PRINT THIS PAGE Guide to mergers & acquisitions: Indonesia18/10/2006. Source: Baker & McKenzie.
Indonesia's jurisprudence is based on the European civil law system, says Baker & McKenzie. This difference, from many other jurisdictions in the region, together with ongoing regulatory changes, requires careful consideration of the issues that arise in mergers and acquisitions. Indonesian law is constantly changing and many provisions in laws, in the absence of implementing regulations, are not always clear. In addition we note that in the near future it is likely that there will be amendments to existing laws or new laws (including, amongst others, the Company Law, the Investment Law and the Bankruptcy Law).
Practice and procedure
The practice, procedure and policy of relevant Indonesian government agencies, including the Ministry of Law and Human Rights, Bank Indonesia, the Capital Markets Supervisory Agency (Bapepam) and the Capital Investment Coordination Board (BKPM) will be as important in consummating a transaction as the Indonesian laws governing M&A.
Company Law and M&A Regulations
The Company Law (the Company Law) and Government Regulation No. 27 of 1998 (the M&A Regulation") set out a statutory framework for the combination of businesses conducted through limited liability companies.The Company Law emphasizes protection of minority shareholders in particular, as well as the interests of the company, its employees, the interests of society and fair competition.
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