17 February 2020 (closed)
USD/IDR (13,777) +42.00 +0.31%
EUR/IDR (14,865) +32.28 +0.22%
Jakarta Composite Index (5,867.52) +0.58 +0.01%
Increase of share capital of a foreign investment limited liability company (PT PMA) in Indonesia requires amendments of several documents and licenses. In this column we explain the implications for a PT PMA that wishes to increase its share capital. The process for increase of share capital includes a shareholder’s decision, amendment of the investment licenses and amendment of the company data at the ministry of Law and Human Rights.
Shareholders Decision on the Increase of Share Capital of the PT PMA
In an Extraordinary General Meeting of Shareholders (EGMS) or a circular resolution outside the EGMS the shareholders can decide to increase the share capital. The shareholders may choose to increase:
• the authorized share capital: this is the amount of shares which the PT PMA potentially can issue to shareholders; and/or
• the issued / paid-up share capital: the is the amount of shares which is actually issued by the PT PMA to shareholders.
The increase of share capital leads to a change of the articles of association of the company. Therefore, in the minutes of the EGMS or circular resolution, it should be clearly stated which articles of the articles of association of the PT PMA are changed. The minutes of the EGMS or circular resolution will need to be legalized by way of a notary deed.
Process at the Ministry of Law and Human Rights
Approval by the Ministry
Generally the increase of share capital will require approval from the Ministry of Law and Human Rights. The PT PMA must submit the application for approval of the changes of the articles of association within 30 days as of the date of the notarial deed to the Ministry of Law and Human Rights. The ministry shall provide its approval or rejection within a time period of approximately 14 days after receipt of the complete documents by the ministry.
Change of Company Data in the Register of Companies
Upon approval by the Ministry of Law and Human Rights of the change of the articles of association of the PT PMA, the company data in the Register of Companies is updated by the ministry as well. Amongst other information, the Register of Companies includes data about:
• the numbers and dates of the deeds of amendments of the articles of association of the PT PMA; and
• the full names and addresses of Companies’ shareholders
Process at the investment authority (BKPM)
The new BKPM Regulation number 14 of 2015 regarding the Guidelines and Procedures for the Investment Principle Permit requires an amendment of the principle investment license, in case of a change of shareholder and change of amount of capital of the PT PMA.
This column is provided by PNB Law Firm Jakarta