Indonesia is making two significant regulatory changes at once, and firms operating there have until the end of October to prepare for the larger of them.

The Manpower Law

On 14 July 2026, Indonesia’s House of Representatives confirmed that Commission IX is fast-tracking deliberation of a new Manpower Law. It would be the most significant overhaul of the country’s employment framework since the 2023 Job Creation Law, itself a contested piece of legislation that reached the Constitutional Court.

Two things are already fixed: a 31 October 2026 deadline, and a direction of travel toward tighter contract terms and a narrower scope for outsourcing.

That direction reverses the liberalising thrust of the Job Creation Law, which expanded permissible outsourcing and relaxed fixed-term contract rules. Employers that restructured their workforce arrangements to take advantage of those provisions may find the underlying permission removed.

The exposure is concentrated in labour-intensive manufacturing, logistics, retail, security and facilities management — sectors where outsourced and fixed-term arrangements often make up a substantial share of headcount. Reclassifying such workers as permanent employees changes severance liability, benefits and termination procedure.

The e-commerce rules

Permendag 19/2026 took effect on 8 June 2026, revoking Permendag 31/2023 and replacing it with a considerably broader framework for digital commerce serving Indonesian consumers. The PMSE framework — the regime for electronic system trading — now extends across eight business models, adding ride-hailing platforms and online travel agents to the scope.

The expansion follows an established Indonesian pattern: identify a digital business model creating economic activity in Indonesia without a corresponding regulatory presence, then bring it inside the perimeter. Offshore operators serving Indonesian users through an app have generally been the target.

Why this lands the way it does

Indonesia is the largest ASEAN economy and a leading beneficiary of supply chain diversification away from China. That gives regulators room to raise requirements without expecting investors to leave, and the government has been steadily converting market access into local commitments across sectors from mining to payments.

For inbound investors the practical consequence is that Indonesian regulatory risk is now more about implementing regulations and ministerial decrees than about primary legislation. Permendag 19/2026 is a trade ministry regulation, not an act of parliament, and it changed the compliance position of an entire category of platforms with limited notice.

What to do before 31 October

Start with an audit of outsourced and fixed-term headcount, and an estimate of what converting those roles to permanent status would cost. Then read the vendor contracts with outsourcing providers, because the risk of a legislative change of this kind is rarely allocated in the agreement and someone will end up bearing it. Platform businesses have a separate question: whether the expanded PMSE scope now captures a service that previously sat outside it. Ride-hailing, travel booking and marketplace hybrids are the obvious places to check.

Summary

Indonesia is fast-tracking a new Manpower Law against a 31 October 2026 deadline, with tighter contract rules and narrower outsourcing scope signalled, reversing parts of the 2023 Job Creation Law. Separately, Permendag 19/2026 took effect on 8 June 2026 and extended e-commerce regulation to eight business models including ride-hailing and online travel agents. Employers with outsourced Indonesian headcount and platforms serving Indonesian users from offshore have concrete work to do this quarter.