INDONESIA Law and Practice Contributed by: Melissa Butarbutar, Ken Prasadtyo, Kevin Yehezkiel and Cindy Caroline, TnP Law Firm
lowed by the leveraging of the assets. How - ever, additional documents and/or actions may be required depending on the assets being acquired. For example, if an acquisition involves lands, the parties must execute a deed of trans - fer of ownership before a land deed officer and, subsequently, register such deed in the Land Registry. 2.2 Primary Regulators In Indonesia, M&A activities are primarily super - vised by the following regulatory agencies: • the Ministry of Law (formerly the Ministry of Law and Human Rights) as the main regula - tor; • the Investment Co-ordinating Board ( Badan Koordinasi Penanaman Modal or BPKM) for investment-related matters; and • the KPPU, to ensure fair competition results from the transactions. Additionally, specific regulators may be involved depending on the line of business of the parties involved in the transactions, eg, the Financial Services Authority ( Otoritas Jasa Keuangan or OJK) for M&A transactions within the financial sector or transactions involving listed compa - nies. 2.3 Restrictions on Foreign Investments In February 2021, Indonesia introduced the “positive investment list” as the new foreign investment policy under Presidential Regulation No. 10 of 2021 on Investment Business Fields, which was later amended by Presidential Regu - lation No. 49 of 2021. This new policy provides for ease of foreign investment and offers a bigger investment opportunity for foreign investors in Indonesia compared to the previous “negative investment list” policy.
Under the new regulation, all business fields are generally open for investment, except for busi - ness fields that are declared closed for invest - ment or business fields that are specifically allocated for, among others, the government or small to medium-sized enterprises. For foreign investors, the new regulation categorises foreign investment into three main categories, namely, business fields that are open subject to certain requirements, business fields that require part - nerships with local MSMEs, and business fields that are completely closed for investment. How - ever, the new regulation limits foreign investors to only engaging in large-scale businesses with an investment value exceeding IDR10 billion, excluding the value of land and building prem - ises. The new regulation particularly restricts seven business fields that are completely closed for investment, as follows: • narcotics cultivation and industry class I; • all forms of gambling and/or casino activities; • fishing of endangered species listed in Appendix I of the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES); • collection or use of coral and utilisation of coral taken from nature, which is used for building material/lime/calcium, aquariums and souvenirs/jewellery, including live or recently dead coral from nature; • chemical weapons manufacturing; • production of chemicals and ozone-depleting substances; and • the alcohol-containing liquor industry, alco - hol-containing beverage industry (wine) and malt-containing beverage industry.
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