Beneficial Ownership Rules in Indonesia: What They Mean for Foreign Investment Company’s Annual Reporting.
Two recent regulations have surprised many foreign investors in Indonesia.
- Beneficial ownership in Indonesia: Minister of Law Regulation No. 2 of 2025 on the Verification and Supervision of Beneficial Owners of Corporations (“MOL Reg 2/2025”) introduced a more stringent definition of a beneficial owner, along with new rules on how often that information must be updated.
- Annual Report Filing in Indonesia: Minister of Law Regulation No. 49 of 2025 on Requirements and Procedures for the Establishment, Amendment, and Dissolution of Limited Liability Companies (“MOL Reg 49/2025”) introduced significant changes to how an Indonesian company files its annual report.
In many jurisdictions, failing to comply with corporate or tax filing obligations can restrict a company’s ability to complete future regulatory filings until the outstanding requirements are met. Indonesia has adopted a similar approach under its updated company reporting framework.
For example, if a company fails to submit its annual report through the Legal Entity Administration System or Sistem Administrasi Badan Hukum (“SABH”) by the prescribed deadline, the Ministry of Law (“MOL”) may block access to the SABH. As a result, the company is unable to process future corporate actions, including amendments to its Articles of Association or changes to directors, until the outstanding filing has been completed. The company may continue operating, but its ability to carry out corporate governance actions is significantly restricted.
The company may continue trading and generating revenue for its shareholders throughout this period. What stops is anything requiring a government filing, not the underlying business itself.
This article will cover questions that we commonly receive from foreign investors, from CFOs to General Counsel alike, after they realize the new rules have just come into effect. We will cover in particular the additional steps that are required where an Indonesian entity is held through layered of offshore structure.
Key Takeaways
- Indonesia now has a dedicated beneficial ownership regulation, MOL Reg 2/2025, alongside MOL Reg 49/2025, which governs incorporation, amendment, and annual reporting.
- MOL Reg 2/2025 took effect on 4 February 2025 and introduced active verification in place of simple self-declaration.
- MOL Reg 49/2025 took effect on 17 December 2025.
- Beneficial ownership data must be reconfirmed at least once every 12 months. Any change in shareholding or control must be reported within the statutory period, currently 30 days.
- The annual report must be approved by the Annual General Meeting of Shareholders (“AGMS”) within 6 months of financial year end, then filed via SABH within 30 days of the notarial deed.
- These obligations apply to every existing Indonesian company, not only ones incorporated after the new rules took effect.
To read the full article, please visit NDP.
