A lender financing a renewable energy plant in Indonesia is usually repaid from one source: the electricity the project sells to PT PLN (Persero) (“PLN”) under a power purchase agreement (“PPA”). Under project finance, the loan is serviced from the project’s own cash flow rather than the parent company’s balance sheet, so it depends on the PPA...

Many companies buy land first and build later. Funding has not been disbursed, permits are still in process, or business plans change. As long as the Right to Build (Hak Guna Bangunan, “HGB”) or Right to Cultivate (Hak Guna Usaha,“HGU”) certificate remains in the company’s name, the land is usually considered safe. Since 6 November 2025, that assumption has become risky...

In conducting business activities, directors are faced with various strategic decisions, ranging from investment and expansion to product development and commercial cooperation. Each of these decisions carries both the potential for profit and the risk of loss. Even decisions made after careful business consideration may result in losses due to changes in market conditions, economic circumstances, or other external factors...

For companies seeking access to the capital market, an Initial Public Offering (“IPO”) is one of the conventional routes to becoming a public company and listing its shares on a stock exchange. However, another corporate strategy that may be considered is a Reverse Takeover (“RTO”)...

Many business founders, including foreign investors setting foot in Indonesia for the first time, are drawn to virtual offices as their company's registered address. The cost is far lower than renting physical space, particularly in the early stage when operations haven't fully kicked off. The question that follows, and one often only realised once the incorporation process is already underway...

Indonesia’s mining sector continues to undergo significant regulatory developments aimed at strengthening governance, enhancing transparency, and promoting fair competition. One of the latest developments is the issuance of Minister of Energy and Mineral Resources Decree No. 365.K/MB.01/MEM.B/2026 (“MEMR Decree 365/2026”)...

Foreign investors commonly fund their Indonesian subsidiaries through shareholder loans rather than additional equity. While this structure can provide flexibility and, subject to applicable tax rules, allow interest expenses to be deducted for income tax purposes, excessive reliance on debt can create tax and corporate issues...

For companies employing Foreign Workers (“TKA”) in Indonesia, compliance is not limited to having the required work and stay permits. Companies also need to ensure that the TKA’s position, work location, employment period, and other relevant information remain consistent with the documents supporting their employment...

A distribution agreement may come to an end, but a distributor may not immediately stop using the principal’s brand. A former distributor may continue displaying the principal’s logo, using its trademark on websites or social media, distributing promotional materials, or representing itself as an authorized distributor...

Liquidated damages are damages or compensation whose amount has been agreed and determined in advance by the parties in a contract before the agreement is signed. Such amount becomes payable by the party in breach of the contract (wanprestasi), commonly as a result of a delay in completing the works. Under Articles 1239 and 1243 of the Indonesian Civil Code liquidated damages may be understood as a form of compensation determined and agreed upon by the parties from the outset of the contractual relationship...

For foreign investors holding shares in an Indonesian PT PMA, the ability to bring profits back to their home country is an important consideration. In principle, Indonesian law permits investors to transfer and repatriate investment-related funds, including capital, profits, dividends, interest, royalties, and proceeds from the sale or liquidation of an investment...

When entering a business partnership, founders and investors may assume that the Articles of Association (“AoA”) provide sufficient protection for their respective interests. In practice, however, the AoA primarily addresses corporate matters required under Indonesian law and may not fully capture the commercial arrangements agreed between shareholders...

Human Rights Due Diligence (“HRDD”) is becoming an increasingly important aspect of corporate compliance in Indonesia. Broadly, HRDD refers to a process through which businesses identify, assess, prevent, mitigate, monitor, and address actual or potential adverse human rights impacts arising from their operations and business relationships...

Holding a minority stake in an Indonesian Perseroan Terbatas (PT) does not mean losing your rights as a shareholder. Under Law No. 40 of 2007 concerning Limited Liability Companies (“UUPT”), shareholders have the right to attend and vote at the General Meeting of Shareholders (“RUPS”...

Indonesia has approximately 23.2 GW of geothermal potential, with only around 11.6% currently developed into installed capacity. Based on ESDM data as of June 2026, the potential is distributed across 369 locations...

In the procurement of goods and services in Indonesia, timely delivery is an important consideration alongside the quality and price of the goods. Delayed delivery of goods can disrupt production processes, construction projects, inventory management, and may result in losses for the buyer...

For online sellers in Indonesia, the mechanism for collecting Income Tax through electronic commerce platforms is set to change. The Directorate General of Taxes (“DGT”) has confirmed that the collection of Article 22 Income Tax (“PPh Article 22”)...

In large-scale financing transactions, creditors rarely rely solely on the principal debtor's repayment capacity. Market practice addresses this with the corporate guarantee (jaminan perusahaan), a guarantee provided by a legal entity, typically a limited liability company, to secure another party's obligations, whether a subsidiary, affiliate, or third-party business partner...