FDI

What is Nominee Shareholder? Is it safe in Indonesia?

Trường Lăng

October 10, 2019

FDI

What is Nominee Shareholder? Is it safe in Indonesia?

Trường Lăng

October 10, 2019

Definition of a nominee shareholder

A nominee shareholder is a person or company that is the registered holder of shares of a company on behalf of the real owner. This means that their name appears on the share certificate and their personal details are logged on all public documentation in place of the actual shareholder. The shareholder, or beneficiary owner, remains totally anonymous. Most of the time, the nominee does not have power in the operational business. 

Two main reasons why company use nominee shareholders in Indonesia

  1. Restrictions on foreign ownership in Indonesia (Negative Investment List)

The total permitted foreign ownership of Indonesian shares depends on a company’s business classification (“KBLI”). This could range from 100 percent open, to completely closed to foreign ownership.

The allowed foreign ownership is regulated by the Negative Investment List (DNI). This means that in order to start a business in an industry that falls under the negative investment list, foreign investors need to have a local partner.

In the event that a business is closed (either partially or completely) to foreign ownership but the investor would still like to maintain 100.0% control, the ideal solution is to start a locally held company using nominee shareholders.

  1. Minimum requirements for capital in Indonesia

To start a foreign company in Indonesia, investors need to submit an investment plan for at least Rp. 10 billion (~US$ 750,000) to show the sustainability of their business. Rp. 2.5 billion (~US$ 190,000) of the investment plan, however, needs to be paid up immediately.

When all shareholders of the company are local nominees, on the other hand, the capital requirements are a lot lower (start from Rp 51 million ~US$ 3,800).

Is it safe to use a nominee shareholder?

Ideally, the investor choosing this structure will work with nominees that they have a very high degree of trust, perhaps a member of the family or someone with whom they have a close personal relationship. It is important to remember that in the eyes of the law, the nominee shareholders are the rightful owners of the business. Using an individual nominee shareholder, especially without a legal set of agreements is very risky. 

However, this does not mean that all nominee arrangements are unsafe. The right kind of nominee agreement is a set of complex legal agreements that protect your assets and are drafted by professionals. 

Do you still have any questions unanswered regarding nominee shareholders in Indonesia? You can always email us!

Related posts

FDI

FDI in Bac Giang: Growth and Impact

Bac Giang’s economic transformation has been nothing short of remarkable, and at the heart of this evolution lies the compelling story of Foreign Direct Investment ...
Read more
FDI

Hai Phong’s FDI Landscape: A Comprehensive View

Hai Phong, situated on the northeastern coast of Vietnam, is currently experiencing a significant influx of foreign direct investment (FDI). This bustling port city has ...
Read more
FDI

FDI in Ba Ria Vung Tau: Unveiling Opportunities

Foreign Direct Investment (FDI) has been a game-changer for Ba Ria Vung Tau, the coastal province in Vietnam. This region has attracted significant foreign capital ...
Read more
FDI

FDI’s Impact on Dong Nai’s Growth

Nestled in the Southeast region of Vietnam, Dong Nai has emerged as a prime destination for Foreign Direct Investment (FDI). With its strategic location and ...
Read more

Download our Latest Ebook about Real Estate and Property!

Real estate holds a pivotal position in the development of a country, not only via the spillover impacts on other economic sectors such as construction, manufacturing, tourism, finance and banking etc. but also affecting the social dynamic by mobilizing the residency and infrastructure system. Foreign direct investment in real estate (RFDI) in Vietnam has a long running history and is unique in that it is largely dominated by the private sector compared to other industries which usually still have a rather large Government involvement. International capital has consistently been selecting real estate as the destination of choice, given that RDI has always been in the top 2 and 3 for volume inflow over the last 10 years, even throughout extremely turbulent periods such as COVID-19, per the General Statistics Office of Vietnam’s (GSO) data. Find out more in this ebook edition.

Tải cuốn ebook mới nhất về nền kinh tế số Việt Nam!

The digital economy of Vietnam has been fueled and accelerated by the global digital trends and the pandemic Covid-19. The movement of digital transformation is underway in every corner of Vietnamese life, strongly influencing the way people do things. Digital economy is the future of the Vietnam economy. Realizing the potential of the digital economy, the Vietnam government has issued policies, guidelines and created legal frameworks to support and further enhance this economy. In this ebook edition, the digital economy is looked at from different angles. Perspectives from the key elements comprising Vietnam digital economy are examined and discovered.

Our Happy Clients