Establishing a Business in Indonesia: Financial Reporting

SSEK Legal Consultants founding partner Ira A. Eddymurthy and partner Denny Rahmansyah have contributed the Indonesia chapter of the new Practical Law global guide to Establishing a Business in ... SSEK is one of the top corporate and commercial law firms in Indonesia. It works with leading international and domestic companies on all aspects of their business in Indonesia. SSEK is widely experienced in the establishment of businesses in Indonesia and their ongoing operation.

The following is an extract from Establishing a Business in Indonesia.

Under the Indonesian Company Law, the board of directors of a limited liability company (Perseroan Terbatas (PT)) must submit an annual report during the General Meeting of Shareholders. This annual report must contain, among other items, the PT's financial report. Publicly listed companies (PT Tbk) must submit a financial report to the Financial Services Authority (Otoritas Jasa Keuangan (OJK)).

And under Minister of Industry and Trade Decree No. 121/MPP/Kep/2/2002 regarding Submission Procedures for a Company's Annual Financial Report, the following must submit audited annual financial statements (Laporan Keuangan Tahunan Perusahaan (LKTP)) to the Minister of Trade:

• Publicly listed companies.
• Companies involved in the collection of/and or management of funds from the public (for example, banks and insurance companies).
• Companies issuing debt instruments.
• Companies with assets of IDR25 billion or more.
• Bank debtors whose financial statements are required for auditing by the bank.

There is no financial reporting obligation for branch/representative offices (that is, KPPA, a representative office of a foreign company that engages in providing business services, or KP3A, the representative office of a foreign company that engages in trading goods). The accounts of KPPA or KP3A must comply with Indonesian law. KPPA and KP3A must submit periodic reports on their activities to the Capital Investment Coordinating Board and a monthly and annual tax return to the local tax office.

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