Jakarta. Indonesia issued rules this week requiring corporations to reveal details of beneficial ownership to the government, as part of efforts to tackle money laundering and terrorism financing in Southeast Asia's largest economy.
This comes at a time when Indonesia is trying to join the Financial Action Task Force (FATF), an inter-governmental body that is fighting money laundering globally. The country was put on an FATF list of jurisdictions with weak measures to combat money laundering and terrorism financing in 2012.
While it was taken off the list in 2015 due to progress in improving regulations, it is yet to become an FATF member.
"Corporations could be used as a means, either directly or indirectly, by a beneficial owner who conducted money laundering and terrorism financing, as long as there is no regulation on it. So it is necessary to regulate the principle of recognising the beneficial owner of a corporation," a copy of the new regulation shows.
All companies, foundations, limited partnerships and other types of corporations must disclose at least one person as their beneficial owner upon registering for business, the regulation, signed by President Joko "Jokowi" Widodo on March 1, stated.
Those already in operation must also reveal such details to authorities within a year.
Tax authorities can also use the data to identify new tax subjects and to audit tax reports, said Yustinus Prastowo, executive director of Center for Indonesia Taxation Analysis.
The ownership data must be updated at least once every year and is open to public upon request.