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Setting Up A Foundation In Indonesia

Yayasan, also known as foundation in Indonesia, is one form of non-profit organization. Learn about the structure of a foundation in Indonesia and how you can build it up with least hassle and most transparency.

What is a Foundation in Indonesia?

Multiple regulations define a foundation in Indonesia, taking Law No 16 of 2001 of Foundations as the basis (amended: Law No. 28 of 2004). It can operate in three main fields:

  • Social

  • Religious

  • Humanity mission


Note that when a foundation decides on setting up its own company, the activities must also relate to the foundation’s statutory purposes. Being established based on the separation of assets, the law defines a foundation as a non-membership legal entity. Meanwhile, foundations may benefit either the organization’s stakeholders or the public.


About Setting Up a Foundation in Indonesia

Foundation is the only type of not-for-profit organization which can be founded by foreigners. According to the Law on Foundations, a foundation can be founded by one or several natural or legal persons.


The stages to follow when setting up a foundation in Indonesia are as follows: As a side note to the above, an important update in the Indonesian legal system came from the Law No. 5 of 2014 on Validation of Foundations, making the process of establishing a foundation simpler. In short, securing and approving the foundation’s name became prompt from there on, as after the regulation was applied, all applicants were being processed electronically through the Legal Entities Administration System. For creating your Deed of Establishment, have it reviewed or translated into Indonesian, please get in touch.

Structure of a Foundation

There must be at least one founder. A foundation in Indonesia with foreign founders must have at least one Indonesian citizen as a board member.


Other than that, the board of your foundation should include at least one of each:

  • Chairman

  • Secretary

  • Treasury

Note that the foreign member of the board should also hold a working permit (IMTA) and temporary stay permit (KITAS). If the member does not have these permits yet, read more about How to process and fill the requirements.


In addition to the above, the foundation must also have at least one of both:

  • Advisor

  • Supervisor

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Paid up capital of a Foundation in Indonesia

As for any starting entity, you need to fit into initial equity requirements. For a foundation in Indonesia, the starting equity depends on the nationality of the founders:

  • Indonesian citizens, minimum IDR 10 million (~$US 748.22515)

  • Foreign citizens, minimum IDR 100 million (~$US 7,486.35815)

Foundation must also keep track of timely reporting. In addition to filing periodic reports to the government or local government, the foundation must also publish them.

Tax Regulations for A Foundation in Indonesia

Non-profit organizations in Indonesia are subject to Income Tax. However, there are exceptions. Income is tax-exempt in case: Foundation uses income to provide scholarship funds Income of a foundation working in the area of education or research and development that is re-invested in its work (according to the timing requirements of the Income Tax law)


Combining Business with Community and Charity in Bali

The number of entrepreneurs who combine local charity and community involvement with doing business in Bali has grown significantly over the past decade. Community involvement brings positive outcomes to the company and, most importantly, the local community in Bali. This article highlights two of VIVO ASIA Bali’s community members, Jeremy and Catherine. Both of them involve charities and communities in Bali as a business method.

Looking for support to buy a new property or manage your existing one in Bali? Get in touch with VIVO ASIA for a free consultation today.

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