For many international investors, signing the hotel acquisition agreement feels like crossing the finish line. Yet in reality, it marks the beginning of a far more crucial journey — the post- acquisition phase.

This stage determines whether an investment will flourish or falter. It’s where ownership becomes operation, and contracts must evolve into compliance. In Indonesia, particularly in Bali’s hospitality sector, post-acquisition integration demands meticulous legal management. A single oversight can translate into costly regulatory, tax, or reputational setbacks.

At Schinder Law Firm, we’ve seen that the most successful investors are those who treat post- acquisition compliance not as an administrative burden, but as a strategic foundation for long-term growth. Below, we outline key areas every hotel investor in Bali must address after acquisition.

1.   Legal Alignment: Updating Corporate and Licensing Structures

Once ownership has transferred — whether through a share purchase or asset acquisition — investors must promptly align all corporate and legal documents with current Indonesian laws.

Key steps include:

• Amending the company’s Articles of Association and updating shareholders, directors, and commissioners with the Ministry of Law.
• Updating business data via the Online Single Submission – Risk-Based Approach (OSS- RBA) system to ensure the company’s legal standing remains valid.
• Securing or renewing critical operational permits such as the Tourism Business Registration (TDUP) and Hotel Classification Certificate under the new legal entity/new shareholders.

Failure to update these records in time may render the business non-compliant and delay future licensing or financing activities.

2.   Investment Reporting and Tax Compliance

Every foreign-owned company in Indonesia must submit Investment Activity Reports (Laporan Kegiatan Penanaman Modal or LKPM) to the Ministry of Investment/BKPM, detailing the realization of foreign capital inflows each quarter.

Tax compliance is another cornerstone of post-acquisition success. Investors should:

• Update the company’s Tax Identification Number (NPWP) and VAT registration;
• Conduct pre- and post-acquisition tax audits;
• Verify all withholding, corporate, and employee tax obligations to ensure full alignment with Indonesian tax law.

Proactive tax and investment reporting not only prevents penalties but also reinforces transparency with regulators and potential financial partners.

3.   Employment Compliance: Protecting Rights and Continuity

Under Law No. 13 of 2003 on Manpower, as amended by the Job Creation Law, employee transition is a legally sensitive step. All employment transfers from the previous company must preserve existing workers’ rights and entitlements.

Key requirements include:

• Revising the Company Regulation (Peraturan Perusahaan) or Collective Labor Agreement (Perjanjian Kerja Bersama) to reflect the new ownership structure.
• Officially reporting employee transfers to the local Manpower Office.
• Ensuring all employment contracts, payroll systems, and social security (BPJS) contributions remain consistent.

Handled properly, these measures maintain operational stability and prevent potential labor disputes.

4.   Contract, Licensing, and Environmental Revalidation

Most Bali hotels operate under international management agreements with brands such as Marriott, Hyatt, Accor, or Aman. After acquisition, the new investor must notify the hotel operator and execute a novation agreement to legally substitute parties in existing contracts.

In addition, investors should:

• Update environmental permits (AMDAL or UKL-UPL);
• Review and reassign vendor contracts (e.g., laundry, catering, maintenance);
• Revalidate intellectual property rights—including trademarks for the hotel’s name, logo, and brand identity—to secure ownership continuity.

5.   Strategic Repositioning: Turning Compliance into Opportunity

The post-acquisition phase is also the perfect moment to redefine the brand and business model. Many investors use this period to rebrand properties into:

• Eco-luxury resorts or wellness retreats;
• Digital nomad hubs or boutique experiences;
• Or reposition the asset under an international brand to capture new

Enhancing corporate governance, sustainability standards, and digital compliance can further attract global investors and increase the property’s valuation.

6.   Schinder’s Post-Acquisition Advisory

At Schinder Law Firm, we provide end-to-end legal guidance for hotel investors navigating Indonesia’s post-acquisition landscape. Our team assists with:

• Corporate restructuring and OSS-RBA updates
• Licensing and operational permit renewals
• Investment reporting (LKPM)
• Tax compliance and cross-border advisory
• Employment and contract transition

If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author:
Dewi Susanti