INDONESIA Law and Practice Contributed by: Jufrian Murzal and Enos Martryn Budiman, Murzal and Partners
2. Overview of Regulatory Field 2.1 Acquiring a Company The primary techniques/legal means for acquiring a company in Indonesia are as follows: • Share acquisition: The most common structure in Indonesia is the acquisition of existing shares. The buyer acquires shares from existing shareholders and gains control of the target company. A key advantage is that the company remains the same legal entity, allowing licences, contracts and opera - tions to continue without major changes, which is particularly important for regulated businesses. • Subscription of newly issued shares: Investors may also subscribe to newly issued shares, increasing the company’s share capital while obtaining an ownership stake. This structure is commonly used for capital injections, strategic partnerships and minority investments, especially when the com - pany requires additional funding. • Merger: Merger is also a recognised acquisition method under Indonesian law, although in practice it is generally more process-driven and less fre - quently used than a conventional share acquisition. It may nevertheless be appropriate where the par - ties intend to combine businesses within a single surviving entity. • Asset acquisition: In an asset acquisition, the buyer purchases specific assets (and sometimes liabili - ties) from the target company rather than acquiring the company itself. This structure is typically used when the buyer intends to acquire particular busi - ness assets instead of the entire entity. 2.2 Primary Regulators M&A transactions in Indonesia are regulated by sev - eral authorities, depending on the nature of the trans - action and the sector involved. The primary regulators include: • The Ministry of Law (MoL): The MoL serves as the primary corporate authority responsible for administering company-related matters. Corporate actions arising from an M&A transaction, such as amendments to the articles of association (AoA), changes in shareholding structure and corporate restructuring, must be recorded with the MoL
through the corporate registration system (Legal Entity Administration System). • The Ministry of Investment and Downstream Industry (BKPM): This authority oversees foreign investment compliance, including adherence to the Positive List and foreign ownership limitations, as well as licensing matters for foreign-invested companies. • The Indonesian Competition Commission (KPPU): The Indonesian Competition Commission ( Komisi Pengawas Persaingan Usaha , or KPPU) reviews mergers, consolidations and acquisitions that meet certain asset or turnover thresholds to assess potential anti-competitive effects under Indonesian competition law. • Financial Services Authority (OJK): The Financial Services Authority ( Otoritas Jasa Keuangan , or OJK) regulates M&A involving public companies and financial institutions, including tender offers, disclosure obligations and change-of-control requirements. • Sector - specific: Depending on the industry, addi - tional approvals may be required from the relevant ministries or regulators, such as the Ministry of Communication and Digital Affairs, Ministry of Energy and Mineral Resources (MoEMR), or Minis - try of Transportation. 2.3 Restrictions on Foreign Investments In principle, business fields are open to foreign invest - ment unless they are specifically restricted or reserved under Presidential Regulation (PR) No. 10 of 2021 regarding Investment Business Fields, as amended by PR No. 49 of 2021, generally known as Indonesia’s Positive List. Indonesia’s Positive List categorises business fields into the following categories: • business fields that are fully open to foreign invest - ment – which allow foreign investors to hold up to 100% ownership subject to any applicable sector- specific regulations; • business fields that are open to foreign investment subject to certain conditions – which may include foreign ownership caps, mandatory partnerships with co-operatives or micro, small and medium-
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