Read the Indonesian version: Kematian Pemegang Saham Asing dalam PT PMA: Saham Beralih, Aset Perseroan Tetap Terpisah
24 August 2026 · Corporate & Foreign Investment
Transfer by operation of law, recording of share rights, continuity of company organs, and post-transfer reporting
⚖ Last verified: 24 August 2026 | Sources: Company Law, Articles 16–18 AB, Basic Agrarian Law, Presidential Regulation 13/2018, Minister of Law Regulation 2/2025, Minister of Law Regulation 49/2025, Government Regulation 28/2025, and Minister of Investment and Downstream Industry/Head of BKPM Regulation 5/2025
By Adhit Prasetyo, S.H., CLA, Prasetyo Law Office
When a foreign shareholder dies, the first question the family usually asks is whether the Indonesian company itself passes to the heirs. That question needs to be corrected at the outset, because a PT PMA is an Indonesian legal entity distinct from its shareholders.
As a matter of company law, the asset to be dealt with in the estate is the shares held by the deceased. Land, bank accounts, contracts, licences, machinery, and receivables registered in the name of the Company remain the property of the Company. This separation determines who may act, which documents must be prepared, and which administrative obligations arise following the death.
Initial treatment of the assets most often in dispute
| Asset | Initial treatment |
|---|---|
| Shares held by the deceased in a PT or PT PMA | Form part of the estate under the law identified through a private international law analysis. Rights attaching to the shares may be exercised only after entry in the register of shareholders; where shares are held jointly, the heirs must appoint a single joint representative. |
| Hak Guna Bangunan land, bank accounts, contracts, machinery, and licences registered in the name of the PT | Remain assets of the Company and are not distributed directly to the heirs. |
| Positions on the Board of Directors or Board of Commissioners | Are not inherited. Filling a vacancy follows the Company Law, the articles of association, and any required resolution of the General Meeting of Shareholders. |
| Shareholder loans extended to the PT | May constitute a receivable of the estate where the basis, outstanding balance, and nature of the claim can be evidenced. |
| Declared but unpaid dividends | May constitute a claim of the estate, depending on the dividend distribution resolution and the status of the entitlement as at the date of death. |
| Property owned personally by the deceased | Is analysed separately by reference to the law governing the succession, the type of title, the registered owner, the location of the asset, nationality, and the applicable local agrarian provisions. |
Why it is the shares that transfer, not the Company’s assets
Article 1(1) of Law No. 40 of 2007 on Limited Liability Companies, as last amended by Law No. 6 of 2023, establishes the Company as a legal entity whose capital is divided into shares. Article 3(1) confirms the separation of shareholder liability from the obligations of the Company. Conceptually, a shareholder owns shares, while the Company owns its own assets.
Accordingly, heirs do not directly receive the Hak Guna Bangunan land, account balances, contracts, or machinery belonging to the PT PMA. What enters the estate is the deceased’s shareholding and, where applicable, any personal claim of the deceased against the Company that can be separately evidenced. Rights attaching to shares may be exercised only once the shares are recorded in the name of their owner in the register of shareholders, as provided in Article 52(2) of the Company Law.
Transfer by operation of law does not remove corporate procedure
Article 57(1) of the Company Law permits the articles of association to require a prior offer to other shareholders, approval of a company organ, and/or approval of the competent authority for a transfer of title to shares. Article 57(2), however, disapplies the prior-offer and organ-approval requirements where the transfer occurs by operation of law. In the case of succession, the requirement for approval of the competent authority under Article 57(1)(c) may nonetheless continue to apply.
That exception does not mean the heirs may automatically exercise voting rights. Article 56 continues to govern the deed of transfer of title, delivery of documents to the Company, entry by the Board of Directors, and notification of the change in the composition of shareholders to the Minister. In cross-border matters, the law determining the heirs must be analysed first. Only then are the form and sufficiency of the evidence of inheritance, the recognition of foreign documents, translation, and legalisation or apostille examined before the entry is made.
Where a single share is held jointly by more than one heir, Article 52(5) of the Company Law requires the rights attaching to that share to be exercised through a single joint representative. A dispute as to who the heirs are, or who the joint representative is, may delay the exercise of voting rights and the taking of corporate decisions.
Board positions are not inherited
Where the deceased also held office as a member of the Board of Directors or the Board of Commissioners, that office does not pass to the heirs. Members of the Board of Directors are appointed by the General Meeting of Shareholders under Article 94(1), and any vacancy must be filled in accordance with the Company Law and the articles of association. Inheritance documents evidence entitlement to shares, not appointment as an officer of the Company.
The death of a controlling shareholder may make it harder to achieve quorum, but an application to the court to determine quorum is not the first step. Article 86 requires that a first General Meeting of Shareholders be convened. If quorum is not met, a second meeting may be convened. Only if the second meeting also fails to achieve quorum may the Company apply to the head of the district court of the Company’s domicile to determine the quorum for a third meeting.
The operational impact of a death therefore cannot be generalised. A company may continue to operate where the remaining organs retain authority and the articles of association provide an adequate mechanism. The risk of deadlock increases where the deceased held a decisive vote, was the sole member of the Board of Directors, or where the inheritance documents and the appointment of a joint representative are not yet available.
Recording and notification must be sequenced
The Company Law establishes two distinct administrative sequences. Both must be ordered according to the facts and the documents available.
- Change of shareholders. The Board of Directors records the transfer of title to shares in the register of shareholders and notifies the Minister of the change in the composition of shareholders no later than 30 days from the date of entry. Until that notification is made, the Minister may reject an application relying on the unnotified shareholder composition, under Article 56(3) and (4).
- Change of directors. If the General Meeting of Shareholders appoints a replacement, the change in the membership of the Board of Directors must be notified to the Minister no later than 30 days from the date of the resolution. Article 94(8) governs the consequences of rejecting an application or notification submitted by a director who is not yet recorded.
Article 94(9) exempts from that rejection a notification made by a new director of that director’s own appointment. In addition, Article 1(15) of the Company Law defines a Day as a calendar day. The 30-day periods in Articles 56 and 94 are therefore not 30 business days.
The foreign element: separate succession law from company law
Indonesia has not yet codified private international law in a single statute. The starting points for its conflict-of-laws rules remain dispersed, principally in Articles 16, 17, and 18 of the Algemene Bepalingen van Wetgeving voor Indonesië, or AB. The draft Private International Law Bill, which remains in the legislative process, is not applicable law and is not relied upon in this article.
Article 16 AB is the starting point for personal status on the basis of nationality. Accordingly, where the deceased was a foreign national, the national law of the deceased must be examined to determine who the heirs are, the standing of any will, the respective shares, and the authority of the person representing the estate. That conclusion cannot be drawn directly from Indonesia’s three succession regimes merely because the asset consists of shares in a PT PMA. Characterisation of the issue, last domicile, family relationships, the location and type of assets, and Indonesian public policy must each still be analysed on the facts.
Determining the heirs is the first layer. The second is the corporate consequence in Indonesia. Even where the status of the heirs is determined under foreign law, the recording of the share transfer, the register of shareholders, the exercise of voting rights, notification to the Minister, and the governance of the PT PMA continue to follow the Company Law, the articles of association, and Indonesian investment and sectoral requirements. Article 18 AB is relevant to assessing the form of a legal act by reference to the law of the place where it was performed, while acceptance of foreign documents in Indonesia may also require sworn translation and, depending on the country of origin and the type of document, legalisation or apostille.
Land: distinguish personal property from company property
For immovable property, Article 17 AB points to the law of the country or place where the property is located. As the land in question is situated in Indonesia, Indonesian agrarian provisions apply. Article 21(1) of the Basic Agrarian Law provides that only Indonesian citizens may hold Hak Milik. Under Article 21(3), a foreign national who acquires Hak Milik through intestate succession must relinquish that title within one year of acquisition. If it is not relinquished, the title lapses by operation of law and the land passes to the State, subject to the rights of any third parties encumbering it.
That one-year rule concerns Hak Milik acquired personally by a foreign national. It does not transfer or extinguish a Hak Guna Bangunan registered in the name of a PT PMA, because that title is an asset of an Indonesian legal entity and not part of the shareholder’s estate. The status of the land certificate, the name of the registered titleholder, and any encumbrance must be verified before any action is taken in respect of the land.
Obligations once the transfer is recorded
Once the evidence of inheritance has been accepted, the transfer instrument prepared, and the shares recorded, the following obligations should be mapped separately:
- Register of shareholders. The Board of Directors must maintain and keep a register of shareholders. Voting rights, dividends, and other rights attaching to shares take effect once the shares are recorded in the name of their owner, under Articles 50 and 52 of the Company Law.
- Legal Entity Administration System. A change in the composition of shareholders is notified to the Minister no later than 30 calendar days from the date the transfer of title is recorded, in accordance with the Company Law and the administrative procedure applicable under Minister of Law Regulation No. 49 of 2025.
- Beneficial ownership. Where a share transfer changes beneficial ownership information, that change must be reported within three business days of the change under Article 20(2) of Presidential Regulation No. 13 of 2018. Corporations must also update the information at least annually. Minister of Law Regulation No. 2 of 2025 adds verification, supervision, and administrative sanction mechanisms.
- OSS and sectoral licensing. Where a change in ownership affects business entity data, the composition of foreign capital, or line-of-business requirements, OSS data and sectoral licences must be updated in accordance with Government Regulation No. 28 of 2025, Minister of Investment and Downstream Industry/Head of BKPM Regulation No. 5 of 2025, and the relevant sectoral rules. There is no single OSS deadline that can be assumed to apply to every change and every line of business.
The three-business-day beneficial ownership deadline does not arise automatically whenever a shareholder dies. It becomes relevant only where the death and the subsequent transfer genuinely change the beneficial ownership information required to be reported.
Conclusion
The death of a foreign shareholder does not transfer the assets of a PT PMA to the family. At the corporate level, what must be transferred and recorded is the deceased’s shareholding. Assets registered in the name of the Company remain within the Company’s property.
The order of steps must not be reversed. A private international law analysis determines the law applied to assess the heirs and the inheritance documents. The Company Law then governs the recording of shares and the exercise of rights attaching to them, while a resolution of the General Meeting of Shareholders governs the appointment of replacement officers. Notification to the Ministry, beneficial ownership reporting, OSS, and sectoral licensing are then completed according to their respective triggers and deadlines.
Prasetyo Law Office
Prasetyo Law Office is a Jakarta-based law firm providing integrated legal services to clients across a range of areas, from commercial transactions to cross-sector litigation. With years of experience, we combine command of the applicable regulations with an understanding of industry dynamics and our clients’ business character. We provide comprehensive legal advice and strategic solutions to help clients minimise legal risk across every business challenge.
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Principal sources
- Law No. 40 of 2007 on Limited Liability Companies, as last amended by Law No. 6 of 2023, in particular Articles 1(1) and 1(15), 3, 50, 52, 55 to 57, 86, and 94.
- Algemene Bepalingen van Wetgeving voor Indonesië (Staatsblad 1847 No. 23), in particular Article 16 on personal status, Article 17 on immovable property, and Article 18 on the form of legal acts.
- Law No. 5 of 1960 on Basic Agrarian Principles, in particular Articles 21 and 36.
- Presidential Regulation No. 13 of 2018 on the Implementation of the Principle of Recognising Beneficial Owners of Corporations, and Minister of Law Regulation No. 2 of 2025 on the Verification and Supervision of Corporate Beneficial Owners.
- Minister of Law Regulation No. 49 of 2025; Government Regulation No. 28 of 2025; and Minister of Investment and Downstream Industry/Head of BKPM Regulation No. 5 of 2025.
- Indonesian Civil Code, in particular Book II; Presidential Instruction No. 1 of 1991 on the Dissemination of the Compilation of Islamic Law, in particular Book II; and customary law relevant to the facts of the matter.
- Presidential Regulation No. 2 of 2021 ratifying the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents; Presidential Regulation No. 10 of 2021 on Investment Business Fields, as amended by Presidential Regulation No. 49 of 2021; and sectoral regulations applicable to the Company’s business activities.
Disclaimer: This publication is provided for general information and educational purposes based on laws and materials available as of 24 August 2026. It does not constitute legal advice or a formal legal opinion and should not be used as the sole basis for any particular filing, licensing matter, transaction, or dispute. Indonesian regulations, OSS System functionality, and administrative practices may change. Advice tailored to the facts and verification of current requirements should be obtained before taking action. Receipt or use of this publication does not create a lawyer-client relationship.
