INDONESIA Law and Practice Contributed by: Agus Ahadi Deradjat, Gustaaf Reerink and Adri Dharma, ABNR Counsellors at Law
4.3 Disclosure and Reporting Obligations During the establishment of an Indonesian company, the founders are required to disclose information and documentation related to the shareholders of the company (including foreign investors), as well as the ultimate individual beneficiary owner of the company, to the Ministry of Law, which oversees the legalisation of companies in Indonesia. Once operational, the company must report periodi - cally to the BKPM on the realisation of its investment in Indonesia. Additionally, every company must also declare its ulti - mate beneficial owner (UBO) to the Ministry of Law. A UBO is defined as an individual who: • holds more than 25% of the shares in the company as stated in the articles of association; • has more than 25% of the voting rights in the company; • receives more than 25% of the annual income or profit earned by the company; • has the authority to appoint, replace or dismiss members of the BOD and/or BOC; • has the authority or power to influence or control the company without obtaining authorisation from any party; • receives benefits from the company; and/or • is the true owner of the source of funds for the company’s shares. Information on the UBO is accessible to the public through the Ministry of Law’s website.
day-to-day operations of the company, and (ii) a BOC, which supervises the management of the company carried out by the BOD. A foreign investor can only invest in a limited liability company. 4.2 Relationship Between Companies and Minority Investors Rights of Minority Investors Under the Company Law, minority investors (share - holders) in an Indonesian company are to be treated equivalently to other investors, enjoying the same rights as vested in the shares they hold unless oth - erwise stipulated in the articles of association of the company. The Company Law includes specific provisions to protect the rights of minority investors in an Indone - sian company. Pursuant to the Company Law, one or more shareholders collectively representing at least one-tenth of the total issued shares with valid voting rights (or any smaller amount as provided for in the articles of association) are entitled to: • request the holding of a GMS; • act on behalf of the company to file a lawsuit with a district court against a member of the BOD or BOC, whose fault or negligence has caused a financial loss to the company; • request a district court to investigate the company, a director or a commissioner if the shareholders believe that they have committed an unlawful act that has caused a financial loss to the company, the shareholders or a third party; and • submit a request to the GMS to dissolve the com - pany. The foregoing rights are also applicable to minority shareholders of a public company. Typical minority shareholders’ rights for a public company are the rights to participate in an MTO (in the event of an acquisi - tion) and be classified as independent shareholders. Certain transactions, including conflict of interest and affiliated party transactions deemed material (which amount to more than 50% of the public company’s equity), must obtain prior approval from the independ - ent shareholders at a shareholders’ meeting.
5. Capital Markets 5.1 Capital Markets Overview
The Indonesian capital markets are mainly governed by the Capital Markets Law. Capital market activities in Indonesia are regulated and supervised by the OJK, which oversees capital market activities and partici - pants including the Indonesian Stock Exchange (IDX), Indonesian Central Securities Depository ( Kustodian Sentral Efek Indonesia (KSEI)), Indonesian Clearing and Guarantee Corporation ( Kliring Penjaminan Efek Indonesia (KPEI)), brokers and other participants
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