Scenario: a Vietnamese investor wants to buy 60% of an operating processing company in Java. Indonesia is the odd one out: merger control is post-closing notification — but do not relax, because the positive-list gate at entry is where deals die.
Indonesia: Positive Investment List + OSS-RBA at entry
Under the Job Creation Law (UU Cipta Kerja, consolidated as Law 6/2023) and the Positive Investment List (Presidential Regulation 10/2021, amended by 49/2021), Indonesia flipped from a “negative list” to “open-list” logic: which sectors are open, on what conditions, and the maximum foreign equity — one table tells all. Acquiring an operating company means inheriting the target’s licences on the OSS-RBA system (risk-based licensing): check whether the target’s business lines remain permitted at the post-deal foreign ownership ratio. Many deals die here because the target’s incentives are tied to its old ownership structure.
Merger control: the KPPU — post-closing, unlike the region
Indonesia’s distinctive feature: the Business Competition Supervisory Commission (KPPU) uses post-closing notification above asset/turnover thresholds — unlike Japan, Korea, Thailand and Vietnam, which all require pre-closing filings. “After” does not mean “never”: the KPPU can still investigate and impose structural remedies if the deal lessens competition.
Vietnam: pre-registration plus pre-notification
In Vietnam, both gates sit before the deal: registration of capital contribution, share or stake purchase under the Law on Investment 143/2025/QH15 (effective 1 March 2026, replacing Law 61/2020/QH14) in prescribed cases; member/shareholder change registration under the Enterprise Law 2020 (amended by Law 76/2025/QH15, effective 1 July 2025); and pre-closing economic concentration notification under the Competition Law 23/2018/QH14 + Decree 35/2020/ND-CP above thresholds. Vietnam’s timeline is “front-heavy”, Indonesia’s “back-heavy” — buyer protections must be drafted differently.
Due diligence: Indonesia is hardest on land and nominees
Indonesian DD has two sinkholes: land rights — most commonly HGB (right to build, time-limited), where remaining term and extendability must be verified; and nominee structures (Indonesians holding shares for foreigners), prohibited in many cases — buying a company built on nominees without a cure is buying criminal risk. In Vietnam, DD typically snags on land and sub-licences, but rarely on such blatant nominee structures.
Quick comparison
| Criterion | Indonesia | Vietnam |
|---|---|---|
| Foreign-investment approval | Positive Investment List + risk-based OSS-RBA licensing; verify foreign ratio post-deal | Registration of capital contribution/share purchase in prescribed cases (Law 143/2025) |
| Merger control | KPPU: post-closing notification (above thresholds) | Pre-closing concentration notification (Law 23/2018 + Decree 35/2020) |
| Capital-transfer tax | Unlisted share transfers taxed at the seller’s ordinary rates; check the Vietnam–Indonesia treaty | Organisations: CIT (Law 67/2025/QH15 + Decree 320/2025/ND-CP); individuals: PIT |
| Typical closing timeline | 2–4 months; land/nominee DD is usually the bottleneck | 1–3 months |
Recommended actions
1. Check the Positive Investment List for the target’s sectors at the post-deal ownership structure — before valuation. 2. Draft buyer protections for post-closing KPPU risk. 3. DD HGB land and scan for nominee structures with local counsel. 4. Confirm every point of Indonesian law with local counsel.
Frequently Asked Questions
Does buying shares in Indonesia need investment approval like M&A in Vietnam?
Indonesia uses the Positive Investment List (Presidential Regulation 10/2021, amended by 49/2021): look up which sectors are open, on what conditions and the maximum foreign equity, combined with risk-based OSS-RBA licensing. Acquiring an operating company requires checking the target’s business lines remain permitted under the new ownership structure. In Vietnam, the corresponding gate is registration of capital contribution, share or stake purchase under the Law on Investment 143/2025.
What are Indonesia’s merger-control thresholds?
The KPPU applies post-closing notification above asset/turnover thresholds — unlike countries requiring pre-closing filings. The KPPU can still investigate and impose remedies where a deal lessens competition.
What is hardest in Indonesian due diligence compared with Vietnam?
Land rights (commonly time-limited HGB — verify remaining term and extendability) and nominee structures (locals holding for foreigners, prohibited in many cases). In Vietnam, DD typically snags on land and sub-licences.
What tax applies on transferring shares in an Indonesian company?
Unlisted share transfers are taxed at the seller’s ordinary rates; the Vietnam–Indonesia double tax treaty should be checked. In Vietnam, organisations pay CIT and individuals pay PIT.
How long does an Indonesian M&A deal usually take?
About 2–4 months; the bottleneck is usually land DD and nominee-structure review, while OSS-RBA administration is relatively quick.
Does KPPU “post-closing notification” mean no competition risk?
No. Post-closing only shifts timing, not risk: the KPPU can still investigate post-deal and impose structural remedies. Buyer protections in the contract must cover this scenario.
