“A foreigner or foreign legal entity may establish a foundation in Indonesia personally or with the Indonesian Citizenship or Indonesian legal entity. The essential things in establishing a foundation by foreigners are having a separate asset minimum of IDR 100 million, one of the management structures is Indonesian, and the foreigner who held a position as a trustee, management, and supervisor should have a valid stay permit (KITAS) in Indonesia.”
A. Definition and Organ of the Foundation
According to Indonesia Law No. 16 of 2001 concerning Foundations as amended to Law No. 28 of 2004 Foundations (“Foundation Law“) means legal entity that has assets set aside and used to achieve specific objectives in the social, religious, and humanitarian fields, and has no members However, like other legal entities such as limited liability companies, foundation legal entities also have organs including: supervisors, administrators and supervisors who have their respective duties and obligations. Foundations must also be established and domiciled in Indonesia as regulated by the Foundation’s Articles of Association.
a. Organ
According to Article 2 of Foundation Law, the Foundation has are 3 (three) organs following:
1. Trustees
Trustees is an organ of is an organ of the Foundation which is an individual who acts as the founder of the Foundation or those who, based on the decision of a meeting of the supervisory members, are deemed to have high dedication to achieving the aims and objectives of the Foundation. Trustee have the authority to :
- Decision on the change in the article of association
- Appointment and relief of executives and supervisors
- Stipulation of general policies of a foundation on the foundation
- Endorsement of working programs and draft annual budget of a foundation
- Stipulation of decision on the merger or dissolution of a foundation
2. Management
Management is an individual who carries out the management of the Foundation who is appointed by the Trustees based on the decision of the Trustees meeting for a period of 5 (five) years and can be reappointed for 1 (one) term of office. Management have authority to :
- Take full responsibility for the management of the Foundation for the interests and objectives of the Foundation and have the right to represent the Foundation both inside and outside the court
- Each Management carries out their duties with good faith and fully responsible for the interests and objectives of the Foundation
- The management can appoint and dismiss those implementing Foundation activities
- Each Management is fully personally responsible if the person concerned in carrying out their duties does not comply with the provisions of the Articles of Association, which results in losses to the Foundation or third parties
3. Supervisors
Supervisors is an organ of a foundation having the task of supervising and giving advice to management in undertaking activities of a foundation. Supervisors have authority to :
- Supervisor can relieve provisionally management by mentioning reasons. The provisional must be reported in writing to Trustees not later than 7 (seven) days from the date of the provisional relief
- Supervisor can revoke the decision on the provisional relief
- Supervisor can relieve the relevant Trustees
b. Establishment
According to Indonesian Foundation Law there several stages to establish an foundation such as :
a. Establishment
The establishment of a foundation is based on the agreement of the founders to carry out activities such as: social, religious and humanitarian or a will. The founding process is carried out with a deed made in Indonesian by a notary. In the founding process, the Foundation requires assets and initial capital of IDR 10 Million.
b. Legalization/Validation
Before becoming a legal entity, a foundation must first obtain legalization in which the founder or his attorney submits an application to the Minister of Law and Human Rights via a notary who makes the deed of establishment of the foundation. If the Foundation has not yet obtained legal entity status, all actions of the Foundation are the joint responsibility of the Management.
c. Announcement
The Deed of Establishment of a foundation that has been legalized as a legal entity must be published in the Supplement to Statute Book of the Republic of Indonesia. The announcement was made by the Minister of Law and Human Rights within a period of no later than 14 days from the time the deed of establishment was ratified.
B. Establishment of the Foreign Foundation
A foreigner and foreign legal entity may establish a foundation in Indonesia personally or with the Indonesian Citizenship or Indonesian legal entity. Based on Article 11 of Government Regulation No.63 Year 2008, which was amended by Government Regulation No.2 Year 2013 (“GR Foundation“), the Foundation established by foreigner or foreign legal entities need to fulfil several requirements, such as:
a. Requirement
- Identity of the founder as proven by a valid passport, or validity of the foreign legal entity establishment such as Articles of Incorporation for the foreign legal entity.
- Separation of a portion of the founder’s personal assets which are used as the Foundation’s initial assets of at least IDR 100 millions as evidenced by the founder’s statement regarding the validity of the assets
- Statement letter from the founder that the activities of the Foundation being established do not harm the people, nation ,and state of Indonesia
b. Membership
There are several differences between the membership of foundations founded by foreigners and foundations founded by Indonesian citizens, such as :
- One member of the Management who serves as chairman, secretary or treasurer must be an Indonesian citizen;
- Members of the Foundation Management must reside in Indonesia;
- Members of the Foundation Management who are foreign citizens must have permission to carry out activities or business in the territory of the Republic of Indonesia and be holders of Temporary Stay Permit Cards;
- Trustees and Foundation Supervisor members who are foreign nationals, if residing in Indonesia must have permission to carry out activities or business in the territory of the Republic of Indonesia and be holders of a Temporary Stay Permit Card (KITAS).
Author: Rifat Syahrofi
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