New Beneficial Ownership Regulation in Indonesia 2025: What Businesses Must Know

In an effort to enhance corporate transparency and prevent financial crimes, Indonesia has introduced new regulations on beneficial ownership reporting. The Ministry of Law and Human Rights (MOL) issued Regulation No. 2 of 2025 on the Verification and Supervision of Beneficial Owners of Corporations (“MOL Regulation No. 2/2025), reinforcing compliance requirements for companies operating in Indonesia. This regulatory update aligns with global Anti-Money Laundering (AML) and Counter-Terrorism Financing (CTF) frameworks, ensuring that corporate structures are more transparent and accountable.

Understanding Beneficial Ownership Regulation in Indonesia 2025

Beneficial ownership refers to the individual(s) who ultimately own, control, or benefit from a legal entity, even if their name is not officially listed as the owner. This includes those who have at least 25% of shares or voting rights, have control over financial decisions, or significantly benefit from the company’s operations. MOL Regulation No. 2/2025 expands and strengthens the reporting obligations of legal entities in Indonesia. The primary aim of this regulation is to ensure that businesses disclose their beneficial owners—the individuals who ultimately own, control, or benefit from a company’s operations.

Key Compliance Requirements under Indonesia’s Beneficial Ownership Regulation 2025

The latest regulation introduces substantial modifications to the beneficial ownership reporting framework, affecting corporations operating in Indonesia. The following are the critical changes brought by MOL Regulation No. 2/2025:

1. Shift from Government Oversight to Corporate Accountability

Previously, the Indonesian government played an active role in monitoring beneficial ownership structures, with businesses relying on government agencies to assess and verify their ownership details.

However, under MOL Regulation No. 2/2025, the responsibility now lies directly with corporations. Companies must:

• Identify their beneficial owners and ensure ongoing compliance with disclosure requirements.
• Verify ownership details through internal due diligence procedures rather than relying on government intervention.
• Implement internal compliance mechanisms to maintain up-to-date records of beneficial owners.

This shift increases corporate responsibility and liability, making it essential for businesses to establish robust compliance frameworks to prevent inadvertent violations.

Legal Implications:

Non-compliance can lead to administrative sanctions, including financial penalties or blacklisting from government procurement processes.

Companies need to ensure that corporate governance policies are updated to reflect the new compliance burden.

2. Expansion of Entities Subject to Beneficial Ownership Reporting

Under the previous regulation, beneficial ownership reporting applied only to a limited set of legal entities, such as limited liability companies, foundations, cooperatives, and partnerships.

MOL Regulation No. 2/2025 broadens the scope of covered entities to now include:

• Limited Liability Companies (PT), including PT PMA
• Foundations & Associations
• Cooperatives
• Limited Partnerships (CVs)
• General Partnerships (Firms/Persekutuan Perdata)
• Capital Partnerships (Persekutuan Modal)
• Sole Proprietorships (Usaha Perorangan)

This expansion ensures that all forms of business entities, regardless of size, ownership structure, or industry, are required to identify and disclose their beneficial owners.

Read More:

• Key Post-Incorporation Compliance for Company in Indonesia
• Setting Up a PT PMA in Indonesia: A Complete Guide for Foreign Investors
• Forms of Foreign Direct Investment (FDI) in Indonesia

3. Enhanced Verification & Know-Your-Beneficial-Owner (KYBO) Compliance

MOL Regulation No. 2/2025 mandates corporations to conduct a more rigorous Know-Your-Beneficial-Owner (KYBO) process, which now includes:

• Annual Submission of Beneficial Ownership Data → Companies must update and report their beneficial ownership information every year. The previous regulation did not impose a strict reporting frequency.
• Document Administration → Corporations are now required to maintain comprehensive records related to their beneficial ownership structure.
• Completion of Beneficial Ownership Questionnaires → This serves as a due diligence measure to confirm the accuracy of submitted data.
• Risk-Based Verification Procedures → Companies must implement risk-based assessments to identify potential risks of money laundering, terrorism financing, or illicit financial transactions.

4. Notaries’ New Role in Beneficial Ownership Verification

A major development under MOL Regulation No. 2/2025 is the formal obligation imposed on notaries to play an active role in verifying beneficial ownership data. When assisting in corporate transactions, notaries are now legally required to:

• Verify Beneficial Ownership Information before notarizing corporate documents.
• Complete Beneficial Ownership Questionnaires, ensuring that the disclosed information is accurate and compliant with the regulation.

This measure strengthens corporate integrity by ensuring that independent legal professionals are involved in verifying ownership structures.

5. Revised Government Supervision Mechanisms

The Directorate General of General Legal Administration (Ditjen AHU) under the Ministry of Law and Human Rights is now responsible for:

• Monitoring Compliance through risk-based assessments, prioritizing companies with potential exposure to financial crimes.
• Focusing on Reporting & Updating Requirements rather than micromanaging internal corporate structures.

A notable change is the elimination of direct government involvement in identifying beneficial ownership details. Instead, the government now focuses on ensuring corporations actively submit and update their beneficial ownership information.

6. Introduction of Administrative Sanctions for Non-Compliance

Unlike the previous regulation, which lacked clear penalties, MOL Regulation No. 2/2025 introduces enforceable administrative sanctions for companies failing to comply with beneficial ownership reporting requirements. These sanctions include:

• Official Reprimands – A formal warning issued to non-compliant entities.
• Blacklisting from Government Systems – Companies may be restricted from accessing public procurement contracts or government services.
• Restricted Access to Corporate Registration Services – Authorities may suspend or delay business registrations, amendments, or licensing processes for non-compliant entities.

The introduction of these penalties serves as a deterrent against non-compliance, reinforcing the Indonesian government’s commitment to financial transparency.

Kusuma & Partners assists companies in the General Corporate, Legal Advisory & Legal Compliance matter, ensuring legal interests while complying with all legal requirements.

Implications for Businesses in Indonesia

With MOL Regulation No. 2/2025 now fully effective, businesses operating in Indonesia must take immediate steps to align their corporate governance practices with the updated legal requirements. Failure to comply could result in regulatory sanctions, reputational damage, or even legal consequences.

To ensure compliance, businesses should focus on:

1. Reviewing & Updating Internal Compliance Policies

Companies should revise their internal governance frameworks to ensure accurate identification, documentation, and reporting of beneficial ownership data.

2. Strengthening KYBO Due Diligence Processes

Companies must conduct enhanced due diligence to verify ownership structures and identify potential risks of financial crimes. A risk-based approach should be implemented to evaluate high-risk shareholders or financial transactions.

3. Engaging Legal & Compliance Experts

Given the complexity of regulatory compliance, companies are strongly encouraged to seek legal counsel to:

• Navigate the new reporting requirements.
• Ensure proper corporate documentation and structuring.
• Mitigate potential risks of administrative penalties.

How Kusuma & Partners Can Assist

At Kusuma & Partners Law Firm, we specialize in corporate compliance, legal advisory & legal compliance. Unlike generic compliance services, Kusuma & Partners tailor’s legal strategies to suit each business’s unique corporate structure and operational needs, ensuring seamless regulatory compliance and long-term business success.

Conclusion

MOL Regulation No. 2/2025 marks a significant step towards corporate transparency in Indonesia. Businesses must take proactive measures to comply with the new reporting obligations to avoid legal and financial risks. Consulting with an experienced legal firm like Kusuma & Partners ensures a smooth compliance process and safeguards businesses from regulatory pitfalls.

For expert legal guidance on beneficial ownership reporting and corporate compliance, contact Kusuma & Partners today.

“DISCLAIMER: This content is intended for general informational purposes only and should not be treated as legal advice. For professional advice, please consult us.