Beneficial Ownership in Indonesia: Who Is Considered a Corporate Beneficial Owner?

A company's formal ownership structure does not always identify the individual who actually controls or economically benefits from the company.

For example, an individual may not appear as a majority shareholder of an Indonesian limited liability company but may nevertheless have the authority to appoint management, control important corporate decisions, receive economic benefits, or ultimately own the funds used to acquire the shares.

This is where the concept of beneficial ownership becomes important.

Presidential Regulation No. 13 of 2018 defines a Beneficial Owner by reference to the individual who can appoint or dismiss corporate management, exercise control over the corporation, directly or indirectly receive benefits from it, or ultimately owns the corporation's funds or shares. This framework remains in force and was strengthened through Minister of Law Regulation No. 2 of 2025 on Verification and Supervision of Corporate Beneficial Owners.

A Beneficial Owner Is Not Necessarily the Registered Shareholder

One common misconception is that a beneficial owner must always be the same person whose name appears in the company's shareholder register or corporate deed.

Sometimes they are the same person, but not always.

A registered shareholder is the party that formally holds the shares. Beneficial ownership looks beyond formal ownership to identify the natural person who ultimately owns or controls the underlying interest.

Minister of Law and Human Rights Regulation No. 15 of 2019 expressly recognizes both direct and indirect ownership. An individual may therefore qualify as the beneficial owner of a company even where the relevant interest is held through another corporate entity.

Beneficial ownership analysis therefore should not stop at asking who appears on the shareholder register.

The next question is who ultimately stands behind that ownership structure.

Who Qualifies as a Beneficial Owner of a Limited Liability Company?

For an Indonesian limited liability company, an individual may qualify as a Beneficial Owner if one or more of the applicable criteria are met.

The criteria include an individual who:

• owns more than 25% of the company's shares;

• holds more than 25% of the voting rights;

• receives more than 25% of the company's annual profit;

• has authority to appoint, replace, or dismiss members of the Board of Directors or Board of Commissioners;

• can influence or control the company without requiring authorization from another party;

• receives benefits from the company; and/or

• is the true owner of the funds used for the ownership of the company's shares.

Official AHU guidance confirms that satisfying one of these criteria may be sufficient. An individual does not necessarily need to hold more than 25% of the shares and exercise control at the same time.

The 25% Threshold Is Not the Only Test

The 25% threshold receives considerable attention in beneficial ownership discussions.

It is not, however, the only relevant test.

An individual might hold only 10% of the shares but possess contractual or practical authority to determine the composition of management or exercise decisive control over material corporate decisions.

In those circumstances, the control criteria may still be relevant even though the person's shareholding falls below 25%.

Conversely, the person appearing as the formal shareholder may not necessarily be the individual who ultimately provided the funds or receives the economic benefits.

Minister of Law Regulation No. 2 of 2025 therefore approaches beneficial ownership through both ownership and control.

A Beneficial Owner May Not Appear in the Corporate Documents

The beneficial ownership framework is particularly important where an individual exercises control without appearing as a shareholder, director, or commissioner.

The explanatory material to Minister of Law Regulation No. 2 of 2025 expressly recognizes that a beneficial owner may be an individual whose name does not appear in the corporation's formal documents but who ultimately owns or controls the entity.

For transactions such as investments, acquisitions, financing, joint ventures, and corporate due diligence, the analysis may therefore need to consider:

• sources of ownership funding;

• holding-company structures;

• relationships between shareholders;

• voting arrangements;

• management appointment rights;

• veto or other control rights;

• economic beneficiaries; and

• persons who in practice determine material corporate decisions.

Ownership through Another Company

A company's shares are frequently owned by another legal entity.

For example, PT A may be owned by PT B, while PT B is ultimately owned or controlled by an individual.

The beneficial ownership analysis should not stop at PT B.

The structure needs to be traced until the relevant natural person who ultimately owns or controls the interest can be identified.

Minister of Law and Human Rights Regulation No. 15 of 2019 recognizes both direct and indirect ownership and includes official examples illustrating beneficial ownership through intermediary corporations.

This becomes particularly important in corporate groups, foreign investments, joint ventures, holding-company structures, and arrangements involving several layers of entities.

Can a Foreign National Be a Beneficial Owner?

Yes.

Official AHU guidance confirms that a foreign national may be designated as a Beneficial Owner.

An Indonesian company with foreign ownership may therefore need to trace its ownership structure to the relevant individual outside Indonesia.

The key question is not nationality, but whether that individual satisfies the ownership, control, economic-benefit, or ultimate-ownership criteria under the applicable regulations.

A Company May Have More Than One Beneficial Owner

Beneficial ownership does not necessarily involve identifying a single individual.

Where several individuals independently satisfy the criteria, a company may have more than one beneficial owner.

For example, if two shareholders each hold 40% of the shares, both exceed the relevant ownership threshold.

Likewise, one individual may qualify based on shareholding while another individual qualifies because of control rights.

Beneficial ownership reporting should therefore reflect the actual structure rather than identifying only one individual for administrative convenience.

Which Corporations Are Subject to the Requirement?

The beneficial ownership requirement extends beyond limited liability companies.

Minister of Law Regulation No. 2 of 2025 applies to:

• limited liability companies, including ordinary capital companies and individual companies;

• foundations;

• associations;

• cooperatives;

• limited partnerships;

• firms; and

• civil partnerships.

Each corporation must identify and verify its Beneficial Owner, formally determine the relevant individual or individuals, and report that information to the Minister of Law.

Reporting Is Not a One-Time Exercise

Beneficial ownership compliance does not end once information has been submitted at the company's establishment.

Minister of Law Regulation No. 2 of 2025 requires corporations to update beneficial ownership information periodically at least once each year.

Corporations must also maintain beneficial ownership documentation and complete the prescribed beneficial ownership questionnaire.

Changes in ownership, corporate-group restructurings, new investments, or changes in control may therefore require the beneficial ownership position to be reviewed.

Verification of Beneficial Ownership Information

A significant development introduced by the current framework is the increased emphasis on verification and data accuracy.

Under Minister of Law Regulation No. 2 of 2025, the Directorate General of General Legal Administration may process and analyse beneficial ownership reports and questionnaires.

Information may be checked against identification data including national identification numbers, tax identification numbers, and other identity documents. The Directorate General may also coordinate with other competent authorities and conduct data examinations, with priority given to higher-risk corporations.

Beneficial ownership reporting should therefore not be treated merely as an administrative declaration.

The reported information should be capable of being supported by the company's actual ownership, governance, and corporate documentation.

Consequences of Failure to Report or Inaccurate Information

Minister of Law Regulation No. 2 of 2025 introduced stronger administrative consequences for non-compliance.

Sanctions may apply to corporations that fail to report their Beneficial Owners or submit incorrect beneficial ownership information.

The sanctions consist of:

• a warning;

• placement on a blacklist; and

• blocking of access to AHU Online.

The sanctions are generally imposed progressively, although the Minister may in certain circumstances impose a sanction without following the ordinary sequence.

Blocking AHU Online can have significant operational consequences.

The explanatory material to the regulation states that blocking can prevent a corporation from processing changes to its articles of association, management, ownership, and other corporate information through the system.

Beneficial ownership compliance can therefore directly affect a company's ability to implement corporate actions.

Why Beneficial Ownership Matters in 2026

Beneficial ownership transparency remains a significant government compliance priority.

In April 2026, the Directorate General of General Legal Administration stated that approximately 823,000 corporations had not yet reported their beneficial owners.

The issue is therefore increasingly relevant not only to anti-money laundering compliance, but also to corporate governance, investment transactions, financing, due diligence, and commercial transparency.

AHU also provides an online facility for searching corporate beneficial ownership profiles as part of its corporate information system.

What Should Companies Do?

Companies should begin by mapping their ownership structure through to the ultimate individual owners.

Where holding companies or several corporate layers are involved, the analysis should continue until the ultimate beneficial owner can be identified.

Control arrangements should then be reviewed independently of shareholding percentages. Shareholders' agreements, voting arrangements, veto rights, management appointment rights, and other mechanisms may indicate control.

Companies should also document the basis on which each beneficial owner has been identified. Corporate charts, shareholder registers, agreements, funding documents, and supporting records should remain consistent with the information reported through AHU.

The beneficial ownership position should be reviewed following restructurings, investments, mergers, acquisitions, and other changes affecting ownership or control.

Annual updates should also be completed so that the information maintained in AHU Online continues to reflect the company's actual position.

Conclusion

Beneficial ownership ultimately concerns identifying the natural person who owns, controls, or economically benefits from a corporation.

The person named in the shareholder register will not always provide the complete answer.

Ownership above 25% is one important indicator, but voting rights, management appointment powers, practical control, economic benefits, the true ownership of funds, and indirect ownership structures must also be considered.

With verification and supervision becoming more robust, companies should treat beneficial ownership reporting as an ongoing component of corporate governance and compliance rather than a one-time administrative formality.