Foreigners can establish certain non-profit organizations in Indonesia, but foreign-founded organizations face additional requirements. For most foreign founders seeking their own Indonesian non-profit entity, the main structure is a Yayasan (foundation).
The requirements depend on whether the founder is a foreign individual or a foreign legal entity, as well as the activities the foundation will conduct.
Can a Foreigner Establish a Yayasan in Indonesia?
Yes, but the requirements differ for foreign individuals and foreign legal entities.
A foreign individual establishing a Yayasan, either alone or together with an Indonesian individual, must have lived in Indonesia for at least five consecutive years and hold a permanent stay permit. The foundation must have at least IDR 1 billion (USD 56,800) in initial assets, separated from the founder’s personal assets.
A foreign legal entity must have operated in Indonesia for at least five consecutive years. The foundation must have at least IDR 10 billion (USD 568,000) in initial assets, separated from the founder’s assets.
How Must a Foreign-Founded Yayasan Be Governed?
A Yayasan does not have shareholders. Its governance is divided between the Pembina (Board of Trustees), Pengurus (Management Board), and Pengawas (Supervisory Board).
Planning to establish a foundation in Indonesia? Contact MAP Resources Indonesia at info@mapresourcesindonesia.com
For a Yayasan established by a foreign individual, or jointly by a foreign and Indonesian individual, at least one of the positions of chairperson, secretary, or treasurer must be held by an Indonesian citizen. Members of the Pengurus must also reside in Indonesia.
Foreign nationals holding positions in the foundation must meet the immigration and other requirements applicable to their roles.
Can a Foreigner Establish a Perkumpulan Instead?
A Perkumpulan is a membership-based association rather than an asset-based foundation. Indonesia has a legal framework for establishing and registering Perkumpulan, but foreign sponsors should not assume that it can be used instead of a Yayasan.
The rules specifically governing organizations established by foreign nationals focus on Yayasan structures.
Foreign organizations that do not qualify to establish their own Yayasan can instead work with an existing Indonesian organization.
A PT PMA (foreign-owned limited liability company) serves a different purpose and is relevant where the planned Indonesian operation is commercial rather than non-profit.
How Do You Register a Foreign-Founded Yayasan?
The founders first determine the foundation’s name, purpose, initial assets, registered address, and governance structure. These details are included in its Articles of Association.
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An Indonesian notary prepares the establishment deed, and the application for legal-entity approval is submitted through Indonesia’s legal-entity administration system.
After approval, the foundation can complete its tax registration and any registrations or licenses required for its activities.
When Does a Foundation Need Additional Licenses?
A foundation operating a school, healthcare facility, social-service facility, or another regulated activity can require separate approval from the government authority responsible for that sector.
Where the activity falls within Indonesia’s risk-based licensing system, licensing through OSS may also be required.
Can a Foreign-Founded Yayasan Receive Foreign Funding?
A foreign-founded Yayasan can receive funding from abroad, but the source, purpose, and use of the funds must be properly documented.
The foundation’s assets must remain separate from the personal assets of its founders and governing bodies. Its assets cannot be distributed to founders as profits.
What Tax Obligations Can Apply to a Yayasan?
Being a non-profit does not automatically make a Yayasan exempt from Indonesian taxes.
A Yayasan can still have corporate income tax, VAT, or withholding tax obligations depending on its income and activities.
What Must a Yayasan Do After Registration?
A Yayasan must maintain financial records and meet the reporting requirements that apply to its activities and funding. Changes to its Articles of Association or to its governing bodies may also need to be reported to or approved through the legal-entity administration system.
If the foundation employs staff, Indonesian employment requirements apply. Foreign employees must also have the immigration status and work authorization required for their roles.
Establish a Foundation with MAP Resources Indonesia
MAP Resources Indonesia helps foreign organizations determine whether they can establish a Yayasan in Indonesia and complete the required establishment and licensing process. Contact us at info@mapresourcesindonesia.com to discuss your foundation in Indonesia.
