Indonesia: A Corporate/M&A Overview

The Outlook for Mergers and Acquisitions in Indonesia

The year 2025 proved to be a dynamic period for the Indonesian economy, marked by significant shifts over a relatively short period. Following a slowdown in the first half of the year, in the aftermath of the inauguration of the new government under President Prabowo Subianto, economic sentiment began to recover toward the end of Q3 2025. Investment realisation reached approximately USD85 billion by December 2025, representing a 13.7% year-on-year increase.

The rebound was driven in part by a series of government initiatives aimed at restoring foreign investors’ confidence through improvements to key regulatory frameworks designed to enhance the ease of doing business in Indonesia. These initiatives include the enactment of Government Regulation No 28 of 2025, replacing Government Regulation No 5 of 2021, as the main pillar of Indonesia’s business licensing framework (GR 28/2025), and Indonesia Co-ordinating Investment Board (BKPM) Regulation No 5 of 2025, revoking its predecessor (BKPMR 5/2025). Together with the appointment of the new Minister of Finance in early September 2025, these reforms contributed to renewed confidence in Indonesia’s investment climate.

Looking ahead to 2026, the Indonesian government maintains an optimistic outlook on economic resilience, forecasting economic growth of at least 5 % as an underlying assumption for the preparation of the 2026 State Budget. Technology and digital infrastructure, financial services, renewable energy, logistics and healthcare are expected to be key drivers of M&A activity. Transaction volumes are also likely to be supported by (i) the establishment of Daya Anagata Nusantara (Danantara), Indonesia’s sovereign wealth fund, whose assets under management were projected to reach approximately USD1 trillion as of October 2025, (ii) consolidation across financial services sub-sectors, and (iii) anticipated reforms to the Indonesian Investment List.

Key Regulatory Developments 2025–2026

General corporate

Reduced minimum issued capital

Through BKPMR 5/2025, BKPM reduces the minimum paid-up capital requirement for foreign investment companies from IDR10 billion (approximately USD600,000) to IDR2.5 billion (approximately USD150,000). This measure is intended to lower entry barriers for foreign investors and stimulate investment activities, including through M&A transactions involving smaller or early-stage businesses.

Improved and realigned licensing requirement

Through GR 28/2025, the Indonesian government introduces a series of reforms aimed at enhancing regulatory efficiency and legal certainty in the business licensing process. These reforms include the implementation of the “positive fictitious principle” for permit issuance to minimise any administrative delays, the simplification and acceleration of the issuance process for “spatial permits”, and the harmonisation of overlapping Indonesian Standard Industrial Classification (KBLI) codes across relevant ministries to enhance greater regulatory coherence.

Financial sector

The Buy Now Pay Later (BNPL) sector in Indonesia is projected to expand to USD13.59 billion by 2030. In response to consumer protection concerns, the Indonesian Financial Services Authority (OJK) introduced a new policy at the end of 2025 pursuant to OJK Regulation No 32 of 2025, aimed at fostering more responsible and sustainable BNPL practices.

Under the new regulation, BNPL activities are now expressly limited only to banks and multi-finance companies (MFCs). Given the higher regulatory thresholds applicable to the banking sector, investors may generally see MFCs as the preferred vehicle for conducting BNPL activities. In the MFC sector, OJK’s inclination seems consistent over the past few years in limiting issuance of new permits for new MFCs and encouraging investors to acquire existing MFCs.

Renewable energy sector

In October 2025, the Indonesian government issued Presidential Regulation No 109 of 2025, aimed at addressing Indonesia’s growing waste management challenges and landfill overcapacity by strengthening the legal framework for the waste-to-energy development. One of the key provisions welcomed by the market is the introduction of a fixed electricity purchase price of USD0.20 per kWh for the entire 30-year project period, which is expected to enhance project bankability and attract greater investor interest.

Future M&A Challenges in Indonesia

Substantive verification by Minister of Law – under the Indonesian Company Act, amendments to a company’s articles of association and/or changes in the composition of shareholders or board members must be reported to the Minister of Law (MOL) for notification or approval. Following the enactment of MOL Regulation No 49 of 2025 on 17 December 2025, the MOL now requires new additional verification processes that may take up to 14 business days (extendable for another seven calendar days). This new policy may pose challenges for transactions requiring completion on a fixed effective date, such as in mergers or multi-stage acquisitions.

While the Indonesian government appears to be relaxing restrictions on inbound investment in real sectors, a more restrictive approach has been adopted in the financial sector. As of the end of 2024, OJK no longer permits foreign investors to exercise direct control over multiple financial institutions in Indonesia pursuant to OJK Regulation No 30 of 2024. This regulation significantly reshapes the governance structure of financial groups operating in Indonesia. Eligible financial groups fulfilling the criteria are now required to appoint a financial holding company (either an existing financial institution or a non-operational holding company – PIKK) and place it at the top of their organisational structure to consolidate control over all Indonesian subsidiaries.

While this framework is intended to enhance OJK’s supervisory effectiveness, it has notable implications for M&A activities, particularly for:

• existing financial groups whose current structures are not compliant and need to be reorganised; and
• prospective investors, who must assess whether their proposed M&A will necessitate the appointment of a financial holding or the establishment of a PIKK.

Looking Ahead: Anticipated Regulatory Changes

New free float threshold

The Indonesian government is considering an increase in the minimum free float requirement for companies listed on the Indonesian Stock Exchange from 7.5% to a proposed range of 10–15%. Any such increase would likely trigger divestment initiatives by controlling shareholders to comply with the increased threshold, potentially resulting in increased secondary market activity. 

Potential update to the Indonesian investment list

In light of recent reforms in licensing and business classification, the Indonesian government may update the Indonesian Investment List as part of its broader efforts to enhance the ease of doing business and stimulate inbound investment.