INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat, Gustaaf Reerink and Adri Dharma, ABNR Counsellors at Law
2. Recent Developments and Market Trends 2.1 Current Economic, Political and Business Climate The Indonesian government has issued GR 28/2025, replacing the previous Government Regulation No 5 of 2021 on the Implementation of Risk Based Business Licensing, to refine and streamline the national busi - ness licensing framework. The new regulation seeks to enhance clarity, consistency and efficiency in the licensing process. Following its issuance in October 2025, the BKPM enacted Regulation No 5 of 2025 on the Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facility through the Electronically Integrated Business Licensing Sys - tem (“BKPM Reg 5/2025”), which replaces BKPM Regulation No 4 of 2021. Key updates include the relaxation of the minimum paid-up capital for foreign investment companies from IDR10 billion to IDR2.5 billion, adjustments to the minimum investment value across several sectors – including food and beverage (F&B), real estate, accommodation and agriculture – and changes to the reporting period and deadline for the mandatory periodical investment activity report. Updates will be made to the OSS system and the Indonesian national single window to ensure align - ment with the new regulatory framework. The most common structure used for transactions in Indonesia is share acquisition. This allows a foreign investor to invest directly in Indonesia and control its investment in an Indonesian company that it acquired by way of share ownership. There are two approaches: • acquisition through the board of directors (BOD), achieved through subscription to new shares in the company by a foreign investor; and • direct acquisition of shares by way of the sale and purchase of shares in a company between an existing shareholder and a foreign investor. 3. Mergers and Acquisitions 3.1 Transaction Structures
• Low risk: businesses in this category only need to obtain a business identification number ( Nomor Induk Berusaha NIB). • Medium risk: These businesses require an NIB and a standards certificate. This category is divided into medium-low risk (requiring a self-assessed standards certificate) and medium-high risk (requir - ing a verified standards certificate). • High risk: High-risk businesses must obtain an NIB and a business licence, as well as additional permits or approvals. For certain sectors, however, the business will be mon - itored directly by the ministries/agencies concerned, and the requisite licensing will also be issued by them (instead of via the OSS system), such as for banking and financial services, which are under the supervi - sion of the Financial Services Authority ( Otoritas Jasa Keuangan (OJK)) and the central bank, Bank Indo - nesia. Nonetheless, business undertakings engaging in these business sectors would still be required to Businesses must observe limitations on foreign own - ership where applicable. In principle, pursuant to Presidential Regulation No 10 of 2021 on Business Fields for Investment, as amended by Presidential Regulation No 49 of 2021 (the “Investment List”), all business fields are open to FDI, except those: register with the OSS system. Foreign Investment Limitations • declared closed to investment as per the Indone - sian Investment Law and the Investment List; or • reserved for the central government. Business sectors open to investment are also divided into: • priority sectors, which are entitled to specific fiscal or non-fiscal facilities; • those that are reserved or require partnership with a co-operative and micro, small or medium-sized enterprise; • those subject to certain requirements, such as a limitation on foreign ownership; and • “others” (100% open to FDI).
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