Indonesia’s new criminal codes take effect — Is your company ready?

A new, integrated criminal law framework

On 2 January 2026, Indonesia completed one of its most significant legal reforms in decades with the full entry into force of its new Criminal Code (KUHP) and Criminal Procedure Code (KUHAP). Together, these laws reshape not only the substance of criminal liability but also the way investigations, prosecutions, and resolutions are conducted.

From a corporate perspective, what matters in practice is their combined effect: a more coherent, predictable, and enforcement ready framework for assessing corporate conduct, individual responsibility, and remedial outcomes.

For companies operating in Indonesia—particularly multinational groups accustomed to compliance driven enforcement regimes elsewhere—these reforms recalibrate how criminal risk is evaluated and managed.

Corporate criminal liability: From sectoral rules to a general framework

Corporate criminal liability is not new in Indonesia. Under the previous regime, corporations could already be held liable under a number of sector specific statutes, most notably environmental and anti corruption laws. What the new framework changes is not the existence of liability, but its structure, clarity, and reach.

For the first time, corporate criminal liability is comprehensively codified within Indonesia’s general criminal law. This consolidates previously fragmented principles and provides clearer guidance on when liability arises and whose conduct may be attributed to the company.

Under the new framework:

• Corporations are expressly recognized as subjects of criminal law.
• Liability may arise from acts committed by directors, officers, employees, agents, or other parties acting within the scope of the company’s activities or for its benefit.
• Individuals exercising effective control or deriving benefit from misconduct may expose the company to liability, even if they sit outside the formal organizational structure.

Equally important is the shift toward organizational responsibility. Failures in supervision, internal controls, or compliance systems may themselves form the basis for corporate liability where misconduct is allowed to occur or remains unaddressed.

Individual exposure: Accountability beyond formal titles

Alongside corporate liability, the new regime clarifies personal exposure for individuals involved in corporate decision making.

Authorities may pursue the company and responsible individuals in parallel. Liability is not limited to formal office holders, but may extend to anyone who:

• exercises decision making authority or effective control,
• directs or facilitates wrongdoing,
• benefits from criminal conduct, or
• fails to act on known risks or warning signs.

For multinational organizations, this has particular significance in matrixed structures where responsibilities are shared, decisions are escalated informally, or oversight relies heavily on local management. Increasingly, enforcement focuses on whether senior management meaningfully engaged with compliance and risk, rather than merely approving policies at a high level.

Enforcement and resolution: A more nuanced toolkit

Indonesia’s procedural reforms modernize enforcement while expanding the range of possible outcomes.

Investigators now operate within a clearer framework for evidence gathering, digital and financial investigations, asset freezing, and judicial oversight of coercive measures. At the same time, the system introduces greater flexibility in resolving cases, particularly for corporate matters.

The framework allows for resolution mechanisms that emphasize remediation, accountability, and restoration—rather than purely punitive sanctions—where appropriate. These include deferred prosecution arrangements for corporations, structured admissions in suitable cases, and restorative justice mechanisms where harm can be effectively remedied.

These options are not automatic. Access to resolution focused outcomes will depend heavily on the company’s conduct before and after an incident, including:

• the credibility of its compliance framework,
• the speed and effectiveness of its internal response,
• cooperation with authorities, and
• the implementation of genuine remedial measures.

What this means in practice

Taken together, the reforms signal a shift in emphasis rather than a complete break from past practice. Indonesia is aligning more closely with jurisdictions where criminal exposure is shaped as much by how companies manage risk as by the underlying offense itself.

Several practical themes emerge:

• Clarity brings accountability. Codification reduces uncertainty, but also narrows the space for reliance on regulatory ambiguity.
• Compliance must be operational. Policies carry little weight if they are not supported by training, controls, escalation pathways, and documented oversight.
• Governance matters. Board level and senior management engagement with compliance issues is no longer peripheral.
• Early response shapes outcomes. How an organization investigates, documents, and addresses issues may be as significant as the issue itself.

Ultimately, the question for companies is not whether the law has changed, but whether existing governance and compliance arrangements are ready for how it may now be applied.

Looking ahead

As with any major reform, implementation will evolve. Prosecutors, courts, and regulated entities will require time to internalize and test the new tools and standards, and enforcement approaches will continue to develop. In addition, a number of provisions under the new criminal law framework will require implementing regulations, which are expected to further clarify procedural mechanics and substantive requirements in specific areas.

What is already clear is that the new regime rewards preparation. Organizations that can demonstrate effective prevention, oversight, and response will be better positioned to manage legal, operational, and reputational risk in Indonesia’s evolving enforcement landscape.

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This article is based on the official texts of Indonesia’s new criminal legislation and independent analysis by Hogan Lovells Jakarta. It is intended for general information purposes and does not constitute legal advice.

Authored by Chalid Heyder and Teguh Darmawan.