Introduction

This time, we will look at the regulations of the Indonesian Ministry of Justice in relation to the G in ESG.

The Ministry of Law ( MOL ) implemented the Minister of Law Regulation No. 2 of 2025 regarding the Verification and Supervision of the Beneficial Owner of Corporations ( MOL Reg No. 2/2025 ) on February 4, 2025.
This will repeal The Minister of Law and Human Rights Republic Indonesia Regulation No. 21 of 2019 on the Procedures for the Supervision of the Implementation of the Principle of Knowing the Beneficial Owners of Corporations (MOLHR Reg No. 21/2019).
By the way, as an aside, previously there was one ministry called the Ministry of Justice and Human Rights, which had two slightly different roles: legal affairs and human rights, but last year, in 2024, it was decided that this would be neatly split into the Ministry of Justice and the Ministry of Human Rights.

Background to the Enforcement

We believe that the background to the implementation of MOL Reg No. 2/2025 is as follows:
In 2018, the government implemented Presidential Regulation No. 13 of 2018 regarding the application of the Know-Your-Beneficial-Owner Principle by Corporations for the Prevention and Eradication of the Criminal Acts of Money Laundering and Terrorism Financing ( PR No. 13/2018 ).
PR No. 13/2018 essentially introduces the Know Your Beneficial Owner ( KYBO ) principle, making it mandatory for all legal entities in Indonesia to identify their beneficial owners ( BOs ).
By submitting accurate BO information to MOL, you have been implementing the KYBO principle. However, MOL Reg No. 2/2025 differs from previous regulations in the following respects:

Contents of MOL Reg No. 2/2025

Below, we will explain the details of MOL Reg No. 2/2025.

Expanding the scope of application of the KYBO principles

With the coming into force of MOL Reg No. 2/2025, the KYBO principles are now applicable to partnership structures as well.

Previously, the KYBO principles were:
(i) Limited liability company
(ii) Foundation
(iii) Association
(iv) cooperative;
(v) Limited liability partnership
(vi) Previously, the law only applied to unlimited liability partnerships, but its scope has now been broadened.

Implementation of the KYBO Principles

MOL Reg No. 2/2025 sets out specific implementation obligations for the KYBO Principles.

in particular,
(i) Annual updates of information on BO
(ii) Document management of BO
(iii) It consists of electronic responses to a questionnaire regarding the BO.

BO Verification and Risk Assessment

The validation of the BO will be substantive, not formal.
Specifically, this will be carried out by the relevant legal entities, notaries, MOL and other relevant authorities based on a risk assessment regarding money laundering and terrorist financing.

Verification of BO regarding legal entities is
(i) when submitting information regarding its establishment;
(ii) When amending the articles of incorporation
(iii) When changing corporate information or data
(iv) This will be done respectively when specifically updating the BO information.

Additionally, previous rules regarding off-site or on-site assessments based on an entity's risk level are being removed.

BO Questionnaire

Completion of the BO questionnaire is based on specific BO criteria and was previously completed only by the legal entity, but can now also be carried out by the relevant notary public.

Data analysis

MOL Reg No. 2/2025 requires MOL, through the Director-General of the Legal and Administrative Affairs Department, to conduct data processing and analysis of information submitted by legal entities and BO questionnaires based on risk assessment.
The purpose of this requirement is to ensure the accuracy of BO data submitted by legal entities.
The Director-General of the Bureau of Legal and Administrative Affairs will inspect the data relating to the BO to verify its accuracy.
If there are indications that this data does not match the actual situation, an explanation may be sought directly or indirectly from the corporation in question.
Direct explanation can be obtained by summonsing officers and/or conducting on-site inspections of the corporation's premises.
Indirect representations may be made electronically by reviewing documents and/or requesting information.

Administrative sanctions

MOL Reg No. 2/2025 provides that administrative sanctions will be imposed on entities that fail to report BO information or submit inaccurate BO information.
The administrative sanctions are:
(i) Warning
(ii) Blacklisting of a company
(iii) This will be implemented in a phased manner, with the blocking of access to AHU Online.
However, MOL Reg No. 2/2025 also reserves the right for MOL to impose sanctions immediately without a graduated process.

Furthermore, administrative sanctions can be revoked, and can be revoked by the Ministry of Justice by submitting accurate BO information.

summary

This time, we discussed the Ministry of Justice regulations regarding the verification and supervision of BOs in Indonesia.
Other countries are also making efforts to add information regarding beneficial ownership, and Indonesia will follow suit.
This is a must-read for companies doing business in Indonesia or planning to do so.