Nominee Shareholder Agreement Template for Indonesia

A Nominee Shareholder Agreement is essential when you need to establish a legal framework for nominee shareholding arrangements in Indonesia. This document creates a formal relationship between a nominee shareholder who holds shares on behalf of another party (the beneficial owner) and ensures compliance with Indonesian corporate and investment laws.

When do you need this document?

You need a Nominee Shareholder Agreement when foreign ownership restrictions prevent direct shareholding in certain Indonesian business sectors listed in Presidential Regulation No. 44 of 2016 (Negative Investment List). This arrangement is also necessary when establishing complex corporate structures for tax optimization, privacy protection, or regulatory compliance purposes. The agreement becomes crucial during mergers and acquisitions where temporary nominee arrangements facilitate transactions, or when Indonesian companies require local representation while maintaining foreign beneficial ownership. Additionally, you'll need this document when restructuring existing shareholdings to comply with changing Indonesian investment regulations or when establishing holding company structures that require nominee arrangements for operational efficiency.

Key legal considerations

Your Nominee Shareholder Agreement must clearly define the scope of nominee services, including voting rights, dividend collection, and share transfer procedures. The agreement should establish comprehensive indemnification clauses protecting both parties from potential liabilities arising from the nominee arrangement. You must include detailed provisions for beneficial ownership disclosure to comply with Anti-Money Laundering Law No. 8 of 2010, ensuring transparency with Indonesian authorities. The document should specify termination conditions, succession arrangements, and dispute resolution mechanisms. Critical clauses must address confidentiality obligations, reporting requirements, and procedures for handling regulatory inquiries. You should also include provisions for share transfers back to beneficial owners and establish clear protocols for decision-making processes affecting the underlying shares.

Legal requirements in Indonesia

Under Indonesian Company Law No. 40 of 2007, your Nominee Shareholder Agreement must comply with strict disclosure requirements regarding beneficial ownership and the true nature of shareholding arrangements. The agreement must align with Investment Law No. 25 of 2007, particularly regarding foreign ownership restrictions and legitimate business purposes for nominee structures. You must ensure the arrangement doesn't violate anti-money laundering regulations by maintaining proper documentation and transparency about the beneficial owner's identity. The document requires notarization by an Indonesian notary to ensure legal validity and enforceability. Your agreement must include provisions for compliance with ongoing reporting obligations to relevant Indonesian authorities, including the Ministry of Law and Human Rights and investment coordinating agencies. Additionally, the arrangement must demonstrate legitimate business purposes and cannot be used solely to circumvent foreign ownership restrictions, as this could result in serious legal consequences including potential company dissolution.