Expanding into Indonesia’s Consumer Goods Market through Strategic Acquisition

Acquisition and PT PMA conversion of an Indonesian distributor

A Malaysian trading company entered Indonesia’s consumer goods market by acquiring a Jakarta-based distributor supplying household products to supermarkets and online platforms. The target’s lean structure, established distribution network, and absence of restrictive regulatory barriers made it an efficient market entry vehicle. We supported the client through due diligence, transaction structuring, closing, and post-acquisition compliance, enabling a smooth and compliant transition into Indonesia’s highly regulated consumer goods sector.

Challenge

Entering Indonesia through acquisition required careful management of regulatory, contractual, and operational risks. The client needed to confirm that the target company was properly licensed, free of compliance issues, and able to continue operating without disruption after the change in ownership.

Key challenges included verifying license coverage, ensuring existing sales, distribution, and bank financing agreements remained valid post-acquisition, and structuring the transaction to meet foreign ownership requirements. The client also intended to retain all employees, which required a review of HR documentation and employment status to avoid disputes or severance liabilities while ensuring continuity of operations.

Solution

We guided the client through a structured acquisition process, beginning with comprehensive legal, tax, and financial due diligence. This included verifying the company’s licensing under KBLI 46491, confirming its Business Identification Number (NIB), effective business license, warehouse permits, and tax compliance status.

To protect operational continuity, we reviewed key distribution and sales contracts for change-of-control clauses and prepared notifications to business partners. We also engaged with the target’s bank to confirm that existing financing arrangements would remain valid following the acquisition.

The transaction was structured to accommodate foreign ownership, and we drafted and negotiated the Conditional Share Purchase Agreement, setting out conditions precedent and post-closing obligations. Following satisfaction of all conditions, we finalized transaction documents, executed the Share Purchase Agreement, and completed closing.

Post-closing, we handled all regulatory updates with the Ministry of Law and Human Rights, the Ministry of Investment / BKPM through the OSS system, the Tax Office, and completed Ultimate Beneficial Owner disclosures. Protective provisions, including indemnities and a call option, were included to safeguard the client against post-closing risks.

Impact

The acquisition was completed within three months, with all regulatory approvals and filings secured. The company was successfully converted into a foreign-owned PT PMA, while maintaining uninterrupted distribution activities, financing arrangements, and warehouse operations.

All employees were retained and transitioned onto updated, compliant contracts without triggering severance obligations. With ongoing tax compliance and corporate secretarial support, the client now operates within a streamlined and fully compliant corporate structure in Indonesia’s consumer goods market.

Strategic significance and key takeaways

This case demonstrates how acquisitions can serve as an efficient entry strategy into Indonesia when regulatory risks are properly managed. Ensuring license validity, contract continuity, and employment compliance early in the process is critical to avoiding post-closing disruption.

Key takeaways:

• Targeted due diligence is essential for consumer goods acquisitions in Indonesia
• Contract and financing continuity must be addressed before closing
• Proper structuring enables foreign ownership without operational disruption