Legal Due Diligence in Indonesia is a critical process for businesses and investors seeking to understand and mitigate legal risks associated with transactions. In Indonesia, where economic growth and investment opportunities abound, conducting thorough due diligence is essential for navigating the complexities of the local legal environment. This article provides an overview of Legal Due Diligence in Indonesia, its importance, and how it can be effectively carried out.

What is Legal Due Diligence (LDD) in Indonesia?

Legal Due Diligence involves a detailed investigation to assess the legal aspects and risks of a business transaction. It aims to uncover any potential issues that could affect the deal’s value or feasibility. The process helps investors and businesses ensure compliance, identify liabilities, and make informed decisions before finalizing any agreements.

When is Legal Due Diligence in Indonesia Required?

Investment and Expansion

With Indonesia being a significant player in the global market, particularly in sectors like digital technology, services, and infrastructure, investors often consider entering or expanding within the country. Legal Due Diligence becomes crucial in these scenarios to validate the legitimacy of business operations, assess regulatory compliance, and evaluate potential risks.

Mergers and Acquisitions

In the context of mergers and acquisitions, LDD is vital for evaluating the target company’s legal standing. It helps in identifying any legal hurdles or obligations that might impact the transaction, ensuring that all aspects of the target company’s operations are thoroughly reviewed.

Government Projects

For businesses engaging in government projects, due diligence ensures compliance with regulatory requirements and assesses any legal implications associated with project execution.

Key Components of Legal Due Diligence in Indonesia

Reviewing Business Licenses and Permits

One of the primary aspects of LDD is verifying the validity of business licenses and permits. This ensures that the target company is operating legally and in compliance with Indonesian regulations.

Assessing Land and Property Issues

Investors must evaluate the status of land and property associated with the business. This includes examining ownership, zoning regulations, and any potential encumbrances that could pose risks.

Analyzing Financial and Tax Compliance

A thorough review of financial statements, tax returns, and other relevant documents is essential to assess the target company’s financial health and tax compliance. This helps in identifying any outstanding liabilities or issues.

Evaluating Employment Matters

Reviewing employment contracts, policies, and practices helps identify potential liabilities or costs associated with employee termination. This is crucial for understanding the full scope of employment-related risks.

Assessing Assets and Physical Conditions

An analysis of the target company’s assets, including property, equipment, and inventory, helps determine their value and condition. This ensures that the assets are in good standing and are accurately represented.

Investigating Social and Environmental Risks

Understanding the target company’s reputation and relationship with the local community is important for identifying any social or environmental risks that could impact the business.

The Due Diligence Process

Document Review

The process typically involves a thorough review of various documents, including legal compliance records, business operations, and company assets.

Interviews and Investigations

Interviews with business partners and employees, along with investigations into company operations, provide deeper insights into potential risks and obligations.

Legal Opinions and Advisory

Providing legal opinions on corporate actions, regulatory compliance, and other relevant matters helps investors make informed decisions and address specific concerns.

How Can Double M Help?

At Double M, we offer comprehensive Legal Due Diligence services tailored to the Indonesian market. Our expert team is adept at navigating the complexities of local regulations and provides:

• Thorough Document Review: We meticulously analyze business licenses, permits, and other essential documents.
• Risk Assessment: Our team evaluates land status, financial health, and employment matters to identify potential risks.
• Expert Legal Opinions: We provide informed legal opinions on corporate structuring, mergers, acquisitions, and compliance matters.

By partnering with us, you gain valuable insights and guidance to ensure a smooth and successful transaction in Indonesia. Our goal is to help you mitigate risks and make strategic decisions that align with your business objectives.

Contact Double M today to learn more about how our Legal Due Diligence services can support your investment and business endeavors in Indonesia.

Corporate Lawyers in Indonesia are vital partners for businesses navigating the country’s complex legal landscape. With a deep understanding of Indonesian laws and regulations, corporate lawyers ensure that businesses operate smoothly and legally, minimizing risks and optimizing operations. Their role is particularly crucial for foreign investors, as they provide guidance on adhering to local investment laws and structuring deals to maximize benefits.

Understanding the Indonesian Legal Framework

Indonesia’s legal system is a complex amalgamation of various sources of law, including Dutch colonial laws, traditional customs, and modern regulations. This complexity often poses challenges for businesses trying to navigate legal requirements effectively. Corporate lawyers in Indonesia specialize in interpreting these laws and ensuring that businesses operate within the legal framework.

Key Roles of Corporate Lawyers in Indonesia

1. Business Formation and Structuring:
   • Setting up a business in Indonesia involves numerous legal steps. Corporate lawyers assist in selecting the appropriate business structure, whether it’s a local PT (Perseroan Terbatas) or a PMA (Penanaman Modal Asing) for foreign investments. They ensure that all documentation complies with the Indonesian Investment Coordinating Board (BKPM) requirements.
2. Regulatory Compliance:
   • Compliance with Indonesian regulations is essential to avoid legal issues and penalties. Corporate lawyers help businesses understand and adhere to various regulations, including those related to labor, environmental impact, and corporate governance.
3. Contracts and Agreements:
   • Drafting and negotiating contracts is a critical aspect of business operations. Corporate lawyers ensure that contracts are legally sound and protect the interests of their clients. This includes employment contracts, supplier agreements, and joint venture contracts.
4. Intellectual Property Protection:
   • Protecting intellectual property is vital for businesses. Corporate lawyers assist in registering trademarks, patents, and copyrights, and handle any disputes that arise in this area.
5. Dispute Resolution:
   • Legal disputes are an inevitable part of business. Corporate lawyers represent clients in negotiations, arbitration, and court proceedings, striving to resolve conflicts efficiently and effectively.
6. Mergers and Acquisitions (M&A):
   • In M&A transactions, corporate lawyers play a crucial role in due diligence, negotiation, and ensuring that all legal aspects of the deal are properly addressed.

Benefits of Engaging a Corporate Lawyer in Indonesia

1. Expertise in Local Laws:
   • Corporate lawyers possess in-depth knowledge of Indonesian laws and regulations. Their expertise ensures that businesses comply with all legal requirements, reducing the risk of legal issues.
2. Risk Management:
   • By providing legal advice on compliance and regulatory matters, corporate lawyers help businesses manage risks effectively. This proactive approach minimizes potential legal disputes and financial penalties.
3. Efficient Business Operations:
   • With corporate lawyers handling legal matters, businesses can focus on their core operations. This leads to more efficient and streamlined business processes.
4. Protection of Interests:
   • Corporate lawyers safeguard the interests of their clients by ensuring that all legal documents and contracts are favorable and legally sound.
5. Facilitation of Foreign Investment:
   • For foreign investors, understanding and navigating Indonesian investment laws can be challenging. Corporate lawyers assist in structuring investments to maximize benefits while ensuring compliance with local regulations.

In conclusion, corporate lawyers in Indonesia serve as indispensable partners for businesses and investors alike. Their expertise in navigating the country’s intricate legal landscape ensures smooth and compliant operations across various critical areas. From business formation to dispute resolution, corporate lawyers play a pivotal role in safeguarding businesses’ interests and minimizing legal risks. For foreign investors, their assistance in understanding and navigating Indonesia’s investment laws is invaluable. By providing comprehensive legal support, corporate lawyers empower businesses to operate efficiently, allowing them to focus on achieving growth and success in the Indonesian market.

Legal assistance in Indonesia is crucial for individuals and businesses, providing essential support in understanding the legal system. For those doing business or living in Indonesia, getting professional legal help is crucial. It ensures following the rules, resolving issues, and protecting legal interests. This article delves into why legal assistance in Indonesia is important and how expert services offer valuable support.

Understanding the Need for Legal Assistance in Indonesia

Indonesia, with its diverse legal framework, presents unique challenges for those unfamiliar with its intricacies. From business regulations to personal legal matters, having reliable legal assistance in Indonesia becomes essential. This assistance is crucial for understanding local laws and keeping individuals well-informed and protected within the legal system.

The Role of Legal Advisors in Indonesia

Legal advisors in Indonesia play a pivotal role in offering guidance and counsel across various legal domains. Whether it’s corporate law, intellectual property, employment regulations, or real estate transactions, these experts provide crucial insights and ensure that clients make informed decisions. They serve as a bridge between the complex legal landscape and the practical needs of businesses and individuals.

Corporate Legal Support in Indonesia

For businesses operating in Indonesia, legal assistance is indispensable. Navigating corporate laws, drafting contracts, and ensuring compliance with regulatory requirements demand a deep understanding of the Indonesian legal framework. Legal advisors offer strategic counsel, helping businesses establish a strong legal foundation and mitigate risks associated with business operations.

Individual Legal Consultation Services

On an individual level, legal assistance extends to matters such as family law, immigration issues, and personal injury cases. Seeking legal advice and representation ensures that individuals are aware of their rights and have the necessary support to navigate legal proceedings. This is particularly crucial in unfamiliar legal environments, where professional guidance can make a significant difference.

Benefits of Legal Outsourcing Services in Indonesia

Many businesses find value in legal outsourcing services in Indonesia. Outsourcing legal tasks to experienced professionals not only allows companies to focus on their core operations but also ensures that legal matters are handled with precision. This cost-effective approach provides access to a pool of legal expertise without the need for an in-house legal team.

Navigating Regulatory Compliance

Indonesia’s regulatory landscape is constantly evolving, making it imperative for businesses to stay compliant. Legal advisors assist businesses in understanding and adhering to changing regulations, reducing the risk of legal complications. This proactive approach to regulatory compliance enhances the overall stability and longevity of businesses in Indonesia.

Empowering Success through Legal Assistance in Indonesia

In summary, legal assistance in Indonesia is crucial for both businesses and individuals dealing with the complexities of the legal system. Whether it’s following business rules, getting personal legal help, or getting legal tasks done, having dependable support is a smart investment. With experienced legal advisors, businesses and individuals can confidently navigate legal challenges, ensuring success in Indonesia. Embracing legal assistance is more than a necessity; it’s a proactive move to have clear legal guidance and protect long-term interests.

Police Clearance Certificate in Indonesia is an official document issued by the Indonesian Police to the applicant to declare that the applicant has a clean criminal record. In Indonesian terms, the document is also known as Surat Keterangan Catatan Kepolisian or SKCK. Both Indonesian and foreign citizens who hold KITAS or KITAP, can applyh for SKCK. SKCK is valid for 6 months since the day it was issued and can be extended when it’s past due. 

Why Do You Need a Police Clearance Certificate in Indonesia?

For foreign citizens, an SKCK is an important document. You will need to have an SKCK if you want to apply for permanent residency, apply for jobs and apply for naturalization as an Indonesian citizen. 

Not only for administrative processes, foreign citizens may also need SKCK in more casual situations. For example, many car vendors in Bali require potential renters to show their SKCK before they can officially rent their vehicles. The document is very useful to show that you have a clean criminal record. 

Requirements to Get Police Clearance Certificate in Indonesia

There are several requirements that you must prepare in order to get SKCK in Indonesia:

1. STM of the applicant [Surat Tanda Melapor from Police office]
2. SKTT of the applicant [Surat Keterangan Tempat Tinggal from Civil Registration office]
3. Application letter from the sponsor or employer in Indonesia. HR manager must sign the letter [Double M will provide the template]
4. Copy of valid passport
5. Copy of KITAS
6. Copy of IMTA [work permit issued by Manpower Dept.]
7. 6 pcs of color photo [size 4×6 cm] with yellow background [in the photo you must wear collar shirt and not using facial accessories].
8. Finger stamps [Double M will provide the form from Indonesia Police Department].

Procedures to Get a Police Clearance Certificate in Indonesia

You can get the Police Clearance Certificate through offline and online procedures:

1. Offline Procedures

• Visit the nearest police office while bringing all the required documents.
• Fill out a form about your personal information.
• Submit your fingerprints.
• Complete the payment of the administration fee.

2. Online Procedures

Based on the notification letter of the National Police Chief number: B/2134/III/REN.2./2023/DivTIK, starting from March 20, 2023 online SKCK applications can be applied through the SUPERAPPS PRESISI POLRI application which can be downloaded via Google Play Store and App Store

How can Double M help?

Police Clearance Certificate in Indonesia is an important document in a lot of circumstances. With Double M’s help, you can meet all the requirements and obtain the document with no hassle.

The Job Creation Law (Omnibus Law / Undang-Undang Cipta Kerja) as Convention No. 10 of 2020 regulated November 2, 2020, was one of the most highlighted Indonesian regulations these days. This convention provides allows Indonesian Ministries and Governmental agencies to create new regulations to be in accordance with the directions in Omnibus Law. To rapidly, create new governed regulations under the Omnibus Law. The Job Creation Law revises various provisions in cross-sectoral laws, including Law No. 13 of 2003 on Labor (“Labor Law”).

Enforcement of the new Regulation of Omnibus Law

            As one of the most affected authorities, the Ministry of Manpower, alongside the other related governmental institutions, created a new regulation under the Omnibus Law called Government Regulation (Peraturan Pemerintah) Number 35 of 2021. This regulation enforced by considering Article 81 and Article 185 concerning the Job Creation Law regarding the Fixed-Term Employment Contract, Outsourcing, Working Hours & Recess Hours, and Employment Termination. As for today’s review, we will straightly provide you with the latest information on the Fixed-Term Employment Contract (Perjanjian Kerja Waktu Tertentu), and how to terminate it.

Omnibus Law on Compensation for Fixed-Term Employees (“PKWT”)

           Previously, Labor Law number 13 of 2003 was the regulation for the manpower sector in Indonesia. All sectors entwined, based on the necessity of having proper employment terms, regulated in the previous Labor Law. The next action taken by the Government after the enforcement of Omnibus Law is to have the latest enforced Law taken into consideration.

Compensation Calculation : working for a month entitled to compensation!

• An employee entitled to receive a certain amount of compensation after completing their Fixed-Term Employment contract. The amount calculated based on the minimum working period of 1 (one) month and calculated on a pro-rata basis to their monthly salary. Any form of termination, be it by unilateral or voluntary decision, or by completing the period of Contract, will provide the terminated employee with a work compensation (Article 15 of the Government Regulation No. 35/2021). Previous Labor Law has never issued this type of terms to Fixed-Term Employee. However, this rule does not apply to foreign employees with a fixed-term contract of employment. This is because of the company’s working relationship.
• The compensation gave based on the value of the basic salary and fixed allowance. If, the Company has a non-fix allowance provided alongside the basic salary, the compensation given based on the value of the basic salary.

• The compensation for a fixed-term employment contract, for a specific project, finishes before the period specified in the employment agreement, the compensation is then calculated up to the time of completion of work and not until the specified period.
• Compensation for Employee/Worker on Micro and Small Business gave based on the negotiation and mutual agreement between the Employer and the Employee/Worker.

Effectively Regulated for the field of Labor

The Labor Law of 2003 is not ignored in performing the employment-related issue despite Government regulation, the mutual agreement between the company and the employee has to be a part of the rules set for employment conditions. Moreover, as explained in Article 65 of Government Regulation Number 35 of 2021. The previous Labor Law of 2003 can be carried out, as long as it doesn’t contradict the regulated terms in the Government Regulation.

Omnibus Law, Effects on Business

These regulations clearly put Labor on the “winning” side, the Government must pay attention to the impact it may have on business especially during this time of recession. Employers are now given the option of hiring temporary or permanent employees for their Company. They both have benefits and drawbacks of doing business; permanent employers get no compensation; after compliance with the terms specified, the employee continues to be entitled to the Company’s severance pay.

And this newly regulated Government regulation helps the employer to give more time upon employment status consideration; in whichever must be suitable to the needs and in accordance to the Law. For a more complete regulation insight please contact Double M. Phone: +62 21 2789 9882 or Email: info@double-m.co