Corporate Crime Subject to New Procedural Rules (Effective January 2026)
Following its passage by Indonesia’s House of Representatives (Dewan Perwakilan Rakyat – “DPR”) on 18 November 2025, the Bill on Criminal Procedural Law has now been formally enacted by President Prabowo Subianto through the issuance of Law No. 20 of 2025 on Criminal Procedural Law (“Law 20/2025”).
Law 20/2025 was signed on 17 December 2025 and officially comes into force on 2 January 2026, simultaneously repealing and replacing Law No. 8 of 1981, which had governed Indonesia’s criminal procedural framework for more than four decades.
While retaining the core procedural architecture of the previous regime, Law 20/2025 introduces substantial reforms—most notably the formal recognition of corporate criminal liability, alongside new mechanisms for Deferred Prosecution Agreements (DPA) and plea bargaining. Collectively, these reforms materially reshape Indonesia’s criminal risk landscape for companies, directors, and senior management.
Key Focus Areas Under Law 20/2025
This update focuses on three developments with direct relevance to business actors:
1. Corporate Criminal Liability
2. Deferred Prosecution Agreements (DPA)
3. Plea Bargaining
1. Corporate Criminal Liability: A Formal Procedural Framework
Explicit Recognition of Corporate Crime
Under the previous framework of Law 8/1981, corporate criminal liability existed largely through judicial interpretation and sector-specific laws. Law 20/2025 closes this gap by expressly recognizing that corporations themselves may be held criminally liable, in addition to their management and controlling persons.
The law further defines “Persons in Charge” (PIC) of a corporation to include, among others:
- Directors and commissioners
- Managers and supervisors
- Controlling shareholders or beneficial owners
- Any party exercising effective control over corporate decision-making
Procedural Representation of Corporations
From an investigative standpoint, Law 20/2025 clarifies that:
- A corporation is represented during criminal proceedings by its designated PIC
- Summonses must be formally addressed to the PIC
- Failure to appear may result in re-summonses or compulsory attendance orders
This represents a significant procedural tightening, particularly for foreign-owned PMAs, nominee-based structures, and passive shareholder arrangements.
Sanctions Against Corporations
Criminal penalties imposed on corporations are limited to:
- Main penalties (pidana pokok): fines
- Additional penalties (pidana tambahan)
Fines must be paid within one month of a final and legally binding decision, with a single possible extension of one additional month for valid reasons. If unpaid, the public prosecutor may seize and auction corporate assets with court approval.
Restorative Justice for Corporations
Law 20/2025 also introduces restorative justice mechanisms, including for corporate offenders, particularly where:
- The offense is a first-time violation
- Compensation or restitution has been paid
- Corrective or compliance measures have been implemented
This reflects a policy shift toward compliance-driven resolution, rather than punishment alone.
2. Deferred Prosecution Agreements (DPA)
A New Tool for Corporate Defendants
Law 20/2025 introduces Deferred Prosecution Agreements (DPA) as a formal mechanism allowing prosecutors to defer prosecution against corporate suspects under strict conditions.
A DPA application may be submitted by:
- A suspect or defendant
- Legal counsel
- Prior to the filing of the case before the court
Approval rests entirely with the public prosecutor, who must consider:
- Public interest
- Victim interests
- The corporation’s compliance history
DPA Process and Legal Consequences
Once approved, the DPA process follows structured procedural stages and ultimately requires judicial review, ensuring proportionality and legal certainty.
Possible outcomes include:
- Approved and fulfilled: the case may be dismissed by court order
- Rejected: the case proceeds to trial
- Not fulfilled: prosecution resumes without further approval
Typical DPA Obligations
Obligations under a DPA may include:
- Payment of compensation or restitution
- Implementation of compliance programs and governance reforms
- Cooperation with law enforcement
- Reporting and monitoring obligations
Any procedural violations may render a DPA legally void, giving defendants grounds to challenge the process.
3. Plea Bargaining: A Formalized Admission Framework
Law 20/2025 also introduces a plea-bargaining mechanism, allowing defendants to:
- Admit guilt
- Cooperate during investigations
- Provide supporting evidence
In exchange, defendants may receive reduced sentences, subject to strict statutory requirements.
Key Conditions
- Generally limited to first-time offenders
- Requires a written plea agreement
- Subject to judicial approval
Judges retain full oversight and must ensure that:
- The plea is voluntary
- No coercion is involved
- Legal consequences are fully understood
If a plea is rejected, proceedings continue under the ordinary criminal trial process.
Key Takeaways for Business Actors
Law 20/2025 represents a material escalation of criminal exposure for corporations operating in Indonesia. In practice, this means:
- Corporate entities—not just individuals—are now procedurally accountable
- Directors, commissioners, and controlling persons face heightened scrutiny
- DPA and restorative justice offer alternatives, but only for compliant and cooperative companies
- Plea bargaining underscores the importance of integrated criminal risk and compliance management
For PMAs, developers, hospitality operators, and investment vehicles, the message is clear: criminal compliance is no longer optional, informal, or reactive.
Strong governance, transparent ownership structures, and documented compliance systems will increasingly determine whether a case proceeds to prosecution—or can be resolved at an early stage.
How Seven Stones Indonesia Can Assist
The introduction of Law No. 20 of 2025 fundamentally changes the criminal risk profile for companies operating in Indonesia. Corporate criminal liability, DPA mechanisms, and plea bargaining now require businesses to move beyond informal compliance and adopt structured, defensible governance and risk-management systems.
Seven Stones Indonesia assists foreign and domestic business actors in navigating this new environment through a preventive, compliance-first approach, including:
➤ Corporate Criminal Risk Assessment
We review corporate structures, ownership arrangements, and management roles to identify potential exposure under the new PIC (Person in Charge) framework—particularly relevant for PMAs, nominee structures, and shareholder-led businesses.
➤ Governance & Compliance Structuring
We assist companies in designing and implementing:
- Internal compliance programs
- Clear delegation of authority and responsibility
- Board and management protocols aligned with Indonesian criminal procedure
These measures are critical both for risk prevention and for eligibility under DPA and restorative justice frameworks.
➤ DPA & Restorative Justice Strategy
Where criminal exposure exists, we support companies and management in:
- Preparing DPA applications
- Structuring restitution, remediation, and compliance commitments
- Coordinating with counsel and authorities to ensure procedural safeguards are respected
➤ Director & Management Protection
We advise directors, commissioners, and controlling shareholders on:
- Personal exposure under Law 20/2025
- Documentation and decision-making standards
- Defensive governance strategies to reduce individual criminal risk
➤ Integrated Legal & Business Advisory
Unlike purely reactive legal representation, Seven Stones combines legal, licensing, corporate, and investment advisory to ensure that businesses are not only compliant on paper, but defensible in practice.
In an era where corporations can no longer hide behind structure or silence, proactive compliance is the strongest form of legal protection.
For companies seeking clarity, risk reduction, or strategic guidance under Indonesia’s new criminal procedural regime, Seven Stones Indonesia stands ready to assist