Outsourced Activities Clarified: Scope of Work Limited to Six Supporting Services, with Two-Year Transition Period for Compliance

The Minister of Manpower (“Minister”) has issued Regulation No. 7 of 2026 on Outsourcing (“Regulation 7/2026”). This framework will now apply to any companies that allocate certain types of work to outsourcing service providers (Perusahaan Pemberi Pekerjaan – “Engaging Companies”) and the various registered entities that provide outsourcing services (Perusahaan Alih Daya – “Outsourcing Companies”).[1] Regulation 7/2026 will now serve as an Implementing Regulation to the mandate specifically set out under Decision of the Constitutional Court (“Court”) No. 168/PUU-XXI/2023 (“Decision 168/2023”).[2]