Regulatory Update: Minister of Law Issues New Regulation on Verification and Supervision of Corporate Beneficial Ownership
As part of the Indonesian government’s efforts to prevent money laundering and terrorism financing (TPPU/TPPT) and to optimize the accuracy of beneficial ownership data, on 4 February 2025, the Minister of Law issued Minister of Law Regulation No. 2 of 2025 on Verification and Supervision of Corporate Beneficial Ownership (“MOL Reg. 2/2025”). This new regulation revokes the previous Minister of Law and Human Rights Regulation No. 21 of 2019 on Procedures for the Supervision of The Know-Your Beneficial Owner Principle in Corporations.
MOL Reg. 2/2025 is also issued to accommodate several challenges, including the need for a centralized beneficial ownership database, the absence of verification requirements for individual limited liability companies, and the low compliance rate in beneficial ownership reporting.
Below are the key changes introduced under MOL Reg. 2/2025.
♦ Expansion of Corporate Entities Subject to Regulation
MOL Reg. 2/2025 broadens the scope of entities required to report beneficial ownership information. This new regulation now includes civil partnerships and provides further clarification on limited liability companies (Perseroan Terbatas or PT) by categorizing them into capital partnership companies (perseroan persekutuan modal) and individual companies (perseroan perorangan).
♦ Verification of Beneficial Ownership
MOL Reg. No. 2/2025 introduces a risk-based verification process. This verification is conducted to assess risks related to money laundering and terrorism financing and must be performed by corporations, notaries, the Minister of Law, and other relevant authorities. The verification process involves assessing the accuracy of beneficial ownership information against supporting documents. The electronic system will subsequently calculate the consistency and accuracy of the submitted data in comparison with the information provided in the beneficial ownership questionnaire completed by the company.
♦ Administrative Sanctions
While the previous regulation did not specifically prescribe sanctions for non-compliance, under Chapter VII of MOL Reg. 2/2025, a structured system of administrative sanctions has been established. These sanctions may be imposed if a corporation fails to report its beneficial ownership information to the Ministry of Law or if the information submitted is found to be inaccurate. The regulation specifies the types of sanctions and the procedures for their imposition, which include:
- Warning letters;
- Blacklisting; and
- Blocking access to the General Law Administration (Administrasi Hukum Umum or AHU) Online system.
This regulatory update reflects the government’s commitment to enhancing transparency in corporate ownership and aligning Indonesia’s legal framework with international best practices in preventing financial crimes.
AKSET
Please contact Inka Kirana (ikirana@aksetlaw.com) or Natasya C. Ferdev (nferdev@aksetlaw.com) for further information.
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