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Establishment of Foreign Foundation in Indonesia

Foundation is a legal entity of non-profit organization with purposes and objectives in social, religious, and humanitarian. It is prohibited to conduct commercial activities. In which, Foundation carries out its activities by using capital obtained from donation funds; support from other organizations; or self funding by doing its own charity event for its charitable purposes.

To support its purposes and objectives, Foundation may earn profit by establishing and/or involving itself in a business entity. However, its business entity shall separate with the Foundation activities. The Foundation’s share ownership in that business entity is maximum 25% (twenty five percent) of the asset values of the business entity.

Pursuant to Article 9 Paragraph (5) Law No. 16 of 2001 concerning Foundation juncto Article 10 to Article 14 of Chapter 5 of Government Regulation No. 63 of 2008 concerning Implementation of Law No. 16 of 2001 concerning Foundation, we understand that foreigners may conduct participation in Foundation directly or indirectly.

In direct foreign participation which carries out the establishment of a Foundation, whether established by foreigners (individually or legal entity) or establishment in cooperation with Indonesian citizen; the establishment of a representative office is required. However, the establishment of this representative office required a partnership with any local Foundation or Indonesian NGO which has been registered in the Ministry of Home Affairs (Kementerian Dalam Negeri).

Please be informed that the representative office may only carries out social, religious, and humanitarian activities; and it shall has the same purposes and objectives with the partnered Foundation.

Furthermore, indirect foreign participation implemented in the form of financial contribution and support to Local Foundation or Indonesian NGO. However, the fund allocation shall not contradict or violate the prevailing regulations in Indonesia.


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