LexisNexis® Mergers & Acquisitions Law Guide 2018

207 Pages·2017·3.91 MB·English

The fifth annual complimentary guide
to understanding M&A practices around
the world with an Asia-Pacific focus
INCLUDING A SPECIAL FOCUS ON
ONE BELT ONE ROAD CHINA INVESTMENT
LexisNexis® Mergers &
Acquisitions Law Guide
2018
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LexisNexis® Mergers &
Acquisitions Law Guide 2018

Contents
Feature Article:
Mechanics of M&A in Indonesia – Ali Budiardjo, Nugroho, Reksodiputro ..1
Jurisdictional Q&As:
Australia – Atanaskovic Hartnell ...................................................................15
Bangladesh – The Legal Circle ......................................................................24
Japan – Momo-o, Matsuo & Namba .............................................................37
New Zealand – Mayne Wetherell ..................................................................45
Pakistan – RIAA Barker Gillette ....................................................................57
Saudi Arabia – MAK Law Firm ......................................................................68
Switzerland – Wenger Plattner .....................................................................75
Taiwan – PricewaterhouseCoopers Legal Taiwan ........................................87
Turkey – Hergüner Bilgen Özeke ..................................................................92
United Arab Emirates – RIAA Barker Gillette (Middle East) LLP ..............101
Ukraine – Redcliffe Partners ........................................................................111
Vietnam – VB Law .........................................................................................119

Contents
Special Focus – One Belt One Road China Investment:
Albania – Boga & Associates .......................................................................135
Azerbaijan – EKVITA ....................................................................................149
Bangladesh – Dr. Kamal Hossain and Associates .......................................163
Kazakhstan – GRATA International .............................................................174
Vietnam – VB Law ........................................................................................184
LexisNexis Mergers & Acquisitions Law Guide 2018
Feature Article

Feature Article: Mechanics of
M&A in Indonesia
Firm: Ali Budiardjo, Nugroho,
Reksodiputro
Authors: Freddy Karyadi,
Daniel Octavianus Muliawan
and Anastasia Irawati
A. Regulatory Framework Competition, Business Competition
Supervisory Commission (Komisi Pengawas
In general, mergers and acquisitions in Persaingan Usaha or KPPU), Regulation No.
Indonesia are governed by the following laws 11 of 2010 regarding Consultation on Merger
and regulations: or Consolidation of Business Entity and
a) Law No. 40 of 2007 regarding Limited Acquisition of Shares in the Company, and
Liability Companies (‘Company Law’) as KPPU Regulation No. 13 of 2010 regarding
well as its implementing regulation, i.e. Guidelines on Merger, Consolidation of
Government Regulation No. 27 of 1998 Business Entity and Acquisition of Shares
regarding Mergers, Consolidations, and which may cause Monopoly Practices and
Acquisitions of Limited Liability Companies Unfair Business Competitions, as most
(‘PP 27’); recently amended by the KPPU Regulation
No. 2 of 2013;
b) Law No. 25 of 2007 regarding Investment as
well as its implementation, i.e. Presidential d) Law No. 8 of 1995 regarding the Capital
Regulation No. 44 of 2016 regarding List of Market as well as several other regulations
Business Fields that are Closed to Investment issued by the Capital Market and Financial
and Business Fields that are Conditionally Institution Supervisory Agency (Badan
Open for Investment, Regulation of Pengawas Pasar Modal dan Lembaga
Head of Investment Coordinating Board Keuangan or BAPEPAM-LK) which is
(BKPM) No. 14 of 2015 regarding Guideline currently known as the Financial Services
and Procedure of Principle License in Authority (Otoritas Jasa Keuangan or OJK),
Investment as most recently amended by such as:
Regulation No. 8 of 2016, and Regulation (i) Financial Services Authority (Otoritas
of Head of Investment Coordinating Board Jasa Keuangan) Regulation No. 54/
(BKPM) No. 15 of 2015 regarding Guideline POJK.04/2015 on Voluntary Tender
and Procedure of Investment Licensing and Offers;
Non-Licensing; these laws and regulations
(ii) Rule No. IX.G.1 on Mergers and
only apply to the merger and acquisition
Acquisition of Public Companies or
transaction which involves a foreign
Issuer Companies as an attachment to
investment;
the Decree of Chairman of BAPEPAM-
c) Law No. 5 of 1999 regarding Prohibition of LK No. Kep-52/PM/1997;
Monopoly and Unfair Business Competition
(iii) Rule No. IX.H.1 on Public Company
as well as its implementing regulation,
Acquisition as an attachment to the
among others: Government Regulation No.
Decree of the Chairman of BAPEPAM-
57 of 2010 regarding Merger, Consolidation,
LK No. Kep-264/BL/2011;
and Shares Acquisition which may Cause
the Monopoly Practice and Unfair Business
Feature Article: Mechanics of M&A in Indonesia 1
(iv) Rule No. IX.E.2 on Material Since there will be a transfer of assets and liabil-
Transaction and Change of Main ities of the merging company into the merged
Business as an attachment to the Decree company, the tax aspect of a merger transaction
of BAPEPAM-LK No. Kep-614/BL/2011; will relate to the following:
(v) Financial Services Authority (Otoritas (a) Transfer Tax
Jasa Keuangan) Regulation No. 31/ Transfer tax will be in the form of:
POJK.04/2015 on Disclosure of Material
(i) VAT (in the event that one of the parties
Information or Fact by Issuers or Public
of the merger is not a registered taxable
Company; and
entrepreneur); and/or
(vi) Financial Services Authority (Otoritas
(ii) fees for acquisition of land and build-
Jasa Keuangan) Regulation No. 29/
ing (bea perolehan hak atas tanah dan
POJK.04/2015 on Issuers or Public
bangunan or BPHTB) if the transfer
Company exempted from Reporting
relates to property/land. At the request
and Disclosure Requirement.
of the taxpayer, the Director General of
These laws and regulations will be Taxation may grant a BPHTB reduction
applied only if either the target or the of up to 50% for land and building
purchaser is a publicly listed company; rights transfers in business mergers or
(vii) Related tax regulations, among others: consolidations at book value;
Law No. 7 of 1983 as currently amended (b) Income tax as a result of capital gain by
by Law No. 36 of 2008 regarding the transfer of assets and liabilities of the
Income Tax Law; Law No. 8 of 1983 as merging company to the merged company.
currently amended by Law No. 42 of
Transfers of assets in business mergers must
2009 regarding Value Added Tax; Law
generally be conducted at market value. Gains
No. 21 of 1997 as currently amended by
resulting from this type of restructuring are
Law No. 20 of 2000 on the Acquisition
assessable, while losses are generally claim-
Duty of land and/or building and
able as a deduction from income. However,
Government Regulation No. 34 of 2016
a tax-neutral merger, under which assets are
on Income Tax of transfer of land and
transferred at book value, can be conducted
building and conditional agreement
subject to the approval of the Director General
and its amendment; and
of Taxation, in which the merger plan must pass
(viii) Any other specific regulations depend-
a business purpose test by the Director General
ing on the nature of business of the
of Taxation. As for a tax-driven arrangement, it
target or the purchaser (as applicable),
is prohibited and therefore tax losses from the
such as banking sector, forestry,
combining companies may not be passed on to
mining.
the surviving company.
B. Mechanics of Mergers and Acquisitions Acquisitions
In Indonesia, there are two types of acquisitions:
Mergers
shares acquisitions and asset acquisitions. For
Company Law and PP 27 define a merger as a
the purpose of this article, we will only elabo-
legal act which is conducted by one company
rate further on shares acquisitions. Company
or more to merge itself into another company
Law defines a shares acquisition as a legal act
which has existed previously and the merging
conducted by a legal entity or individuals to
company will then be dissolved.
acquire either all or most of the shares in a
2 LexisNexis Mergers & Acquisitions Law Guide 2018