New Regulation on SOEs Restructuring and Privatization Enters Harmonization Stage

The Government is finalizing a Draft Government Regulation ("Draft Regulation") on the Restructuring and Privatization of State-Owned Enterprises ("SOEs"). The proposed regulation will revoke Government Regulation No. 33 of 2005 on the Procedures for the Privatization of Limited Liability Companies (Persero) along with its amendment ("PP 33/2005"), as well as Government Regulation No. 43 of 2005 on the Merger, Consolidation, Acquisition, and Conversion of the Legal Entity Form of SOEs ("PP 43/2005").

"The draft serves as an implementing regulation for Law No. 16 of 2025 on the Fourth Amendment to the State-Owned Enterprises Law and is currently undergoing the harmonization process," said Unan Pribadi, Director of Harmonization of Laws and Regulations III (“HPP III”) at the Directorate General of Legislation (Direktorat Jenderal Peraturan Perundang-undangan – “DJPP”), Ministry of Law.

Based on the Draft Regulation obtained by Hukumonline, the Draft Regulation will broaden the legal framework governing SOE restructuring. In addition, it provides for three methods of privatization: through the capital market, by way of direct sale to investors, and through the sale of shares to the management and/or employees of a Persero.