Transferring the ownership of a company based in Indonesia is a complex process which must be completed very carefully in order to avoid any possible problems from taking place. Ownership of an Indonesian company is in the form of shares. Thus, when shareholders transfer ownership of their shares, they are actually transferring a part of their rights to the company’s ownership.

Before the share transfer may begin, a Sales and Purchase Agreement must be signed. Many company owners in Indonesia incorrectly believe that this step signals the end of the transfer of share ownership; however, such is definitely not the case. At this point, share ownership of the Indonesian company has not yet been completely transferred to the new shareholder.

Share Transfer Requirements in Indonesia

All shareholders of companies in Indonesia are to fulfill certain requirements as stated in Article 57, Paragraph 1, Law No. 40 of 2007 (also known as the Company Law) concerning limited liability companies before they may transfer any shares. One of these is that shareholders are to offer their shares which they plan to sell to other shareholders within the same company before proceeding to offer them to anyone else. Before the shareholders of an Indonesian company may sell any shares, they must also have received the approval of the company. Approval from the governing authorities according to the laws and regulations which exist in Indonesia today will also be required. Once these requirements have been fulfilled, the transfer of the shares will be made official.


Transferring the Shares of an Indonesian Company

Article 56, Paragraph 1 of the Company Law states the details regarding the transferring of shares of an Indonesian company. It mentions that all share transfers in Indonesia are to be done through the execution of a deed of share transfer. A copy of this deed of share transfer is then to be sent to the company in written form. Once all parties involved have signed the deed of share transfer, there are several more steps to be completed before the shares can officially be transferred. The company’s board of directors must first register the transfer of rights as they relate to the company’s shares. When doing so, the date of the share rights transfers must be specified. The board of directors is also to notify any relevant authorities about the changes which have been made to the identity of the company’s shareholders within 30 days of the signing of the deed. If such a notification is not made punctually, the authorities are to reject any application for notification or approval which relates to changes in the identities of shareholders of which they have no prior knowledge.

Even after the buyers and sellers of the shares have signed the deed of share transfer, the shares are not transferred automatically. This is because according to Article 612 of the Indonesian Civil Code, such transfers are to take place through a single change of ownership which is carried out by either the owner or someone who is acting on behalf of the owner. Therefore, it is only after the delivery of the shares that the ownership rights over those same shares will be transferred to the buyer of the shares. Such transfers are made official through the delivery of a share certificate to the buyer of the shares.

Owning shares of an Indonesian company is a way for one to own part of a company based in Indonesia. However, those who would rather have full control over the company should incorporate one. If you are someone who is interested in doing so, we at Paul Hype Page & Co are always ready to attend to your needs. We will assist you with the incorporation of your new company in Indonesia. Our services are well-regarded by many, so you can be assured that you will receive high-quality services when we work with you towards your Indonesia-based company’s incorporation.