Through Regulation Number PM.45 of 2015, the Minister of Transportation of the Republic of Indonesia ("MOT") has decided to determine the minimum capital requirements for companies in the transportation sector, which came into effect on 24 February 2015.

The MOT adjusted the minimum capital requirements to ensure that transportation companies stand on a strong capital base to support the threshold scale of operations in providing effective public services.

Below is the table of minimum capital requirements for transportation companies:

Transportation companies that have already obtained their transportation business licenses are obliged to adjust their capital within three (3) years upon the enactment of this regulation. Any violation to the above capital requirements may impose administrative sanctions such as a written warning, suspension and revocation of licenses.

As this regulation requires a minimum capital for transportation companies, the Indonesian Government will also prepare an amendment covering the limitation of foreign ownership in the transportation sector by the end of this year. Currently, under Presidential Regulation Number 39 of 2014, the limitation of foreign ownership shall be between 49% - 60%. Such amendment will be carried out as an implementation to the ASEAN Economic Community and ASEAN Framework Agreement on Services, which requires its members to allow up to 70% foreign ownership in the transportation sector.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.