Home Blog Fines Await Companies that are Late to Report Merger or Acquisition Activities in Indonesia Secretarial Services Fines Await Companies that are Late to Report Merger or Acquisition Activities in Indonesia InCorp Editorial Team 19 November 2019 4 minutes reading time Table of Contents Certain Threshold for M&A Notification to KPPU Sanctions for Failure to Notify KPPU Strict Enforcement by KPPU How Cekindo can Help with M&A in Indonesia The Indonesian Business Competition Supervisory Commission (KPPU) has enforced its regulation more strictly by imposing fines on companies that fail or late to notify KPPU of a merger or acquisition (M&A) in Indonesia. Under the law of KPPU GR57/2010, all mergers, consolidations or acquisitions that meet certain criteria must be made known to KPPU with notification within 30 working days after the effective M&A transaction. Certain Threshold for M&A Notification to KPPU In accordance with GR57/2010, all investors or companies must report the M&A transactions to KPPU when the asset or sales value thresholds meet the following conditions: A combination of asset exceeding IDR 2.5 trillion in Indonesia; banks have an asset value threshold of IDR 20 trillion. A combination of sales turnover exceeding IDR 5 trillion in Indonesia. The KPPU GR 57/2010 states that the value of asset and sales is calculated based on assets or sales in Indonesia of the following (exports are excluded): The acquiring company The target company The final shareholders of the target or acquiring company All direct and indirect subsidiaries of the final shareholders In other words, the calculation is done based on the combination of asset or sales of the acquiring and the acquired companies in an acquisition; or the total assets or sales of the new company from a merger. The definition of acquisition under the GR57/2010 means a company purchases another company’s shares, resulting in a change of control of the latter company. The purchasing company is in control when it holds more than 50% of another company’s shares. As a result, not only that a company has to reach the specified asset and sales threshold, but a change of control in the acquired company is also required for the acquiring company to notify the KPPU of the said acquisition. Sanctions for Failure to Notify KPPU In the event of failing to report to KPPU within 30 working days of an M&A transaction, the KPPU will impose sanctions on the company: IDR 1 billion (~USD 70,000) each day, up to a maximum of IDR 25 billion (~USD 1.75 million). For private entities, an M&A is considered legally effective upon the receipt of notification from the Minister of Law and Human Rights. As for publicly listed firms, an M&A is deemed legally effective when an M&A report is delivered to the Indonesian Financial Services Authority (OJK). Strict Enforcement by KPPU The KPPU has stepped up to the enforcement of the M&A requirement penalty, particularly in cases of late or failed M&A notifications. Recently, KPPU law enforcement has investigated 12 well-known mergers and acquisitions in Indonesia, with some of them having to pay a daily fine of IDR 25 billion because of delayed M&A transaction notification to KPPU. Some notable cases involve the following companies: PT Plaza Indonesian Realty was fined IDR 1 billion for late reporting of the acquisition of PT Citra Asri Property; PT Nirvana Property was also fined IDR 1 billion for late notification to KPPU for the acquisition of PT Mutiara Mitra Bersama. These cases serve as a warning and reminder to companies in Indonesia that timely notification of M&A transactions to the KPPU is of critical importance. How Cekindo can Help with M&A in Indonesia Embarking upon an M&A transaction is not a decision that can be taken lightly. Every step of an M&A transaction requires meticulous planning and execution and Cekindo can help you achieve that. Cekindo provides you with high quality and comprehensive M&A services with our team of well-qualified professionals and industry experts, ensuring a seamless and successful M&A transaction. Enquire now to learn more by filling in the form below. Read Full Bio Verified by Daris Salam COO Indonesia at InCorp Indonesia With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships. Frequently Asked Questions Is there limited responsibility for shareholders in a PMA company? In a PMA Company in Indonesia, shareholders typically have limited liability, meaning they’re not personally liable for agreements or losses beyond their shareholding, except in certain circumstances. Liability may extend if the company isn’t properly established or if shareholders exploit the company in bad faith, engage in unlawful acts, or deplete company assets to the detriment of creditors. Can an individual or a business organization be a shareholder in a PMA company, and is there a minimum number required? A limited liability corporation is required by Indonesian company law to have two or more shareholders, who may be either a legal entity or an individual. The foreign investor must find a second shareholder to own shares in the PMA firm for investments that are 100% open, which could be an affiliated party. What are the standard regulations regarding employment in Indonesia? The standard regulations state: Minimum salary of IDR 3.9 mil for the Jakarta region 12-day annual leave (minimum) BPJS coverage Holiday allowance Get in touch with us. Lead Form Updates Full NameEmailPlease provide corporate email where possiblePhone NumberOffice SetupWhich city are you planning to expand into?JakartaSemarang/Central JavaBali/LombokBatam/SumateraSurabaya/East JavaOther ProvincesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Package (20% OFF)[SPECIAL PACKAGE] Product Registration + License Holder (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration + Office Service (20% OFF)[SPECIAL PACKAGE] Comprehensive Industrial Package (15% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (25% OFF) + Office Space (Private Office 30% OFF)[SPECIAL PACKAGE] Company Registration + Investor KITAS (25% OFF)[SPECIAL PACKAGE] Accounting + Tax Services+ Annual Fintax Report (20% OFF)[SPECIAL PACKAGE] Payroll Services for Executive Role (20% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -[SPECIAL PACKAGE] Company Registration (20% OFF) + Office Service (25% OFF)[SPECIAL PACKAGE] Company Registration + Micro Finance Services (25% OFF)[SPECIAL PACKAGE] Property Assistance: Due Diligence + AJB Purchase/Lease Agreement (25% OFF)Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesType of Service- Please Select -Business SetupAccounting and TaxHR & Payroll servicesImmigration ServicesProduct Registration and ImportCompliance and Secretarial ServicesBusiness AdvisoryMore ServicesServices Company Registration Renting Virtual and Serviced Office Business and Import Licenses Corporate Recovery and Insolvency Closing of Company (Dissolution) Land and Property Ownership Shelf Company Local NomineeServices Accounting and Tax Reporting Audit and Review Transfer Pricing Compliance Tax RefundHuman Resource Sub Services Payroll Outsourcing Employer of Record Recruitment and HR Establishment Employment ServiceServices Business Visa Work Permit and KITAS Dependent Visa (Spouse and Family) OtherBusiness Visa Subservices Business Visa Visit Visa Visa ExtensionServices Medical Device Beauty (Skincare and Cosmetic) Food and Beverage Health Supplement Household Product Halal Certification TrademarkServices Legal Consultation Legal Agreement Service Due Diligence and Background Check Company Documents RevisionBusiness Advisory Business Advisory Services ESG Reporting & Advisory Internal Audit Risk ManagementMore Services Market Research and Analysis Local Distributor and Partner Bank AccountMessageSubmit What you’ll get A prompt response to your inquiry Knowledge for doing business from local experts Ongoing support for your business Disclaimer The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website. More on Secretarial Services Acquiring Property in Bali: Through Rental or Leasehold? Read more Why SKTTK Certification is Important for Electricity Business Read more How to Draft Conditional Sale and Purchase Agreement of House in Indonesia Read more