The Financial Services Authority of Indonesia
(Otoritas Jasa Keuangan, or OJK) is expected to
release a circular letter abolishing the mandatory tender offer
requirements for participants of the tax amnesty programme that
buy or become the controller of more than 50% of the shares of
a public company.
The ongoing tax amnesty programme is intended to encourage
Indonesian citizens to repatriate their undeclared assets. It
provides for a one-time tax on the value of the repatriated
assets at a relatively low rate (as low as two percent) in
exchange for declaration of the assets. The rate will
progressively rise after September 30 2016.
The OJK's new rule is designed to encourage shareholders of
public companies to come forward and declare their previously
undeclared holdings of shares in public companies (possibly,
these shares had been previously held under nominee
Under the current capital market rule, the prospective owner
or controller of more than 50% of the shares of an Indonesian
public company must make a tender offer on the remaining
shares. The OJK's new rule would exempt shareholders who
declare their additional shareholding in this way from the
tender offer requirements. In other words, if the shareholding
percentage after the tax amnesty declaration reaches more than
50%, the shareholder would not be required to make a tender
offer of the stake held by the minority shareholders.
The Indonesia stock exchange has also previously offered
incentives targeted at participants of the tax amnesty
programme. These include a reduction in the crossing fee to
transfer shares. This was intended to encourage investment of
the repatriated assets in the domestic capital market.
Oene Marseille and Emir Nurmansyah