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 […]
To register a foreign marriage in Indonesia, you typically need to submit a marriage certificate issued by the foreign country’s competent authority to the Indonesian Civil Registry Office (Dinas Kependudukan dan Catatan Sipil). Additional documents may be required depending on local regulations. If you do not register it and it has been exceeded by more than 1 (one) year, registration is legally required through the Indonesian court mechanism.
Non-compete clauses are not explicitly regulated under Indonesian law, but they may be included in employment contracts. However, their enforceability depends on the specific terms, reasonableness of the restrictions, and the protection of the employee’s rights to earn a livelihood.
Prenuptial Agreement, often referred to as “Perjanjian Pra Nikah” in Indonesian, is a legal contract entered into by couples before marriage. It outlines the rights and responsibilities of each party regarding property ownership and distribution, financial arrangements, and other assets in the event of divorce.
When should I consider Tax Due Diligence?
Tax Due Diligence is crucial during mergers, acquisitions, company restructuring, or when preparing for a sale. It ensures you have a clear understanding of the company’s tax position before making critical decisions.
What are the potential outcomes of Tax Due Diligence?
Our findings will highlight any tax risks, compliance issues, or areas where improvements are needed. We provide recommendations to address these issues, helping you make informed decisions.
What happens if tax issues are found during Due Diligence?
If tax issues are identified, we’ll work with you to develop strategies to mitigate these risks. This may involve negotiating with the other party in the transaction or addressing the issues before proceeding.
Can Tax Due Diligence prevent future tax disputes?
While it can’t guarantee immunity from future disputes, Tax Due Diligence significantly reduces the risk by ensuring that any existing issues are identified and addressed early on.
Can Tax Due Diligence affect the valuation of a company?
Yes, Tax Due Diligence can impact a company’s valuation. Unresolved tax issues or significant liabilities discovered during the process may lead to adjustments in the purchase price or deal terms.
What are the common challenges in Tax Due Diligence in Indonesia?
Challenges include navigating complex tax regulations, incomplete or inaccurate financial records, and historical non-compliance.
How does Tax Due Diligence differ from a standard financial audit?
A financial audit focuses on the accuracy of financial statements, while Tax Due Diligence specifically examines tax compliance and risks. The two processes complement each other but serve different purposes.
What is a PT PMA?
A PT PMA is a foreign-owned company in Indonesia, allowing international investors to own shares and operate within Indonesia under specific regulations.
What is a PT PMDN?
PT PMDN is a company fully owned by Indonesian nationals or entities and operates under local investment laws with fewer restrictions than PT PMA.
What is a Representative Office (RO)?
RO is a non-revenue-generating office set up by foreign companies for liaison, market research, or promotional activities in Indonesia.
What is a Permanent Establishment (PE)?
A PE is a foreign company’s local business presence in Indonesia, taxed similarly to local companies and used for operational activities.
What is the minimum number of shareholders required for PT PMA and PT PMDN?
Both PT PMA and PT PMDN require at least two shareholders.
What are the capital requirements for PT PMA and PT PMDN?
PT PMA requires a minimum of IDR 10 billion in capital, while PT PMDN has no specific minimum but must follow general corporate laws.
Can foreigners be involved in PT PMA?
Yes, foreigners can be shareholders and directors in PT PMA, though restrictions apply in certain sectors.
What taxes apply to PT PMA, PT PMDN, RO, and PE?
PT PMA and PT PMDN are subject to corporate taxes and VAT; PEs are taxed on local income, while ROs are not taxed as they don’t generate revenue.
Can a PT PMA operate in all business sectors in Indonesia?
No, certain sectors are restricted or closed to foreign investment under the Negative Investment List. It’s essential to verify sector-specific regulations.
Is local partnership mandatory for a PT PMA?
Not necessarily, but in some sectors, foreign investors must partner with a local entity or individual, depending on the industry’s regulations.
What documents are required to establish a PT PMA?
Key documents include Articles of Association, shareholder and director IDs, a registered office address, and compliance with sectoral licenses.
Can an RO transition into a PT PMA?
Yes, but the process requires establishing a new legal entity (PT PMA) and cannot simply be converted; it involves fulfilling investment requirements.
Can an RO hire employee?
Yes, an RO can hire local staff but is limited in terms of its operational scope since it cannot conduct direct business activities.
Are there industry-specific licenses required for PT PMA or PT PMDN?
Yes, many industries require specific permits or licenses in addition to general company registration, such as those for finance, construction, or mining.
What are the reporting obligations for PT PMA and PT PMDN?
Both must submit annual financial reports, tax filings, and comply with local labor and employment reporting to relevant authorities.
What is the difference between a PE and a branch office?
PE is a local taxable entity for foreign companies engaged in certain business activities, while a branch office is not common in Indonesia except for specific industries like banking.
