The Government has made various changes to Indonesia’s regulatory regime for reporting the beneficial ownership of companies and certain other legal entities.
The changes have been made in response to findings that Indonesia’s previous requirements for reporting beneficial ownership failed to meet international disclosure standards that are now binding upon Indonesia.
Placing greater emphasis on correctly identifying the beneficial owners of companies and certain other legal entities would also seem to be consistent with the Government’s increasingly urgent efforts to expand the existing, very narrow Indonesian tax base in an endeavor to ensure higher tax revenues and, hence, greater fiscal stability at a time of deteriorating economic prospects for Indonesia.
Given that the so-called “extractive industries” are an important focus of international initiatives to improve beneficial ownership disclosure, the recent changes are particularly important for companies, active in the local mining and oil & gas industries, to understand. That said, the changes are equally applicable to all Indonesian companies and other relevant Indonesian legal entities, regardless of industry category.
In this article, the writer will review the main changes to Indonesia’s regulatory regime for reporting beneficial ownership before considering what the changes, arguably, tell us about the Government’s level of commitment to improved disclosure of beneficial ownership. Readers need to ask themselves whether Indonesia is really moving forwards or, in fact, perhaps backwards when it comes to ensuring improved disclosure and reporting of beneficial ownership.
Author:
Bill Sullivan
Email: bsullivan@cteolaw.com