Doing Business in Indonesia: 3 Types of Local Nominees

Many businesses may have heard of local nominee directors, commissioners and shareholders in Indonesia as they are foreigners’ favored form when it comes to doing business in the country. However, this type of business formation comes with strict regulations. For this reason, it is of significant importance that foreigners have a deeper understanding of what local nominee is and how it works before jumping right into it. 
Cekindo has laid out what you need to know in the guideline below.

Definition of Local Nominees in Indonesia

Local nominees mean local companies or individuals who become the shareholders, directors, or commissioner of another company on behalf of foreigners. The local nominees do not own any direct rights and authority over the company -- they only act as the representatives of the real directors, shareholders and commissioner.

Types of Local Nominees in Indonesia

In Indonesia, you can find three types of local nominee. Note that foreign directors need to get a KITAS or work permit before they are eligible to work in Indonesia.

1. Local nominee director

A local nominee director serves as the director of a company in Indonesia passively but does not have any managing power of the company. They are not allowed to be the bank account signatories of the company. 
Since foreign directors will have to obtain a work permit or KITAS before they are allowed to work in Indonesia, both foreign or local companies require a minimum of one local director in the company. Therefore, before a foreign director can get a KITAS, you can either include the name of an Indonesian in the incorporation documents, or opt for a local nominee director service. It is fine to change the director afterwards.

2. Local nominee commissioner

A local nominee commissioner serves as the commissioner of a company in Indonesia on behalf of the true commissioner. The commissioner supervises the company and director’s activities. 
A local nominee commissioner service is ideal for foreigners who want to establish a local company instead of a foreign company PT PMA. The local nominee commissioner can not be the same individual as the local nominee director. 

3. Local nominee shareholder

A local nominee shareholder serves as the registered shareholder of a company, representing the real shareholder on legal documents. Just like nominee directors and nominee commissioners, their roles are passive, and they do not have any power to control or manage the company. 

How to Use Local Nominee Services Safely 

We couldn’t emphasize more that you need to be extremely cautious when choosing a local nominee Indonesia even though it is a very common practice. Here are the things that you can do to ensure the safe use of a local nominee service:
  • Do some research and find your company a trusted nominee services provider. 
  • Create legal agreement between you and the nominee to safeguard your assets, ownership and rights of the company. The agreement has to be drafted via a registered and credible legal counsel. 
                 Read also: How Local Nominee Company Works for PT PMA

Local Nominee Service from Cekindo

Cekindo offers local nominee services that help you find the most trustworthy local nominees.We will provide you with a list of nominees that you can choose from, and then we will take care of all legal arrangements. The local nominee agreement will then serve as a legal mediator to distribute ownership, control, and income between the true owners and the nominees.
We also help you draft the agreements between you and the nominee to make sure that all your rights are protected. You should always be careful when it comes to choosing a nominee service -- and Cekindo is your go-to and worry-free solution.
Connect with Cekindo’s one of experienced legal consultants now and we will ensure that your local nominee arrangements are done legally and safely without any future risks. 

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