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Using a Nominee for Your Company in Indonesia

Understanding Nominee Companies in Indonesia: What You Need to Know

Expanding your business in Indonesia often requires navigating complex legal frameworks, especially when it comes to company ownership regulations. One popular solution for foreign investors is utilizing a nominee company structure. But what exactly does this mean, and how does it work? This guide breaks down everything you need to know about nominee companies in Indonesia.

What is a Nominee Company in Indonesia?

A nominee company is a legal arrangement where an Indonesian entity or individual holds shares on behalf of a foreign investor. This structure allows foreigners to operate businesses in industries that have ownership restrictions while remaining compliant with local regulations.

Why Use a Nominee Company?

Indonesia’s Negative Investment List (DNI) sets restrictions on foreign ownership in certain industries. If your business falls under these limitations, a nominee arrangement enables you to run operations legally without needing direct ownership.

Key benefits include:

  • Compliance with Indonesian law – Avoid complications with foreign ownership restrictions.

  • Smooth business setup – Faster company registration process compared to a fully foreign-owned entity.

  • Lower investment capital – Some industries require significant capital for foreign ownership, which can be minimized with a nominee.

  • Confidentiality – The nominee structure can provide an extra layer of privacy for business operations.

How Does a Nominee Agreement Work?

A nominee shareholder agreement (NSA) is the legal document that outlines the terms of the arrangement. It typically includes:

  • A declaration that the nominee holds shares on behalf of the foreign investor.

  • A power of attorney allows the investor to control business decisions.

  • A trust agreement ensures the foreign investor retains full ownership rights over profits and operations.

Legal Considerations and Risks

While nominee structures are widely used, it’s essential to work with reputable legal service providers to avoid potential risks such as:

  • Lack of control – Ensure agreements are properly drafted to protect your interests.

  • Regulatory compliance – Indonesian law requires transparency in business operations.

  • Trust issues – Work only with trusted nominee service providers to safeguard your investment.

Alternatives to Nominee Companies

  • If you prefer full ownership, you can consider setting up a PT PMA (Foreign-Owned Company). This structure allows foreign investors to have 100% ownership but requires compliance with minimum capital investment rules.

How We Can Help

  • Navigating Indonesian business laws can be challenging, but our team of legal experts can assist you in structuring a compliant and secure nominee arrangement. Whether you need assistance with contracts, legal due diligence, or PT PMA setup, we’re here to help.

Get in touch today to discuss the best solution for your business in Indonesia!

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