Understanding Ministry of Law Regulation No. 49 of 2025: Key Implications for Corporate Compliance

The Ministry of Law of the Republic of Indonesia (MoL) has updated corporate compliance requirements through the issuance of Minister of Law Regulation No. 49 of 2025 on the Terms and Procedures for the Establishment, Amendment, and Dissolution of Legal Entities for Limited Liability Companies (MoL Reg 49/2025). This regulation was issued and came into effect on 17 December 2025, revoking and replacing the previous Ministry of Law and Human Rights Regulation No. 21 of 2021 on the same subject (MoLHR Reg 21/2021). However, pending applications submitted prior to its effective date will continue to be processed under MoLHR Reg 21/2021 pursuant to the transitional provisions.

MoL Reg 49/2025 is an implementing regulation governing the administration of limited liability companies (commonly known as perseroan terbatas) and applies to both joint-capital companies, including foreign capital investment companies, and single shareholder/personal companies. The regulation is intended to align administrative and procedural requirements with current legal practices, while enhancing efficiency and legal certainty for the public, business actors, and other stakeholders.

MoL Reg 49/2025 also reflects a more rigorous approach to corporate compliance, particularly for joint-capital companies. Key updates include the introduction of mandatory beneficial ownership disclosure requirements and the obligation to submit general meeting of shareholders (GMS) approval of a company annual report. The principal updates relevant for compliance are summarized below.

Major Updates in the New Regulation

Submission of a GMS Approval of Annual Report to the MoL

MoL Reg 49/2025 mandates joint-capital companies to formalize the GMS approval of annual report (laporan tahunan) in a notarial deed and to submit such documentation to the MoL through the Legal Entity Administration System (Sistem Administrasi Badan Hukum/ SABH). Upon submission, the MoL will issue a notification receipt of the report.

The preparation of an annual report itself has long been a statutory requirement under Law No. 40 of 2007 on Limited Liability Companies, as amended from time to time (the “Company Law”). Under the Company Law, board of directors (BOD) is required to present the annual report to the GMS, following a review by the board of commissioners (BOC), no later than 6 months after the end of the relevant financial year. This timeline is in line with the requirements under MoL Reg 49/2025.

In practice, the presentation and approval of the annual report by the BoD are typically carried out at the annual GMS, which is convened within the same statutory timeframe. It should also be noted that approval of the annual report may alternatively be obtained through a circular resolution, provided that all shareholders with voting rights unanimously approve the resolution in writing by signing the relevant proposal.

This development represents a procedural enhancement aimed at reinforcing corporate reporting discipline and regulatory oversight. Joint-capital companies are required to submit the notarized GMS approval of the annual report through the SABH within 30 days from the date the deed is executed, together with the approved annual report.

Mandatory Submission of Ultimate Beneficial Owner Documentation

MoL Reg 49/2025 expressly requires the submission of ultimate beneficial owner (UBO) documentation not only at the time of a company’s establishment, but also as a prerequisite for applications involving amendments to the articles of association and changes to corporate data.

This requirement further implements the know your beneficial owner principle, as regulated under Presidential Regulation No. 13 of 2018 and Minister of Law Regulation No. 2 of 2025, which mandate corporations to identify, disclose, and periodically update their UBOs information. Accordingly, mandatory submission of UBO documentation under MoL Reg 49/2025 serves as a more stringent mechanism to reduce the use of nominee arrangements, uncover hidden control, and mitigate the risks associated with shell companies.

Under MoL Reg 49/2025, UBO documentation constitutes mandatory supporting documents that must be submitted together with the relevant application forms for the establishment of a joint-capital company, as well as applications for amendments to the articles of association and changes to corporate data. The required UBO documentation must include: (i) a power of attorney from the board of directors authorizing the notary to submit UBO information; (ii) a statement letter from the board of directors stating the UBO; and (iii) an approval letter from the UBO.

Sanctions and Consequences for Non-Compliance

Sanctions for Non-Compliance to GMS Approval of Annual Report Submission

A joint-capital company that fails to comply with the obligation to submit the notarized GMS approval of its annual report to the MoL, or submits such documentation within the timeframe, may be subject to administrative sanctions. These sanctions may include written warnings and the suspension of the joint-capital companies access to the SABH system. Consequently, such suspension will prevent the company from submitting any amendments to its articles of association or changes to its corporate data through SABH. Access may be restored only after the company submits the required unblocking form and uploads the notarized GMS approval and approved annual report.

Consequences for Non-Compliance to Submit the UBO Documentation

While MoL Reg 49/2025 does not expressly stipulate specific sanctions for failure to submit UBO documentation, such documentation is a mandatory supporting requirement for any SABH filing relating to amendments to the articles of association or changes to corporate data. Accordingly, inaccurate, incomplete, or inconsistent UBO disclosures may effectively prevent subsequent filings, amendments, or approvals from being processed through the SABH system.

Conclusion

With the issuance of MoL Reg 49/2025, the MoL has strengthened corporate governance and compliance oversight for limited liability companies. In this regard, this regulation encourages and ensures that companies fulfill key governance obligations.

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