Nominee shareholding and borrowed names
An agreement stating that shares are held for and on behalf of somebody else is declared null and void by the investment law. What can be checked is not whether that agreement holds, but who is recorded as the owner.
At a glance
- The question
- Is it safe to hold a company or land in Indonesia in somebody else’s name?
- Short answer
- No. The statute declares an agreement holding shares for and on behalf of another null and void, and a transfer of freehold land to a foreign national is void with the land falling to the state.
- Where it is checked
- The AHU system for the deed and the shareholders; the land office for the type of title
- What you need
- The latest deed, every agreement that goes with it, and the land certificate where there is one
- What it proves
- Who is recorded as the owner — which is precisely the point at issue
How to check
- Read the latest deed in the AHU system and note who the shareholders are. Those names are the owners in law, whoever provided the money.
- Collect every document that goes with it: the loan agreement, the pledge of shares, the irrevocable power of attorney, the option agreement, and any statement about who really owns what. It is the set that is read, not any one of them.
- Check whether the business line is in fact closed or capped for foreign parties. If it is open, the whole arrangement was never needed.
- If land is involved, check the title. Freehold is for Indonesian citizens only, and a transfer to a foreign national is void with the land falling to the state.
- Ask an advocate — not the party who built the structure — whether what you hold gives you a right anybody can enforce.
How to read the result
- Your name is not in the deed: that is not an administrative oversight, it is the legal position.
- A notary drew up the deed: a notary draws up the deed the parties ask for, and that does not make its contents valid.
- “Everybody here does it” is not a legal position, and it has never been a defence.
- The structure is thorough and the paperwork complete: the more complete the documents, the plainer it is that the shares are held for and on behalf of somebody else.
What it does not prove
- This page does not declare any particular arrangement void. Whether an agreement holds is for a court to decide.
- A company register cannot show you a nominee arrangement, because what it records is the shareholder and not the reason behind them.
- This page accuses nobody. What it states is a consequence the statute attaches, not something a person did.
- No check, here or anywhere else, can tell you who really owns a company.
When it does not match
If the money has not moved, stop and check first whether the business line is actually closed — many nominee structures are built for a problem that does not exist. If the money has moved, what you hold decides what can be done, so keep every document before you speak to an advocate.
On this site
Nothing. We publish companies as they are recorded, and shareholdings and the agreements behind them are not part of that. No page on this site can answer this question.
Already inside an arrangement like this?
What can still be enforced is decided by the documents you hold, and the person who reads them is an advocate — not the party who drafted them.
The rules this summarises
- Law 25/2007 on Investment — article 33(1) and (2), on the nullity of an agreement holding shares for and on behalf of another
- Law 40/2007 on Limited Liability Companies, as amended by Law 6/2023, on the register of shareholders
- Law 5/1960, the Basic Agrarian Law — articles 21 and 26(2)
- Government Regulation 18/2021, for the right of use over a home held by a foreign national
A summary of the rules in force, not legal advice. Rules and thresholds change — check with the relevant authority before you register.
Other checks
PT, CV, cooperative, foundation and the rest: how they differ and what it means for the owner.