INDONESIA Trends and Developments Contributed by: Marshall Situmorang, Audria Putri, Fatya Alesi and Irfan Yusuf, Nusantara Legal Partnership
where regulatory issues often arise not because no licence exists, but because the clinic’s actual opera - tions have evolved beyond what is formally docu - mented. In the event that a foreign business intends to acquire an existing clinic that was previously fully owned by local shareholders, the post-transaction structure should also be assessed against Indonesia’s foreign investment framework. In particular, the company should satisfy the applicable requirements for a For - eign Investment Company/ Perusahaan Penanaman Modal Asing , including the minimum issued and paid- up capital of IDR2.5 billion and the general minimum investment value of more than IDR10 billion per five- digit KBLI per project location, excluding land and buildings. This point is commercially important. In some cases, the target clinic may have been established under an ownership structure, service scope or operational model that was workable for a domestic business but will require adjustment once foreign ownership, new specialisms or group-level integration is introduced. Accordingly, the due diligence process should there - fore cover not only current compliance, but also the future compatibility of the target with the investor’s post-closing plan. 2. Post-completion M&A requirements a. Clinic accreditation A First-Class Clinic must be accredited. Under Arti - cles 3 and 4 of Minister of Health Regulation No. 34 of 2022 on the Accreditation of Community Health Centres, Clinics, Health Laboratories, Blood Trans - fusion Units, Individual Practices of Physicians, and Individual Practices of Dentists (“MoH Reg. 34/2022”), a First-Class Clinic must obtain accreditation within two years after obtaining its business licences and must be re-accredited every five years. To obtain accreditation, a First-Class Clinic must fol - low the procedures below: • The First-Class Clinic must submit a request for an accreditation survey to an accreditation body through the healthcare quality information system administered by the Ministry of Health.
• The accreditation body will conduct the accredita - tion process through an on-site survey and the use of technology, and will submit the survey report to the Director General of Health Services together with its recommendation on the accreditation sta - tus of the First-Class Clinic. • The Director General of Health Services will then determine the accreditation status of the First- Class Clinic by issuing an electronic certificate, which will be valid for five years. As further stipulated under Article 21 of MoH Reg. 34/2022, if a First-Class Clinic fails to obtain accredi - tation, it may request a remedial survey and a deter- mination of accreditation status based on the results of that remedial survey within three to six months after the Director General of Health Services has deter - mined the accreditation status. In the context of an M&A transaction involving an exist - ing First-Class Clinic, investors should verify during the legal due diligence process whether the clinic has already obtained the required accreditation or whether the accreditation process is still ongoing. Failure to obtain accreditation within the required timeline may result in administrative sanctions, which may include written warnings, administrative fines, suspension of certain activities, and revocation of licences (Article 28 of MoH Reg. 11/2025). b. Merger filing Upon completion of an M&A transaction, the Indo - nesian Competition Commission ( Komisi Pengawas Persaingan Usaha , or KPPU) may require a post-com - pletion notification if the relevant transaction meets the applicable thresholds. Under KPPU Regulation No. 3 of 2023 on the Assessment of Mergers, Con - solidations, or Acquisitions of Shares and/or Assets that May Result in Monopolistic Practices and/or Unfair Business Competition, notification is generally required no later than 30 working days after the trans - action becomes legally effective, provided that the transaction results in a change of control and meets the applicable asset and/or sales thresholds. The relevant thresholds are, in summary, as follows:
615 CHAMBERS.COM
Powered by FlippingBook