Legal Advisory

Legal Risk Consultation for Foreign Investors

Identify and prevent legal risks in your business, investment structure, and contracts in Indonesia — before they become costly disputes.

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Why Legal Risk Review Matters

Prevention Is Cheaper Than Litigation

Many foreign investors and business owners in Indonesia discover legal problems only after they have already caused significant financial loss — a nominee shareholder who takes the company, a contract with no dispute clause, a director who cannot be removed, or a business licence that was never properly obtained.

A Legal Risk Consultation is a proactive legal review of your current business structure, investment arrangement, contracts, and compliance status — identifying vulnerabilities before they are exploited or triggered by a dispute.

Our licensed Indonesian lawyer reviews your situation, explains the specific legal risks you face under Indonesian law, and provides a practical action plan to strengthen your legal position.

⚖️ Lawyer-Supervised Review: Unlike generic business consultants, our legal risk reviews are conducted by a licensed Indonesian advocate (PERADI), giving you a professional legal assessment with full attorney-client confidentiality.

Legal Risk Review Covers

  • Company Structure Ownership, shareholder, director risks
  • Investment Compliance BKPM, OSS, LKPM, sector restrictions
  • Contracts Business, partnership, investor agreements
  • Visa / Residency KITAS validity, overstay risk, sponsor issues
  • Employment Foreign worker permits, employment contracts
  • Business Operations Licence validity, tax compliance, regulatory
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Legal Risk Areas We Review

Our legal risk consultation covers the most critical areas of exposure for foreign investors and business owners operating in Indonesia.

High Priority

Business Structure & Ownership Risk

Your company's ownership and governance structure is the foundation of your investment in Indonesia. Weaknesses here can result in losing control of your company entirely.

We review:

  • Nominee shareholder arrangements and legal exposure
  • Share ownership documentation and transfer restrictions
  • Director and commissioner appointment protections
  • Shareholder agreement completeness and enforceability
  • Articles of Association adequacy for investor protection
  • Voting rights and veto provisions for key decisions
⚠️ Common Finding: Many foreign investors have no shareholder agreement — only an Articles of Association. This leaves critical rights unprotected.
High Priority

Investment Compliance Risk

PT PMA companies face specific compliance obligations with BKPM, OSS, and the Ministry of Investment. Non-compliance can result in fines, licence revocation, and jeopardise your visa status.

We review:

  • LKPM quarterly and annual report compliance status
  • Capital injection adequacy and documentation
  • OSS / NIB registration completeness and accuracy
  • KBLI (business activity code) alignment with actual operations
  • Sector-specific foreign ownership limit compliance
  • Pending BKPM notifications or approval requirements
⚠️ Common Finding: Many PT PMA companies have missed LKPM quarterly reports — often without the foreign owner knowing.
Important

Contract & Agreement Risk

Business contracts, partnership agreements, and investor agreements that lack proper legal protections expose you to unenforceable terms, disputes without resolution mechanisms, and financial loss.

We review:

  • Business partner and vendor contracts
  • Joint venture and partnership agreements
  • Shareholder and investor agreements
  • Employment contracts for foreign and local staff
  • Property lease agreements (office, commercial space)
  • Dispute resolution and governing law clauses
⚠️ Common Finding: Contracts drafted by non-lawyers often lack enforceable dispute resolution clauses under Indonesian law.
Time-Sensitive

Visa & Residency Risk

Immigration violations in Indonesia carry serious consequences including fines, detention, deportation, and re-entry bans. Visa and KITAS status must be actively monitored.

We review:

  • KITAS / KITAP expiry dates and renewal deadlines
  • Sponsor company legal status and KITAS validity link
  • Multiple Re-Entry Permit (MERP) status
  • Investor KITAS alignment with PT PMA shareholder registration
  • Overstay risk and current exposure
  • Any pending immigration issues or violations
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Important

Business Operations & Licence Risk

Operating without the correct business licences or failing to maintain them exposes your company to regulatory action, fines, and operational shutdown by government authorities.

We review:

  • NIB validity and business licence completeness
  • Sector-specific permit renewal status
  • NPWP and tax compliance standing
  • Foreign worker permits (IMTA) and RPTKA validity
  • Domicile and operational address compliance
  • Annual company GMS (RUPS) compliance
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Important

Property & Asset Risk

Foreign nationals cannot own land in Indonesia directly. Property arrangements involving foreign investors require careful legal structuring to ensure assets are legally protected.

We review:

  • Property ownership and title legality
  • Land rights applicable to foreign nationals (HGB, HGU, HP)
  • Nominee property arrangements and legal risk
  • Commercial lease agreement terms and protections
  • Asset ownership through PT PMA structure
  • Property dispute risk and due diligence
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The 5 Biggest Legal Risks for Foreign Investors in Indonesia

These are the most common and most costly legal mistakes we see foreign investors make in Indonesia. Are you exposed to any of them?

01

Nominee Shareholder Arrangement

Using an Indonesian national to hold shares "on your behalf" in a PT or PT PMA is illegal under Indonesian law. The nominee is legally the real owner of those shares. They can sell them, transfer them, or use them to vote you out of your own company — and you have no legal remedy.

This is perhaps the single most common way foreign investors lose their businesses in Indonesia. We conduct full nominee risk assessments and advise on legally compliant alternatives.

🚨 Illegal Practice 💸 High Financial Loss Risk
02

No Shareholder Agreement

The Articles of Association alone does not adequately protect a foreign investor's rights. Without a comprehensive shareholder agreement, your rights to appoint directors, block decisions, receive dividends, and exit the company on your terms may be entirely unprotected.

A shareholder agreement is a separate, private legal contract between the shareholders that governs the critical aspects of company management and investor rights beyond the AoA. It is essential for any foreign investor with an Indonesian business partner or co-investor.

⚠️ Very Common 🔒 Fixable with Legal Action
03

Director Removal Without Protection

Under Indonesian Company Law, a director can be removed from their position by a shareholder resolution. If the majority of shares are held by an Indonesian partner (or nominee) without adequate protective provisions in the AoA or shareholder agreement, a foreign director can be removed at any time — effectively locking them out of their own business.

⚠️ Common in Joint Ventures 💸 Results in Loss of Control
04

Expired KITAS / Immigration Violations

Foreign nationals operating in Indonesia on an expired visa or KITAS face daily fines, possible detention, deportation, and a re-entry ban. In addition, a foreign director of a PT PMA operating without a valid KITAS is in violation of Indonesian immigration law — which may also expose the company to penalties.

🚨 Time-Critical ⛔ Risk of Deportation
05

LKPM Non-Compliance & Capital Injection Failure

Many foreign investors set up a PT PMA and then neglect the quarterly LKPM investment activity reporting and the capital injection requirements. Over time, accumulated non-compliance results in administrative warnings, investment registration suspension, and — in severe cases — cancellation of the company's investment registration, affecting all linked licences and permits.

⚠️ Very Common 📋 Fixable with Legal Action

How Our Legal Risk Consultation Works

A structured, confidential review of your legal exposure — with a clear action plan.

1

Book a Consultation

Contact us via our consultation form or WhatsApp. Briefly describe your business situation, the type of review needed, and any specific concerns you have about your legal position in Indonesia.

2

Document Submission

Share your key legal documents with our lawyer — company deed, shareholder agreement (if any), business licences, contracts, and KITAS/visa documents. All documents are handled with full legal confidentiality.

3

Legal Risk Assessment

Our licensed lawyer conducts a structured review of your documents, identifies legal vulnerabilities, compliance gaps, and areas of immediate concern under Indonesian law.

4

Risk Report & Action Plan

We present our findings in a clear, practical format — explaining each risk, its potential consequences, and the specific legal steps we recommend to mitigate or eliminate it.

5

Legal Remediation

Where risks are identified, we can immediately begin legal remediation — drafting missing agreements, correcting compliance filings, updating company documents, or managing immigration renewals.

6

Ongoing Monitoring

We offer ongoing legal monitoring for clients who want continued protection — tracking compliance deadlines, KITAS renewals, LKPM reports, and contract review as your business evolves.

Who Should Request a Legal Risk Review?

A legal risk consultation is particularly important in the following situations.

You own or co-own a PT PMA in Indonesia and want to verify your legal protection

You are considering investing in an existing Indonesian company

You have an Indonesian business partner and want to review your agreement

You are unsure if your current company structure has a nominee arrangement

Your business is operating but you have never had a full legal compliance review

You have a contract you would like reviewed before signing or renewing

Your KITAS, KITAP, or business licence is approaching its expiry date

You are experiencing a dispute with a business partner, director, or employee

Related Legal Services

Contract Drafting & Review

Fix vulnerable contracts and agreements — shareholder agreements, business contracts, MoUs.

Business Legal Support

Ongoing legal advisory, compliance monitoring, and corporate governance for your PT PMA.

Foreign Investment Law

Understand ownership limits, sector restrictions, and compliance obligations in Indonesia.

Is Your Investment Legally Protected?

Book a legal risk consultation with our licensed Indonesian lawyer. We review your company structure, contracts, compliance status, and visa situation — and provide a clear action plan to protect your investment.

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