INDONESIA Law and Practice Contributed by: Chandrawati Dewi, Gustaaf Reerink and Bilal Anwari, ABNR Counsellors at Law
For foreign-to-foreign transactions, the legally effective date of the transaction will be deter - mined by the law of the respective jurisdictions. The date may be based on the closing date in the agreement between the parties or the date of the government approval in the jurisdiction in which the transaction is taking place. For late notification, the KPPU can impose a penalty of IDR1 billion per day up to a maximum of IDR25 billion. Please also see 2.2 Failure to Notify . The KPPU has issued penalties for late notifica - tions in at least 62 cases – 47 of which occurred in the past five years, indicating an increase in enforcement activity. To the best of the authors’ knowledge, five cases involved foreign-to-for - eign transactions. Recently imposed penalties ranged from IDR1 billion to IDR10.33 billion per transaction. A company was fined a total of IDR20.66 billion for delay in submitting notifications for acquisi - tions of three entities. The highest penalty for a single transaction (IDR12.6 billion) was imposed in October 2019 for a 240-day delay. 3.2 Type of Agreement Required Prior to Notification A binding agreement and legally effective trans - action are required prior to notification. If the transaction is not yet legally effective but the parties have signed a contract, agreement, memorandum of understanding/letter of intent, or any other written documentation confirming their intention to engage in a merger, consoli - dation or acquisition, the parties can submit a consultation to the KPPU – even if the aforemen - tioned documents are not legally binding.
If the parties have not entered into anything in writing, they cannot submit a consultation, but they can engage in a verbal consultation with the KPPU. However, in the case of a verbal con - sultation, the information provided by the KPPU may be very limited – in view of the absence of written materials. 3.3 Filing Fees Filing fees were introduced last year by Regula - tion 20/2023. The fee is calculated based on the following for - mula: 0.004% x the value of assets or sales in excess of the notification threshold (whichever is lower). The value of assets or sales is calculated based on the total asset or sales value of: • the surviving entity, or the consolidating undertaking, or the acquiring undertaking and the acquired undertaking; and • the undertakings that are directly or indi - rectly controlled by the surviving undertaking resulting from the merger, the consolidating undertaking, or the acquiring and acquired undertakings. If both the asset and sales values meet the threshold, the filing fee will be calculated using whichever value is lower and will only be payable if the KPPU finds the transaction is notifiable. However, the regulation pegs the maximum fee at IDR150 million (approximately USD9,150). The notification fee can be reduced to as little as 0% or fully waived based on one or more of the following considerations:
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