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The Indonesian government is currently discussing a draft regulation regarding the Know Your Beneficial Owner Principle. The Draft Regulation aims to implement the principle with the goal to eradicate/prevent money laundry activities and/or terrorism. In this column we discuss the scope of the Know Your Beneficial Owner Principle and the implementation thereof. As this is a draft regulation, the contents of the draft is still subject to changes.
Know Your Beneficial Owner Principle
The Know Your Beneficial Owner Principle (Principle), applies to the following types of companies:
- Limited Liability Companies (e.g. PT or PT PMA)
- Partnerships; and
- other types of companies
The above companies are required to appoint minimum one beneficial owner, which must comply with any or all of the following requirements:
- has the authority to appoint or terminate directors or administrators of the company
- can take control of the company
- is entitled to and/or receives benefits from the company
- is the ultimate owner of the company’s shares or funds
Under certain conditions authorized government officials may appoint other beneficial owners, which do not fulfill any of the above requirements.
The Draft Regulation requires newly established companies to implement the Principle as soon as possible and preferably no later than the date it receives the decree from the Ministry of Law and Human Rights which approves the company establishment. If no information about the beneficial owner can be provided at that time, companies are allowed postpone the provision of such data, by providing a statement letter. All companies must however provide this data not later than 7 days as of the date of the Business License.
Companies are also required to update the data about the beneficial owner on annual basis.
It is not yet clear when this Draft Regulation will be implemented, and which changes will be made to the current content of the regulation. PNB Law Firm will provide an update once the regulation is implemented.
This column is provided by PNB Law Firm Jakarta