A Share Pledge Agreement Indonesia is one of the most crucial security instruments used in business financing, foreign investment, joint ventures, and corporate debt transactions in Indonesia. Whether you are a lender, investor, venture capitalist, private equity firm, or business owner, understanding how share pledges work will determine how secure your investment truly is. With […]
Over the past decade, Indonesia has undergone a significant transformation in tax administration. The government’s commitment to strengthening fiscal transparency, driven by the Harmonized Tax Law (HPP Law) and the introduction of digital tax systems, has made corporate tax behaviour a central focus of regulatory oversight. Companies that once viewed taxation merely as a compliance […]
On 11 September 2025, the Ministry of Industry of the Republic of Indonesia (MOI) issued MOI Regulation No. 35 of 2025 concerning Provisions and Procedures for Certification of Domestic Component Levels (Tingkat Komponen Dalam Negeri, TKDN) and Company Utilisation Point Ratings (Bobot Manfaat Perusahaan, BMP). This regulation will take effect on 11 December 2025, replacing […]
What is Suspension of Debt Payment (PKPU)?
A legal process in Indonesia that allows debtors to propose a restructuring plan to its creditors to avoid bankruptcy.
What is Bankruptcy?
It is a legal status declared by the commercial court for a debtor who is unable to pay its debt when they fall due and whose financial condition is deemed irreparable. This process involves liquidating the debtor’s asset to pay off creditors.
What is the prevailing law of Suspension of Debt Payment (PKPU) and Indonesian Bankruptcy matters?
Indonesian Law Number 37 of 2004, and related regulations.
What are the criteria of Debtor to be declared under Suspension of Debt Payment (PKPU) or Bankruptcy status?
Debtor shall have at least 2 (two) creditors and have failed to pay at least one debt that is due and payable, and the debt criteria can be proven simply.
Who may file a Suspension of Debt Payment (PKPU and Bankruptcy petition?
Both debtor and creditor are eligible to file the petition to Indonesian Commercial Court.
What is the role of Administrator and Receiver?
The Administrator is appointed by commercial court to carry its duty and supervised by a Supervisory Judge during Suspension of Debt Payment (PKPU) process. While the Receiver runs its duty and supervised by a Supervisory Judge during Bankruptcy process.
What happens during PKPU process?
Creditors cannot take enforcement actions against debtor; an Administrator is appointed to oversee the process and a restructuring plan is proposed and voted on by creditors.
Can I settle debts for less than what I owe through PKPU?
Yes, PKPU allows for negotiation with creditors, and it is possible to settle debts for a reduced amount if an agreement is reached.
What if a PKPU plan is rejected by creditors?
The court may declare debtor bankrupts, and debtor’s assets could be liquidated to pay off debts.
How long does the PKPU process take?
The Temporary PKPU period is 45 days, which can be extended to a maximum of 270 days (Permanent PKPU) upon approval if a feasible restructuring plan is in progress. This provides ample time to negotiate and implement a debt repayment strategy.
What happens if Restructuring Plan (Proposal) during PKPU process is approved?
The Restructuring Plan (Proposal) becomes legally binding, and creditors must adhere to the agreed-upon terms. The Debtor will follow the new repayment schedule as proposed in Restructuring Plan, which provides relief and helps stabilize its financial situation.
What happens to my business during bankruptcy?
A Receiver will manage and liquidate your business assets to pay off creditors.
Can I appeal a bankruptcy decision?
Yes, within a certain timeframe and if a bankruptcy status comes directly from a petition of bankruptcy.
How can I prevent my business from going bankrupt?
Timely debt restructuring, effective financial management, and utilizing legal protections like PKPU can help prevent bankruptcy. Engaging our legal services early can provide the guidance needed to avoid financial insolvency.
How does bankruptcy impact my personal assets as a business owner?
For incorporated entities, bankruptcy generally affects the company’s assets only. However, for sole proprietorships or personal guarantees, your personal assets may be at risk. We can advise on the best course of action to protect your interests.
Can I recover from bankruptcy and start a new business?
Yes, once your bankruptcy proceedings are completed, you can start anew. Bankruptcy laws aim to give individuals and businesses a fresh start, though there may be restrictions and considerations to address.
How can I ensure a successful PKPU process?
Success depends on presenting a feasible Restructuring Plan, effective negotiations, and legal compliance. Engaging our experienced lawyers increases your chances of a favorable outcome, providing strategic advice and representation.
How do I start the process of debt restructuring or bankruptcy?
Contact us for a consultation. We will assess your situation, provide legal advice, and guide you through the necessary steps to initiate debt restructuring, PKPU, or bankruptcy proceedings.
What are common challenges in legal due diligence in Indonesia?
Challenges include navigating complex regulatory environments, language barriers, and ensuring comprehensive access to relevant documents and information.
How can your firm assist with legal due diligence?
Our firm provides expert legal due diligence services by meticulously reviewing and analyzing all pertinent legal documents and compliance matters, offering insights and recommendations to support your business decisions.
How does legal due diligence impact negotiations?
Findings from due diligence can influence the terms of negotiations, including price adjustments, indemnity clauses, or changes in deal structure to address identified risks.
What are the potential risks of skipping legal due diligence?
Skipping due diligence can lead to unforeseen legal liabilities, compliance issues, and financial losses. It may also affect your ability to make informed decisions or negotiate favorable terms.
Can legal due diligence be customized based on the industry?
Yes, due diligence can be tailored to address industry-specific risks and regulations, such as those relevant to manufacturing, technology, or financial services.
How is confidentiality maintained during the due diligence process?
Confidentiality is ensured through strict internal controls, non-disclosure agreements, and secure handling of sensitive information throughout the review process.
What are the costs associated with legal due diligence?
Costs vary depending on the scope and complexity of the review. We provide transparent pricing and detailed cost estimates based on your specific needs.
Can due diligence findings be used in future legal proceedings?
Yes, findings can be used as evidence in legal disputes or regulatory matters, helping to support your case or demonstrate compliance.
What happens after the due diligence process is completed?
After completion, we provide a detailed report summarizing findings, potential risks, and recommendations. We also offer guidance on addressing any issues identified.
Is legal due diligence required for all types of transactions?
While not always mandatory, due diligence is highly recommended for major transactions such as mergers & acquisitions, or investments to mitigate risks and ensure informed decision-making.
Employees are entitled to 12 days of paid annual leave after completing one year of continuous service with the same employer. This entitlement is separate from public holidays and must be provided in compliance with company regulations or employment contracts.
Why is a Tax Diagnostic Review important?
Conducting a Tax Diagnostic Review ensures your business is fully compliant with Indonesian tax laws, minimizes the risk of penalties, and helps optimize your tax obligations.
What happens if the review identifies issues?
If any issues are found, we provide clear, actionable recommendations to address them. Our team also assists with implementing these solutions to ensure compliance.
What are the common issues identified during a Tax Diagnostic Review?
Common issues include underreported income, incorrect tax rate applications, missed deadlines, improper deductions, and misinterpretation of tax laws.
Can a Tax Diagnostic Review help with past tax audits?
Yes, the review can identify areas that may have been overlooked in past audits and help you prepare for any future audits by ensuring compliance and addressing any lingering issues.
How does a Tax Diagnostic Review benefit my business?
It helps you avoid costly penalties, ensures compliance with tax laws, and identifies opportunities for tax savings and optimization.
What types of businesses can benefit from a Tax Diagnostic Review?
Businesses of all sizes and industries can benefit from a Tax Diagnostic Review, especially those with complex tax structures, frequent transactions, or a history of tax audits.
Will the Tax Diagnostic Review impact my current tax filings?
The review itself doesn’t impact your current filings, but it may reveal areas that require adjustments in future filings or amendments to past returns to ensure accuracy.
How does a Tax Diagnostic Review differ from a tax audit?
A Tax Diagnostic Review is a proactive, voluntary assessment conducted by your chosen tax professionals, focusing on compliance and optimization. A tax audit, on the other hand, is an official examination conducted by tax authorities.
Can the review identify opportunities for tax savings?
Absolutely. Part of the review process involves identifying legal tax-saving opportunities, such as unclaimed deductions, credits, and incentives that your business may qualify for.
Will a Tax Diagnostic Review prevent future tax penalties?
While no review can guarantee the complete elimination of future penalties, a thorough Tax Diagnostic Review significantly reduces the risk by identifying and addressing potential issues proactively.
What is the outcome of a Tax Diagnostic Review?
The outcome is a comprehensive report detailing our findings, along with practical recommendations to enhance compliance, reduce risks, and optimize your tax obligations.
Can the review address industry-specific tax concerns?
Yes, our team tailors the review to your specific industry, addressing any unique tax challenges or regulations that apply to your business sector.
Yes, a foreign marriage can be recognized in Indonesia under certain conditions. It must comply with the laws of the country where it took place and meet specific requirements outlined by Indonesian law, such as registration with Indonesian government authorities and Indonesian court.
