The ever-increasing business opportunities in Indonesia have captivated so many foreign investors from around the world to set up a business in Solo, particularly in the form of a foreign company (PT PMA).
Thanks to the adoption of the Online Single Submission System (OSS), Solo has created an investment-friendly environment for local and foreign businesses of all sizes since 2018.
The year when OSS was implemented recorded an astonishing investment value of IDR 30 trillion in Solo. In addition to the implementation of OSS, other benefits that attract foreigners to do business in Solo are its lower import duties, available foreign employment sponsorship, and convenient license and permit acquisition.
However, sometimes a PT PMA may not always be a foreigner’s best option due to its restrictions. Under the Negative Investment List, the Indonesian government limits or prohibits foreign ownership in certain business sectors and activities.
When a business category or industry is partially or entirely close to foreign ownership under the Negative Investment List, foreigners can set up a Special Purpose Vehicle company that provides professional local shareholders, directors and commissioners.
A Special Purpose Vehicle arrangement allows foreign investors to set up a Special Purpose Vehicle company in the form of a local company or PT. This arrangement will be carried out through a stringent and secure loan agreement with the assistance from a professional Special Purpose Vehicle arrangement firm.
Even though the Special Purpose Vehicle company is owned by an Indonesian citizen on the registered documents, they do not have any power or authority over the company. It is the foreign investor who can control and make decisions for the company.
Legal agreements you will have to protect your rights as the real owners are the pledge of share agreement, cooperation agreement, and director appointment letter.
Three common types of Special Purpose Vehicle local counterparts are available in Solo: professional shareholders, professional non-executive directors, and professional commissioners.
1. Professional Shareholders
A professional shareholder will be your company’s registered shareholder. They will appear as the real shareholders on legal business and public documents. Although they are the registered shareholders, they don’t have any authority over the management and control of your company.
2. Professional Non-Executive Directors
This is also a passive role and does not have any control over your company. A professional non-executive director has no permission to be the corporate bank account signatories.
You will need a professional non-executive director at the beginning of your business during the business registration. This is because a foreign director is required to get a KITAS or work permit before they can work in Indonesia. The registered director can be changed in the future.
3. Professional Commissioners
A professional commissioner acts on the behalf of the real commissioners to supervise the activities of the directors and your company.
If you want to establish a local company in Solo instead of a PT PMA, a professional commissioner arrangement can be a great solution.
Also, do keep in mind that the professional commissioner shall be a different individual from the professional non-executive director.
Cekindo offers Special Purpose Vehicle arrangement services for your business in Solo. The names of these Special Purpose Vehicle local partners will appear in your business documents and public records.
Upon appointment of professional shareholders, commissioners or directors, Cekindo will initiate a Special Purpose Agreement or trust declaration. This agreement has to be signed by you (the client) and the Special Purpose Vehicle local partners.
Professional shareholders, directors or commissioners from Cekindo’s Special Purpose Vehicle arrangements can help your business establishment with the highest level of confidentiality and integrity.
Now, you can attain anonymity as the beneficial owner and tap into profitable industries that are only permitted for Indonesian nationals. Fill in the form below to discuss more.