : Zipdo
[31] Source : Top Franchise
[32] Source : Franchise Direct
[33] Source : Trade.gov
[34] Source : Trade.gov

[35] Regulation No. 71/2019
[36] New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of June 10, 1958
[37] Law No. 20/2016

[38] Kementerian Hukum & Hak Asasi ManusiaJl. HR. Rasuna Said Kav. 8-9,Jakarta Selatan, Jakarta, Indonesia, adresse e-mail : halodjki@dgip.go.id

[39] Law n°5/1999
[40] Jl. Ir. H. Juanda No. 36 Jakarta Pusat Indonesia / 10120, tél : (+62-21)-3507008, adresse e-mail : international@kppu.go.id
[41] Law n°27/2022
[42] Law n°25/2007
[43] https://asianinsiders.com/2023/05/16/indonesias-omnibus-law-attracting-foreign-investment/