Rahmi Jened and Betharia Noor Indahsari (2019) The Practice of Beneficial Ownership and Its Legal Effect According to Indonesian Law. In: Asean Law Academy 2019, 14-24 Agustus 2019, National University of Singapore. (Submitted)

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Abstract

Just earlier last year, the President of Indonesia, Joko Widodo, issued Presidential Regulation Number 13 of the Year 2018 on the Implementation of Corporation Beneficial Owner Recognition Principle in the Framework of Prevention and Eradication of Money Laundering and Terrorist Financing Crime. How these laws affect the practice of BO and nominee arrangement in Indonesia there after and how their provisions connect to the provisions of the latest Presidential Regulation are the main topics that this paper aims to discuss. This paper is in the area of business law, capital investment and corporate law, This research is normative and empirical legal research. Normative legal research is mainly library research which was conducted at the Law Faculty of Airlangga University, Indonesia. This research employed statutory approach and conceptual approach by using a number of selected books and international journals , international agreement and international convention. Whereas empirical legal research is conducted in Jakarta city to study in Heritage Hall (Balai Harta Peninggalan ) and Directorate General Law Adminstration Affairs of Ministry of Law and Human Rights, where Shareholder and Director of Corporation registered. There are several findings from the research. The practice of Beneficial Ownership (BO) has long been employed in Indonesia, by foreigners and natives alike, and usually, with the cooperation between the both sides regarding with Foreign Direct Investment (FDI) activities.BO utilizes a nominee clause arrangement where the beneficial owner appoints, or ‘nominees’, someone to act on their behalf. This nominee arrangement can be implemented in the form of tax treaty privilege, nominee in land and real property ownership, nominee director or nominee share holder. These practices can lead to various legal consequences, among others the nominee arrangement become “ null and void”.

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