Transfer of Ownership of Foreign Shares

Background

The transfer of ownership of foreign shares for a domestic investment company occurs when domestic investment company conducts a change in the company’s capital as a result of the entry of foreign capital which causes some or all the company’s capital becomes a foreign capital.Conversion of Domestic Investment Company to Foreign Investment Company

In the event of the transfer of the foreign shares ownership, the company does not have or has not yet obtained the Principle License or Business License, Article 23 paragraph 1 of the Regulations of the Head of the Investment Coordinating Board or Peraturan Kepala Badan Koordinasi Penanaman Modal (BKPM) No.12 year 2009 (“Perka BKPM 12/2009”) requires the company to conduct Registration of the company’s investment as a result of the changes to One Door Integrated Service or Pelayanan Terpadu Satu Pintu (PTSP) BKPM.

Based on Article 23 paragraph 5 of Perka BKPM 12/2009, upon the application of the Registration, PTSP BKPM could issue:

  1. Registration, if the business type and the percentage of foreign shares ownership complies with the prevailing laws and regulations;
  2. Rejection upon the Registration Letter, if the business type and the foreign shares ownership does not fulfill the regulations in the legislation as contained in the Annex VIIB of Perka BKPM 12/2009.

In the case that the investment company has acquired the Principle License or Business License, Article 23 paragraph 2 of Perka BKPM 12/2009 requires the company to submit an application for Principle License or Business License of the investment as a result of the changes to PTSP BKPM.

If the form of the company’s business is under the authority of provincial government and/or regent/ city government, the company shall attach an Introduction Letter from PTSP Province Investment Territory Device known as Perangkat Daerah Provinsi Penanaman Modal (PDPPM) or PTSP Regency/ City Investment Territory Device known as Perangkat Daerah Kabupaten/Kota (PDKPM) regarding the plan of the entry of foreign capital as contained in the Annex VIIA of Perka BKPM 12/2009 prior to submitting the application. At the latest within 10 (ten) working days PTSP PDPPM or PTSP PDKPM have not issued the Introduction Letter, the company can attach the receipt of such application proposal.

Conversion of Foreign Investment Company to Domestic Investment Company

The transfer of ownership of foreign shares for foreign investment company occurs when a foreign investment company conducts a change in the company’s capital as a result of the release of all the foreign capital which causes the entire company’s capital into domestic capital. In the event that the company has acquired the Registration when the company intends to conduct the transfer of ownership of foreign shares, Article 24 paragraph 1 of Perka BKPM 12/2009 requires the company to conduct Registration of company’s investment as a result of the changes to PTSP BKPM, PTSP PDPPM, or PTSP PDKPM according to its authority. If what is acquired by the company is the Principle License or Business License, then according to Article 24 paragraph 2 of Perka BKPM 12/2009, such company shall propose an application for Principle License or Business License of its investment as a result of the changes to PTSP BKPM, PTSP PDPPM, or PTSP PDKPM according to its authority.

Foreign Investment Company which the type of business is under the authority of provincial government and/or regent/ city government shall attach the Introduction Letter/ Surat Pengantar from PTSP BKPM regarding the plan of the release of all foreign capital prior to the Registration or the proposal of the Principle License or Business License.

 

Renintha Karina

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