Government Amends Provisions on State Equity Participation in Order to Establish Holding Systems for State-Owned Enterprises

In a bid to improve the competitiveness of Indonesia's State-Owned Enterprises (“SOEs”), the government is aiming to strengthen the organizational aspects of SOEs while simultaneously improving their working mechanisms and administrative procedures through the setting up of holding systems for SOEs. [1] With this goal in mind, the government has issued Government Regulation No. 72 of 2016 (“Regulation 72/2016”), which amends a number of provisions relating to the participation of state equity in SOEs or limited-liability companies (“LLCs”), as originally regulated under Government Regulation No. 44 of 2005 on Procedures for the Participation and Administration of State Equity in State-Owned Enterprises and Limited-Liability Companies (“Regulation 44/2005”). [2] Asset Sources for State-Equity ParticipationRegulation 72/2016 specifies three main sources of state assets that may be used for direct-equity participation in SOEs or LLCs, specifically: [3]