How to Set Up a Yayasan in Indonesia: Boards, Capital and Approvals
How to set up a yayasan in Indonesia: the three boards and who may sit on them, what foreign founders must contribute, and the steps from deed to NPWP.
- Law No. 16/2001, as amended by Law No. 28/2004 — Foundations
- Government Regulation No. 63/2008, Art. 6 — initial assets
- Law No. 17/2013, Art. 47 — Social Organisations (ORMAS), foreign foundation thresholds
- PMK 68/PMK.03/2020 — treatment of surplus in education and research non-profits
To set up a yayasan is to create a legal entity with no owners. A company such as a PT PMA exists to return profit to its shareholders; a foundation has none, and its surplus stays inside it, applied to the purpose written into its deed. That single difference drives everything below — who may sit on its boards, what the founders must contribute, and which approvals stand between a draft deed and a foundation that legally exists.
Foreign founders can establish one. The conditions are stricter, and they are set out below rather than buried.
Who may sit where
A yayasan has three boards, not one. They are not interchangeable, and the rules on foreign participation differ for each.
| Board of Trustees (Pembina) | Board of Management (Pengurus) | Board of Supervisors (Pengawas) | |
|---|---|---|---|
| What it does | Holds the highest authority. Sets direction and guards the purpose. | Runs the foundation day to day — chair, secretary, treasurer. | Oversees management and checks compliance. |
| Foreign nationals | Permitted | Permitted, with one exception below | Permitted |
| If resident in Indonesia | Limited stay permit (KITAS) required | KITAS and a work permit required | KITAS required |
| Indonesian national required | No | Yes — at least one key role | No |
One person, one board
No individual may serve on more than one of the three boards. It is the rule that most often invalidates a board list already drafted — a founder who intends to chair the trustees and also run operations has to choose.
Can board members be paid?
The trustees and supervisors serve unpaid. Members of the board of management may draw a salary where they work full time for the foundation and are not closely related to other board members.
What the founders must put in
The figure depends on which law you set the foundation up under, and this is where most published guidance goes wrong. Two routes exist and they are not interchangeable.
Under the Foundations Law (Law 16/2001 and Government Regulation 63/2008), an Indonesian founder separates a minimum of IDR 10 million, and a foreign founder — alone or together with an Indonesian — separates IDR 100 million.
The ORMAS route, and why it is narrow
Under the ORMAS Law (Law 17/2013) the numbers are very different. A foundation established as a foreign civil society organisation separates IDR 1 billion where the founder is a foreign national, and IDR 10 billion where the founder is a foreign legal entity.
That route also carries conditions the other does not. The founder is expected to have held a limited stay permit in Indonesia for five years beforehand, or the entity to have been present here for five years. Approval runs through the Ministry of Foreign Affairs as well as the Ministry of Law.
In practice, most foundations with foreign founders are established under the Foundations Law, at IDR 100 million. The ORMAS route is for the narrower case of a foreign organisation setting up its own presence in Indonesia, and its five-year conditions are what make it narrow — a founder who has only just arrived cannot use it.
Do not take a single figure from a single guide
Published guidance from Indonesian firms genuinely disagrees here, and the gap between the answers is a factor of ten. That is not carelessness on anyone’s part — it reflects which route the writer had in mind. Establish which law your foundation is being set up under before you budget for it, because the difference is IDR 100 million against IDR 1 billion.
The separated fund is the foundation’s own property from the moment the deed is signed. It is not a deposit, and it is not returnable to the founders.
Funds may come from donations, grants, endowments or inheritances.
Key point
Foreign donations must be reported to the authorities. This is a standing obligation for the life of the foundation, not a one-off disclosure at registration.
From deed to tax number
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Define the purpose and the activities
The purpose goes into the deed and constrains everything the foundation may later do, so it is worth more time than it usually gets.
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Choose a name beginning "Yayasan"
The name must start with the word, and must not already be taken.
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Draft the Deed of Establishment (Akta Pendirian)
Executed before an Indonesian notary. It carries the purpose, the initial fund and the three boards.
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Obtain a Ministry of Foreign Affairs recommendation
Required where there are foreign founders. Not applicable to a wholly Indonesian foundation.
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Get Ministry of Law approval
The approval that gives the foundation legal existence. Applications run through AHU, the online legal administration system.
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Register for tax, banking and social security
Apply for the tax identification number (NPWP), open the bank account, and register with the social security agency (BPJS) if the foundation will employ staff.
Registration and later changes are filed through the Ministry of Law’s AHU online system, which is also where a foundation’s registered particulars can be checked. Older documents name the Ministry of Law and Human Rights, which was split on 5 November 2024 (Perpres No. 155 of 2024). The tax number the foundation receives is a 16-digit NPWP, in the same format as any company’s.
What it owes once it exists
A yayasan is not outside the tax system, and the exemption most people have heard of is narrower than its reputation.
Under PMK 68/PMK.03/2020 a surplus can be excluded from taxable income, but three conditions all have to hold. The foundation must work in education or research and development; the surplus must be reinvested in facilities and infrastructure for that work; and the reinvestment must happen within four years of the surplus being earned.
A surplus that sits in the bank past that window is taxable. A foundation working in another field does not have this exemption at all.
It still withholds tax on what it pays out. Salaries carry Article 21, services carry Article 23, and payments abroad carry Article 26. VAT applies where a foundation carries on taxable activity, which many do alongside their charitable work.
On top of tax, a foundation reports:
- Annual activity and financial reports, in Bahasa Indonesia.
- Financial disclosure, where the foundation solicits donations from the public.
- Any change to its deed or its governance, to the Ministry of Law — and to MOFA where foreign founders are involved.
The three laws it answers to
Law 16/2001, as amended by 28/2004
The foundations law itself: how a yayasan is formed, how it is governed, and how it is dissolved. It also sets what each of the three boards may and may not do.
Government Regulation 63/2008
The administrative layer — the requirements a foundation meets to register and to stay registered.
Law 17/2013 on social organisations
Known in Indonesia as the ORMAS law. It governs how foundations and other social organisations operate against national governance standards, and it is the one most often overlooked.
Before you set up a yayasan
The structure is not complicated, but it is rigid: the purpose in the deed is hard to change afterwards, the boards cannot overlap, and the foreign founder thresholds are not negotiable. Most of the difficulty is in getting the deed right the first time.
If you would like that handled, our corporate secretarial service covers formation and the reporting that follows.
Note
This article is general guidance and is not a substitute for advice on your own situation. Confirm the current requirements before acting.