INDONESIA Law and Practice Contributed by: Yogi Sudrajat Marsono, Heru Pamungkas, Agnes Maria Wardhana and Andin Aditya Rahman, Assegaf Hamzah & Partners
maximum of 20% of the total value of the real estate assets to be purchased. 5.4 Minimum Capital Requirement PMA Companies must have a minimum issued and paid-up capital of IDR10 billion upon estab - lishment. PMA Companies are also subject to minimum investment values (regulated in the Minister of Investment/Investment Coordinating Board Regulation No 4 of 2021 on Guidelines and Procedures for Risk-Based Business Licensing Services and Investment Facilities) of more than IDR10 billion, exclusive of land and buildings, for each business scope. Investment values can be in the form of shareholder capital, loans and/or other sources of funds. 5.5 Applicable Governance Requirements PMA Companies are subject to the following governance requirements. • Each company is required to obtain the relevant business licence based on a risk- based assessment of each business scope engaged. Before obtaining a business licence, companies must first meet the basic requirements of KKPR, environment approval and a building licence – ie, a building con - struction permit and a certificate of building worthiness. • Investment reporting must be conducted quarterly through the OSS system adminis - tered by the Ministry of Investment, outlin - ing the company’s realisation of investment in the particular quarter (ie, any purchase of machineries), use of manpower, produc - tion and distribution of goods/services, and export realisation (as applicable).
• Presidential Regulation No 13 of 2018 on Implementation of Know-Your-Beneficial- Owner Principle by Corporation for the purpose of Prevention and Eradication of Money Laundering and Terrorism Financing mandates the disclosure of PMA Companies’ ultimate beneficiary owners (UBO) to the Min - istry of Law and Human Rights. 5.6 Annual Entity Maintenance and Accounting Compliance Apart from taxes, Indonesian legislation does not mandate any annual entity maintenance fee pay - able to the government. Regarding accounting compliance, the Compa - nies Law mandates that directors of a company must submit an annual report, including finan - cial statements, within six months after the end of the company’s financial year. These financial statements must adhere to standard account - ing guidelines. Furthermore, the financial report must undergo auditing by a certified public accountant if the company: • collects or manages public funds; • issues debt acknowledgment letters to the public; • is publicly listed or state-owned; or • possesses assets and/or total business turnover of at least IDR50 billion. 6. Commercial Leases 6.1 Types of Arrangements Allowing the Use of Real Estate for a Limited Period of Time The prevailing regulations acknowledge vari - ous arrangements, such as lease, lease to build and lease-to-own, which are applicable to real
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