Frequently Asked Questions

What is a Company Deed of Amendment?

A Company Deed of Amendment is a legal document that updates or changes the original company deed, reflecting alterations in company structure, name, address, or other key details.

What is the difference between a Deed of Amendment and a new company establishment?

A Deed of Amendment updates an existing company’s details, while a new company establishment involves creating a new legal entity with its own deed.

When is a Deed of Amendment necessary?

It is needed when there are significant changes in the company’s management, business activities, address, or when updating the company’s capital structure.

What are the benefits of amending the company deed?

It ensures that the company’s legal documents reflect the current business structure and operations, which can be crucial for legal compliance and business transactions.

What happens if the Company Deed of Amendment is not filed?

Failure to file the amendment may result in discrepancies between the company’s actual situation and its legal documents, which can lead to compliance issues and legal complications.

Can amendments be made to a company’s articles of association without changing the deed?

No, changes to the articles of association generally require an amendment to the company deed to reflect these changes officially.

What are the types of Company Liquidation in Indonesia?

liquidation can be either voluntary or involuntary. Voluntary liquidation occurs when the company’s shareholders decide to wind up the company, while involuntary liquidation is initiated by a court order due to insolvency or other legal reasons.

What are the steps involved in liquidating a company?

The main steps include: Board of Directors Resolution, Appointment of Liquidator, Notification, Settlement of Debts, Asset Distribution, Final Report and Deregistration.

How long does the liquidation process take?

The process can vary depending on the complexity of the company’s affairs and the efficiency of the liquidator, but it typically takes between 6 to 12 months, or more.

Can the company’s debts be waived during liquidation?

No, the company must settle all its debts before it can proceed with liquidation. If there are insufficient assets to cover the debts, the company will be declared insolvent.

Can the company’s directors or shareholders be held liable after liquidation?

Directors or shareholders are generally not liable beyond their investments. However, if misconduct or fraud is involved, they may face legal consequences.

Are there any tax implications during liquidation?

Yes, the company may need to settle any outstanding taxes.

What happens if the company’s assets are insufficient to cover its liabilities?

If assets are insufficient, the company will be declared insolvent. The liquidator will follow the legal process for insolvency.

What is the process for acquiring property in Indonesia?

The process involves several key steps: identifying and assessing the property, conducting due diligence, negotiating terms, drafting and signing a Sale and Purchase Agreement, and completing the transfer of ownership through the relevant land office. Legal consultation is crucial to ensure compliance with Indonesian regulations.

Can foreigners’ own property in Indonesia?

Foreigners cannot directly own freehold land in Indonesia. However, they can acquire property through a long-term leasehold arrangement or through a foreign investment company (PT PMA). Consult with our firm to explore the best options.

What is the difference between Hak Milik, Hak Guna Bangunan, and Hak Pakai?

Hak Milik (Freehold Title): Full ownership, available only to Indonesian citizens.

Hak Guna Bangunan (Building Rights): Allows construction and use of land for up to 30 years, extendable.

Hak Pakai (Usage Rights): Allows use of land for specific purposes, often for up to 25 years, extendable.

What should be included in a Sale and Purchase Agreement?

The agreement should detail the property description, purchase price, payment terms, timeline, obligations of each party, and any conditions precedent. Our legal team ensures all necessary elements are covered to protect your interests.

What happens if there is a dispute over property ownership?

Disputes can be resolved through negotiation, mediation, or legal proceedings. It’s crucial to address any disputes promptly and seek legal advice to protect your interests. Our firm offers expert guidance and representation in property disputes.

How can your firm assist with property transactions?

We provide comprehensive legal services, including due diligence, drafting and reviewing agreements, ensuring regulatory compliance, and handling all legal aspects of property acquisition to ensure a smooth and secure transaction.

What types of intellectual property are protected under Indonesian law?

In Indonesia, intellectual property is protected under several categories: trademarks, copyrights, patents, industrial designs, geographical indications, and trade secrets.

How do I register a trademark in Indonesia?

To register a trademark, you must file an application with the Directorate General of Intellectual Property (DGIP). The process involves submitting a trademark application, undergoing an examination, and addressing any objections or oppositions before receiving the registration certificate.

What is the duration of trademark protection in Indonesia?

It is lasts for 10 years from the date of registration. It can be renewed indefinitely for subsequent 10-year periods.

How do I protect my copyright in Indonesia?

Copyright protection in Indonesia is automatic upon creation of the work, but registering it with the DGIP provides additional legal advantages. Copyright covers literary, artistic, and scientific works, including software and multimedia content.

What are the requirements for patent registration in Indonesia?

To obtain a patent, your invention must be novel, involve an inventive step, and be industrially applicable. The process involves submitting a detailed patent application, undergoing an examination, and meeting any necessary requirements before the patent is granted.

Can I enforce my intellectual property rights in Indonesia?

Yes, intellectual property rights can be enforced in Indonesia through civil lawsuits or administrative actions. Our firm can provide legal assistance to navigate the enforcement process effectively.

How long does the intellectual property registration process take?

The registration process varies by type of intellectual property. Generally, trademark registration takes 8-12 months, while patents can take up to 2 years or more.

Can foreign entities register intellectual property in Indonesia?

Yes.

How often do I need to renew my intellectual property rights?

Trademark rights need to be renewed every 10 years. Patents are valid for 20 years from the filing date, while copyright does not require renewal but lasts for the lifetime of the author plus 70 years.

Are there any international treaties that Indonesia is part of regarding intellectual property?

Yes, Indonesia is a member of several international treaties, including the Paris Convention for the Protection of Industrial Property and the Berne Convention for the Protection of Literary and Artistic Works. These treaties facilitate the protection of intellectual property across member countries.

Can I transfer my intellectual property rights to another party?

Yes, intellectual property rights can be transferred through assignments or licensing agreements. Such transfers must be recorded with the DGIP for trademarks, patents, and industrial designs to be legally effective.

What are the key regulations governing M&A in Indonesia?

Key regulations include the Company Law (Law No. 40 of 2007), the Capital Market Law (Law No. 8 of 1995), and regulations from OJK and KPPU. These laws cover everything from corporate restructuring to competition issues and disclosure requirements.

Are there any specific regulatory approvals required for M&A in Indonesia?

Yes, M&A transactions often require approvals from OJK for listed companies and may also need to be reviewed by KPPU to ensure they do not violate antitrust laws. Sector-specific approvals might also be necessary depending on the industry.

How does the Indonesian Competition Commission (KPPU) impact M&A deals?

KPPU reviews M&A transactions to prevent anti-competitive practices and monopolistic behavior. Transactions that meet certain thresholds or could impact market competition may need to be reported and reviewed by KPPU.

What are the tax implications of M&A in Indonesia?

M&A transactions can trigger various tax obligations, including corporate income tax, value-added tax (VAT), and transfer taxes.

Can foreign investors participate in M&A transactions in Indonesia?

Yes, foreign investors can participate, but they must adhere to regulations governing foreign ownership and investment. This includes compliance with the Foreign Investment Law and sector-specific rules.

What role does legal counsel play in M&A transactions?

Legal counsel provides critical support throughout the M&A process, including due diligence, contract negotiation, regulatory compliance, and managing potential legal risks.

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.

What are General Corporate services??

General Corporate services encompass assistance with day-to-day business operations, including corporate structuring, compliance with local laws, regulatory matters, and corporate governance.

What is the scope of Legal Advisory in Indonesia?

Legal Advisory includes offering expert opinions on Indonesian law, helping businesses navigate legal complexities, and providing strategic guidance for minimizing risks in transactions or operations.

Why is Legal Compliance important in Indonesia?

Legal Compliance ensures that your business follows applicable laws and regulations in Indonesia, helping avoid legal disputes, penalties, and potential shutdowns due to non-compliance.

How can you help with company formation in Indonesia?

We assist with setting up different types of companies, such as PT PMA, PT PMDN, Representative Offices (RO), Permanent Establishment (PE), ensuring that your business structure complies with Indonesian corporate laws.

How often should companies conduct a legal compliance review?

It is recommended to conduct a legal compliance review regularly or when there are significant regulatory changes, ensuring the business continues to operate within the bounds of Indonesian law.

What happens if a company fails to meet legal compliance standards?

Failure to comply can result in penalties, legal disputes, or suspension of business activities. Staying compliant helps safeguard your business from these risks.

What should businesses know about labor law compliance in Indonesia?

Businesses need to comply with labor laws concerning employment contracts, employee rights, and benefits. We ensure your HR practices align with Indonesian labor regulations.

What is Contract Drafting?

Contract drafting involves creating legally binding agreements tailored to the needs of the parties involved, ensuring all essential terms and conditions are clearly defined.

Why is contract review important?

Contract review helps identify potential risks, clarify obligations, and ensure that the contract aligns with your legal and business interests, preventing future disputes.

What should be included in a contract?

Key elements include the parties’ identities, terms of the agreement, rights and obligations, payment details, dispute resolution mechanisms, and termination conditions.

Do contracts in Indonesia need to be in Bahasa Indonesia?

Yes, under Indonesian Law No. 24 of 2009, contracts involving Indonesian entities must be drafted in Bahasa Indonesia. However, bilingual contracts are also common for international dealings.

How long does it take to draft or review a contract?

The timeframe depends on the complexity of the contract. Simple agreements can be handled in days, while more complex contracts may take longer due to negotiations or specific legal considerations.

Can I modify a contract after signing it?

Yes, contracts can be modified post-signature, but amendments must be agreed upon by all parties and documented in writing to be enforceable.

What are common mistakes in contract drafting?

Common mistakes include ambiguous terms, missing key clauses, overlooking applicable laws, and failing to address dispute resolution.

Do I need a lawyer for every contract?

While not legally required, consulting a lawyer ensures the contract is legally sound, protects your interests, and avoids potential pitfalls.

What happens if a contract term is violated?

If a contract term is violated, it constitutes a breach. The non-breaching party may seek legal remedies such as damages, contract termination, or specific performance, depending on the contract’s terms.

What are the risks of using template contracts?

Templates may not account for the unique aspects of your transaction or relationship, which can lead to gaps in protection or unforeseen legal risks.

Is electronic signature valid in Indonesia?

Yes, electronic signatures are legally recognized in Indonesia under the Electronic Information and Transactions Law, provided they meet certain requirements.

Can international contracts be governed by foreign law?

Yes, parties can choose foreign law to govern their contract. However, the contract must still comply with Indonesian law when it involves Indonesian parties or is executed in Indonesia.

What should I look for in a contract review?

Look for clarity in obligations, fairness in terms, compliance with Indonesian laws, potential risks, and whether your rights and interests are adequately protected.

What is a Legal Opinion?

A Legal Opinion is a formal written document from a lawyer that provides legal advice or interpretation on specific legal issues based on the applicable laws and regulations.

When do I need a Legal Opinion?

You need a Legal Opinion when facing complex legal issues, entering contracts, disputes, or when clarity on specific legal points is necessary for business decisions.

What are the typical contents of a Legal Opinion?

A Legal Opinion usually includes an introduction, the legal context, a detailed analysis of the relevant laws, and the lawyer’s conclusions and recommendations.

What areas of law do you provide Legal Opinions on?

We cover various areas, including corporate law, foreign investment, employment law, business disputes, and regulatory compliance in Indonesia.

Are Legal Opinions required for business transactions in Indonesia?

While not always mandatory, Legal Opinions are often requested in such business disputes and major transactions like mergers & acquisitions, or financing to clarify legal risks.

How do Legal Opinions assist foreign investors in Indonesia?

Legal Opinions help foreign investors navigate Indonesian regulations, ensuring their investments comply with local laws and reducing the risk of legal issues.

How long does it take to receive a Legal Opinion?

The timeframe depends on the complexity of the issue, typically ranging from a few days to a couple of weeks.

What is the cost of obtaining a Legal Opinion?

Costs vary based on the complexity of the legal issue and the required research. We offer transparent fee structures after understanding your needs.

Do you provide Legal Advice for startups and new businesses?

Yes, we regularly advise startups and new businesses, particularly regarding compliance, contracts, and foreign investment regulations in Indonesia.

Can Legal Opinions be used in court?

Yes, Legal Opinions can serve as important references or supporting documents during court proceedings or disputes, but they are not legally binding.

What is a Company Registry document?

A Company Registry document is a formal record by Indonesian Ministry of Law and Human Rights that contains key information about a registered company in Indonesia, such as its legal name, address, shareholders, and directors.

Why is it important to check a company’s background before doing business?

Conducting a background check helps you verify a company’s legitimacy and legal standing, minimizing risks and ensuring trustworthiness.

What information can be obtained from a Company Registry search?

You can obtain details like the company’s legal status, registration number, shareholders, board of directors, authorized capital, and business activities.

What should I do if a company’s registry details seem suspicious?

Consult with our lawyers immediately to investigate further and ensure that all necessary legal actions are taken to protect your interests.

Is it possible to check whether a company has legal disputes or cases against it?

Yes, it needs further investigation.

Can I check the history of changes in a company’s structure?

Yes.

What types of company can I conduct background checks?

It is for foreign-owned company in Indonesia (PT Penanaman Modal Asing (PT PMA) and local company in Indonesia (PT PMDN).

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.