Four practitioners. One moderator. One hour of intense discussion.
A working combination of legal and tax expertise, drawn from the two firms with the deepest joint practice on Indonesian cross-border transactions. This podcast by Nusantara DFDL Partnership and PB Taxand is a must see for – Foreign investors, Fund managers, General counsel, Chief financial officers, Tax professionals, and/or for anyone for whom Indonesia is on their investment desk.
Moderator:
Vinay Ahuja – Partner & Managing Director, Indonesia and Singapore with DFDL
Speakers:
- Sri Wahyu Ningsih – Partner · NDP
Regulatory structuring, employment in M&A, and on-the-ground deal execution. - Afriyan Rachmad – Partner · NDP
Cross-border M&A, infrastructure transactions, and disputes — including KPPU and tax court litigation. - Aristo Tjahyadi – Senior Corporate Tax Partner · PBTaxand
Deal structuring, holding structure design, and tax efficiency across Indonesia–Singapore corridors. - Renate Alice – Corporate Tax Partner · PBTaxand
Post-closing compliance, tax indemnities, and exit structuring, with a focus on open-tax-year risk allocation.
A practitioner’s working map of the Indonesian deal.
From the country’s regulatory architecture down to escrow mechanics and the Bahasa Indonesia contract requirement — the structural questions that decide whether a deal closes on time, on terms, and without surprise.
| 1. Attractiveness, and the frictions that come with it | 2. The due diligence gaps that actually matter |
| The two-tier board structure (Directors plus Commissioners), sector-specific foreign ownership caps under the Positive Investment List, Indonesia’s 11 tax categories, and incentives across SEZs, free trade zones, and the IKN new-capital corridor. | Central and regional licensing. Change-of-control employee rights under PP 35/2021 (0.5x standard severance). KPPU thresholds, combined assets over IDR 2.5 trillion or sales over IDR 5 trillion, and the five-year DGT audit window. |
| 3. Indonesia, Singapore, Vietnam: the comparative picture | 4. Where deals slip, and where they surprise |
| Timeline (3–6 months for a manufacturing deal), foreign ownership ceilings, and dispute resolution forums, examined side-by-side so the structuring choice is made on evidence, not instinct. | KPPU antitrust delay. Wrong licence categories. Tax assessments. And the post-acquisition tax dispute timeline that can reach six to seven years from audit through judicial review. |
| 5. Structuring and the holding question | 6. Practical takeaways for the deal team |
| Direct versus indirect acquisition. Singapore hub treaty access, 10% versus 20% withholding tax on dividends. PMK 1/2026 book-value restructuring requirements. Escrow mechanics for open tax-year exposure. | Early legal–tax alignment. Shareholders agreement essentials. Articles of Association scope. The Bahasa Indonesia contract requirement, and the nominee arrangement prohibition that still trips up structuring memos. |
2025–2026 regulatory developments – The rules have moved.
Four developments materially reshape how a deal is structured, documented, and notified in Indonesia today — and a fifth changes how dividends leave the country. Each is addressed directly in the session.
- PMK 1/2026 · 22 Jan 2026
Tax-neutral restructurings, now with a pre-closing documentation gate.
PMK 1/2026 tightens documentation and eligibility requirements for restructurings conducted at book value. Parties must submit specific documentation to the Directorate General of Taxes and receive confirmation of eligibility before the restructuring closes. Non-compliance defaults the transaction to fair-value tax treatment — a materially worse outcome.
| Effective 22 January 2026 · pre-closing DGT confirmation required |
- KPPU Reg 3/2023 +
The post-closing antitrust notification regime is now formalised — with teeth.
KPPU Regulation 3/2023, together with its 2025–2026 implementation updates, sets a hard 30-business-day filing window from closing. Late filing draws IDR 1 billion per day, capped at IDR 25 billion. There is no minimum transaction size — only the combined-asset and combined-sales thresholds matter.
| 30 business days · IDR 2.5T assets / IDR 5T sales · IDR 1bn/day penalty (cap IDR 25bn) |
- IDX rules · early 2026
Free-float minimum raised to 15% — with direct M&A consequences.
The Indonesia Stock Exchange amended its free-float rules in early 2026, requiring listed issuers to maintain a minimum 15% public shareholding. The implications run straight through takeover structuring and any IPO-related M&A — including the timing of squeeze-outs and post-acquisition reorganisations.
| Minimum public float: 15% of listed shares |
- Pillar Two · from 2025
The global minimum tax meets Indonesia’s tax-holiday regime.
Indonesia’s implementation of the OECD Pillar Two global minimum tax from 2025 changes the planning math for in-scope multinational groups. Tax-holiday positions that were efficient pre-Pillar Two may now leak value through top-up tax in other jurisdictions — a recalibration question for every group above the threshold.
- Withholding · baseline
The dividend exit: 20%, 10%, or 0%.
Standard withholding on Indonesian-source dividends without treaty cover is 20%. Under the Indonesia–Singapore treaty the rate typically drops to 10%, subject to beneficial-ownership substance. And under PMK 18/2021, Indonesian-source dividends reinvested in Indonesia within prescribed conditions can attract full exemption — a structural lever that often goes underused.
| 20% · 10% (Singapore treaty) · 0% (PMK 18/2021 reinvestment) |
What you can expect from this podcast?
The session opens on a question worth keeping in mind: why do so many well-resourced foreign acquirers, with strong commercial theses and credible local advisors, find themselves surprised at month four of an Indonesian deal? The panel’s answer isn’t that Indonesia is opaque. It’s that Indonesia is layered, and the layers don’t always behave the way the top one suggests. Central licensing sits above regional licensing. The Positive Investment List runs alongside sector-specific ministerial regulations that can quietly override it. The two-tier board structure, fixed on paper by the company law, in practice often departs from what the Articles of Association seem to describe. Most execution failures, the panellists argue, come from acquirers who diligenced the top layer competently and missed the one beneath.
Much of the hour goes to the seams between legal and tax workstreams, the places where a decision in one quietly constrains the other. The choice to acquire via a Singapore holding company is usually framed as a tax-treaty question, but it has knock-on effects on KPPU notification mechanics, on the change-of-control analysis under PP 35/2021, and on whether the eventual exit can be structured cleanly. The panel walks through several deals where early alignment between counsel and tax advisor would have changed the structuring choice. They also walk through several where it didn’t, and what the cleanup actually looked like.
PMK 1/2026 gets the longest segment, and the most operational detail. The panellists go into what the new pre-closing DGT confirmation actually requires in documentation terms, how realistic the timeline is alongside a competitive auction, and what fallback positions look like when the confirmation arrives late or comes with conditions attached. The cost of getting it wrong, defaulting to fair-value tax treatment on what was intended as a tax-neutral step, is illustrated with worked numbers rather than waved at as an abstract risk.
Two segments cover terrain the agenda only gestures at. The first is the Bahasa Indonesia contract requirement and the nominee arrangement prohibition, both of which look simple on paper and produce recurring disputes in cross-border practice, particularly when standard-form Anglo deal templates get used with minimal local adaptation. The second is the post-closing tax dispute timeline, walked chronologically: audit, objection, tax court, judicial review at the Supreme Court. The panellists are clear that six to seven years is the normal horizon, not the bad case, and they spend time on what that horizon does to tax indemnity scope, escrow tail length, and the way representations and warranties get drafted on the buy-side.
The closing exchange goes back to where it started. Indonesia rewards acquirers who treat structuring as a sequenced exercise: get the legal architecture right first, then layer the tax analysis onto it, then work out the regulatory notifications, then deal with employment and operational integration. The acquirers who try to do those at once are usually the ones being surprised at month four by something a slower sequence would have caught.
