Client Alert · Corporate Law · Prasetyo Law Office · 2026
Legal Basis
- Law No. 40 of 2007 on Limited Liability Companies (UUPT)
- Article 71 — Final Dividend
- Article 72 — Interim Dividend
Introduction
For foreign investors operating a PT PMA in Indonesia, one of the most practical questions is: how do I legally extract profits from my company? The answer lies in Indonesia’s dividend framework under the UUPT, which recognizes two distinct types: Interim and Final dividends.
A. Interim Dividend — Article 72 UUPT
An interim dividend is the distribution of profits before the fiscal year ends, based on interim (unaudited) financial statements.
Legal Requirements
- Authorized by Articles of Association — must expressly permit interim distributions
- Net assets must not fall below issued capital + mandatory reserves
- Must not impair creditor obligations
- Must not impede business operations
Approval
Approved by Board of Directors — no RUPS required. Board of Commissioners must be notified.
Key risk: If the company suffers a net loss by year-end, interim dividends must be returned by shareholders. Directors who authorize non-compliant distributions may be held personally liable.
B. Final Dividend — Article 71 UUPT
A final dividend is distributed after the fiscal year ends, based on audited net profit approved by RUPS.
Legal Requirements
- RUPS resolution required
- Mandatory reserve allocation — at least 20% of issued and paid-up capital
- Based on audited financial statements
Comparison: Interim vs. Final Dividend
| Aspect | Interim Dividend | Final Dividend |
|---|---|---|
| Legal Basis | Article 72 UUPT | Article 71 UUPT |
| Timing | Before fiscal year end | After fiscal year end |
| Financial Basis | Interim (unaudited) | Audited annual statements |
| Approval | Board of Directors | RUPS (shareholder vote) |
| Articles of Association | Must expressly permit | Standard authority |
| Risk Level | Higher — return obligation if loss | Lower — confirmed audited profit |
Practical Considerations for PT PMA
- Articles of Association review — confirm interim dividends are expressly authorized
- Withholding tax — typically 20% unless reduced by applicable tax treaty
- Repatriation — requires all taxes settled and LKPM current
- RUPS documentation — properly documented and notarized for SABH reporting compliance
Conclusion
Both dividend types are legally available to PT PMA. Final dividends offer greater legal certainty. Interim dividends offer flexibility but carry meaningful risk. In both cases, proper corporate governance and SABH reporting are essential.
This article is for general legal information and educational purposes only.
Prasetyo Law Office
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