Establishing a Foundation by a Foreigner, What are the Requirements?

Jan 20, 2023 | Corporate & Compliance

Foundations as a legal entity engaged in the social, religious and humanitarian fields, can not only be established by Indonesian citizens, but foreigners also have the same opportunity to establish one. Founders of a foundation are one or more people with a portion of their wealth separated to be used as the foundation’s initial wealth. In the Law on Foundations, “person” is defined as an individual or legal entity. Government Regulation Number 63 of 2008 concerning Implementation of the Law on Foundations (PP 63/2008) as amended by Government Regulation Number 2 of 2013 concerning Amendments to Government Regulation Number 63 of 2008 concerning Implementation of the Law on Foundations (PP 2/2013) describes the meaning of “foreigner” is not only limited to individuals, but includes foreign legal entities. Therefore, when a foreigner wants to establish a foundation in Indonesia, the required documents that must be filled will certainly different.

Then, what are the requirements for foreigners in establishing a foundation? There are differences in the required documents between the two types of foreigners that want to establish a foundation, namely:

For Individuals, the required documents are:

  1. identity of the founder as evidenced by a valid passport.
  2. separation of some of the personal assets of the founder which is used as the foundation’s initial wealth of at least IDR 100 million as evidenced by a statement from the founder regarding the legitimacy of these assets.
  3. a statement letter from the founder that the activities of the foundation established will not harm the people, nation and state of Indonesia.

For Legal Entities, the required documents are:

  1. The identity of the foreign legal entity founding the foundation as evidenced by the validity of the legal entity founding the foundation.
  2. Separation of some of the founder’s assets which are used as the foundation’s initial assets of at least IDR 100 million as evidenced by a statement letter from the management of the founding legal entity regarding the legitimacy of the assets.
  3. A statement from the management of the legal entity that the foundation’s activities do not harm the people, nation and state of Indonesia.

In addition to the establishment requirements above, there is an obligation for foreign foundations to elect Indonesian citizens to serve as members of the foundation’s management, namely chairman, secretary or treasurer. Not only that, the board members of the foundation have an obligation to reside in Indonesia. Then, for administrators who are foreign nationals, the person concerned must hold a permit to carry out activities or business in Indonesia and also be a Temporary Stay Permit Card (KITAS) holder. The same thing applies to members of the foundation’s supervisors and supervisors who are foreign nationals if they reside in Indonesia.

Apart from establishing foundations in Indonesia, there are other provisions, foreign foundations that are not incorporated in Indonesia are also allowed to carry out activities in Indonesia, provided that activities carried out in Indonesia are only in the social, religious and humanitarian fields, excluding research and development and foundations. The foundations must be in partnership with a foundation founded by Indonesians who have the same aims and objectives and the partnership must be safe from political, juridical, technical, and security aspects, also carried out in accordance with statutory provisions. Thus, if a foreign foundation wishes to have more flexibility in carrying out its activities in Indonesia, a branch of the foundation must be established as a foundation with Indonesian legal status.

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