INDONESIA Law and Practice Contributed by: Chandrawati Dewi, Gustaaf Reerink and Bilal Anwari, ABNR Counsellors at Law
2. Jurisdiction 2.1 Notification
Penanaman Modal Asing , or PT PMA) and domiciled within the territory of the state of the Republic of Indo - nesia, unless provided otherwise by the law. Foreign investors who make investment through a PT PMA should: • subscribe to shares at the time the PT PMA is established; • purchase shares; or • invest through another method in accordance with laws and regulations. The 2021 Investment List indicates: • six business fields are completely prohibited from FDI under the Job Creation Law (narcotics, gambling/casinos, harvesting of fish listed in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), utilisa - tion or harvesting of coral, chemical weapons, and chemicals that might damage the ozone layer); • 60 business fields are reserved for co-operatives (co-ops) and SMEs; • 46 business fields are open to FDI if in partnership with co-ops and SMEs; and • 37 business fields are subject to specific require - ments, which may be classified as: (a) open to FDI but subject to maximum foreign shareholding limit, (b) open to FDI but subject to special approval from the relevant ministry, (c) there is no longer any investment regulated by the provincial government such as in the alco - hol/malt beverage industry, and (d) 100% reserved for domestic investors. Several sectoral laws (eg, in banking, non-banking financial services (venture capital, multi-finance, secu - rities companies), insurance, mining, oil and gas, ship - ping) introduce foreign investment rules and restric - tions. It goes beyond the scope of this overview to discuss these sectoral laws in detail. 1.3 Enforcement Authorities Merger control in Indonesia is enforced by the KPPU.
A post-merger notification is compulsory if all crite - ria are met. Parties involved in the transaction may carry out a voluntary pre-merger notification. How - ever, even if parties carry out a voluntary pre-merger notification, the post-merger notification will still be mandatory once the closing of transaction occurs. No exceptions exist. 2.2 Failure to Notify There are penalties for failing to notify the KPPU within 30 business days from the closing date of transaction. Under the Competition Law and Regulation 57/2010, a late notification penalty of IDR1 billion (approxi - mately USD58,000) per day, with a maximum of IDR25 billion (approximately USD1.45 million) applies. How - ever, there have been several occasions where the KPPU indicated that it is considering implementing a new approach for calculating administrative fines, tak - ing into account the profit/turnover-based fines cal - culating method introduced by Regulation 44/2021. The regulation does not specify the maximum fine for late merger filing and thus this new method could potentially lead to fines that exceed the nominal limit of IDR25 billion (although such an amount has never been imposed in practice). In 2022, there was a KPPU decision on late submission where the tribunal refer - enced Regulation 44. However, the penalties imposed were less than IDR25 billion. The KPPU’s decisions on violations of the Competi - tion Law, including late merger filings, are published on the KPPU’s official website. Information on penal - ties can also be found in the KPPU’s news articles and reports, which are also available on their website. 2.3 Types of Transactions Several types of transactions are caught by Indone - sian merger control rules ‒ ie, mergers, consolidations and acquisitions (both for share and asset transac - tions). However, only transactions that fulfil the follow - ing criteria are caught by Indonesian merger control rules: • results in a change of control;
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