INDONESIA Law and Practice Contributed by: Chandrawati Dewi, Gustaaf Reerink and Bilal Anwari, ABNR Counsellors at Law
2. Jurisdiction 2.1 Notification
The 2021 Investment List indicates: • six business fields are completely prohibited from FDI under the Job Creation Law (narcot - ics, gambling/casinos, harvesting of fish listed in the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES), utilisation or harvesting of coral, chemical weapons, and chemicals that might damage the ozone layer); • 60 business fields are reserved for co-opera - tives (co-ops) and SMEs; • 46 business fields are open to FDI if in part - nership with co-ops and SMEs; and • 37 business fields are subject to specific requirements, which may be classified as: (a) open to FDI but subject to maximum foreign shareholding limit; (b) open to FDI but subject to special ap - proval from the relevant ministry; (c) there is no longer any investment regulat - ed by the provincial government such as in the alcohol/malt beverage industry; and (d) 100% reserved for domestic investors. Several sectoral laws (eg, in banking, non- banking financial services (venture capital, multi-finance, securities companies), insurance, mining, oil and gas, shipping) introduce foreign investment rules and restrictions. It goes beyond the scope of this overview to discuss these sec - toral laws in detail. 1.3 Enforcement Authorities Merger control in Indonesia is enforced by the KPPU.
A post-merger notification is compulsory if all criteria are met. Parties involved in the transac - tion may carry out a voluntary pre-merger notifi - cation. However, even if parties carry out a vol - untary pre-merger notification, the post-merger notification will still be mandatory once the clos - ing of transaction occurs. No exceptions exist. 2.2 Failure to Notify There are penalties for failing to notify the KPPU within 30 business days as of the closing date of transaction. Under the Competition Law and Regulation 57/2010, a late notification penalty of IDR1 billion (approximately USD61,000) per day, with a max - imum of IDR25 billion (approximately USD1.525 million) applies. However, there have been sev - eral occasions where the KPPU indicated that it is considering implementing a new approach for calculating administrative fines, taking into account the profit/turnover-based fines calculat - ing method introduced by Regulation 44/2021. The regulation does not specify the maximum fine for late merger filing and thus this new meth - od 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 sub - mission where the tribunal referenced Regula - tion 44. However, the penalties imposed were less than IDR25 billion. The KPPU’s decisions on violations of the Com - petition Law, including late merger filings, are published on the KPPU’s official website. Infor - mation on penalties can also be found in the KPPU’s news articles and reports, which are also available on their website.
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