LKPP Regulation No. 3 of 2026: The Era of “Flag-Borrowing” Comes to an End; Independent Legality Is Key
The practice of borrowing another company’s name to participate in government tenders—commonly known as “flag borrowing”—is now strictly prohibited. This prohibition is stipulated in Article 5 of Regulation No. 3 of 2026 issued by the Government Goods and Services Procurement Policy Agency (LKPP). For businesses wishing to participate in government procurement, this regulation sends a strong signal that they must have their own business entity.
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