New Government Regulation Redefining Authorized Capital of Limited Liability Companies

August 26, 2016

Corporate Commercial


Government of the Republic of Indonesia has enacted Government Regulation No. 29 of 2016 regarding Amendment to Authorized Capital of Limited Liability Companies (“GR 29/2016”), which came into effect on 14 July 2016.

GR 29/2016 is intended to implement Article 32 (3) of Law No. 40 of 2007 regarding Limited Liability Companies (“Company Law”), which states that any amendments to the amount of authorized capital of limited liability companies as provided in Article 32 (1) of the Company Law, i.e., IDR 50 million at the minimum, shall be determined by a government regulation.

GR 29/2016 redefines the minimum amount of authorized capital of limited liability companies, providing a sole right to the founders of companies to freely set their own authorized capital based on their mutual agreements, subject to the minimum capital requirements applicable to certain line of business (e.g., banking, insurance, financing, etc.) or type of the company (e.g. foreign investments company (PMA)).

GR 29/2016 revokes and replaces Government Regulation No. 7 of 2016 (“GR 7/2016”), which regulated the similar matter, as previously elaborated in our client update of April 2016.


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