Major overhaul of Indonesia Merger Regulation
19 April 2023
![Insight Hero Image](https://ashurstcd.azureedge.net/-/media/Ashurst/Images/Site/R009046_Insights-Generic-1-1440x450.jpg?h=450&w=1440&rev=26cb3f9eebdd45d78d3297c2eb3f5191&hash=DB4650C74A5B82A1714B9EAB7CF0C35E)
On 6 April 2023, the ICC issued the following new regulations which introduce significant changes to Indonesia's merger control regime:
The Merger Regulation took effect from 31 March 2023. The Tariff Regulation will take effect from 5 May 2023.
The Merger Regulation makes a number of notable amendments to Indonesia's merger control regime. The key changes are set out in the table below.
new merger regulation | previous position |
---|---|
Quantitative notification criteria
| Quantitative notification criteria
|
Foreign to foreign transactions All relevant parties to the transaction must have assets and/or generate sales/turnover in Indonesia. | Foreign to foreign transactions All relevant parties to the transaction must have assets/turnover in Indonesia; however if only one party has assets/turnover in Indonesia, the other party must have a sister company having assets/turnover in Indonesia. |
Online notification portal Notifying parties must register an account and submit merger notifications online through an electronic portal on the ICC's website (available on Indonesian business days from Monday to Friday between 9am to 2pm Jakarta time). Note. The online portal is not yet functional as of the date of publication of this article. | Physical submission of notification Parties are technically required to submit filings in physical copy (by courier) to the ICC's offices and soft copy by email. However, since the pandemic, the ICC began accepting submission by email only (and are still accepting submissions by email only currently). |
Pre-notification review period On receipt of a notification, the ICC must now review a filing for completeness within 3 business days. Note. If a filing is not complete, we expect the ICC will have the power to "stop the clock" on the review period. | Pre-notification review period On receipt of a notification, the ICC must review a filing for completeness within 60 business days. |
The Tariff Regulation introduces a fee for merger filings payable to the ICC. The merger filing fee will be calculated according to the following formula:
0.004% x the value of assets or sales turnover that crosses the threshold, whichever is the lower. The amount payable will be capped at IDR 150 million (c. USD 10,000)
The assets and turnover value are based on the Group-wide assets or turnover of the relevant parties to the transaction.
The filing fee may be waived (in part or full) where a transaction is found to: (a) support SME enterprise development; (b) extraneous circumstances mean that the fee cannot be paid; or (c) the transaction concerns a government mandate. It is unclear how the ICC will exercise its discretion in determining whether the filing fee may be waived or when the filing fee needs to be paid. We expect that these issues will be clarified under separate regulations.
As a result of the revised notification criteria, considerably fewer deals are expected to be notifiable in Indonesia. Foreign to foreign transactions must also have a local nexus (by way of relevant parties' having turnover or assets in Indonesia). In addition, transactions that are filed in Indonesia will have the benefit of a quicker pre-notification review process (ie, 3 business days versus 60 business days).
These amendments come as a welcome change for global businesses who no longer have to be concerned about notifying transactions in Indonesia just because the value of their worldwide assets exceed the thresholds.
Authors: Angie Ng, Partner; Dion Alfadya, Partner; Adelle Elhosni, Senior Associate; Indra Sudrajat, Associate; Chelsea Toner, Associate
The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
Readers should take legal advice before applying it to specific issues or transactions.
Sign-up to select your areas of interest
Sign-up