Corporate fraud in Indonesia is more common than most foreign investors plan for. A JV partner diverts funds through a related-party supplier. A “nominee” director sells company assets without board approval. An operational manager runs a parallel invoicing scheme for years before anyone notices.
The discovery moment is rarely clean. The first decisions made in the hours and days that follow determine how much is recoverable.
Indonesian law provides practical remedies, but the availability and speed of those remedies depend on the evidence, the asset profile, and the forum selected. Civil courts can grant provisional asset seizure and award compensation, while criminal investigators may seize assets where criminal elements are sufficiently supported. International cooperation through mutual legal assistance can assist with offshore tracing, but it should usually be pursued alongside local civil or criminal steps.
Key takeaways
- Corporate fraud against foreign investors in Indonesia most commonly arises in JV structures and counterparty relationships, including through related-party misappropriation, false invoicing, asset diversion, and nominee abuse.
- Indonesian law provides both civil and criminal remedies. They can and should be pursued in parallel where the facts support it.
- Preserve evidence before confronting anyone. That single step has the most impact on what is ultimately recoverable.
- Sita jaminan (provisional asset seizure) is the primary domestic tool for freezing assets before judgment. Speed matters. Assets move quickly once a perpetrator knows proceedings are imminent.
- Asset tracing must begin at the same time as legal strategy. Indonesian corporate registries, land registries (BPN), and banking records are the primary domestic sources.
- For offshore assets, PPATK (Indonesia’s Financial Intelligence Unit) is the key coordination point. Indonesia has MLATs with multiple jurisdictions. Parallel civil freezing orders in offshore jurisdictions often move faster.
- According to Transparency International’s 2024 Corruption Perceptions Index, Indonesia ranked 99th of 180 countries with a score of 37 out of 100.
- Director and shareholder liability under Company Law No. 40 of 2007 can extend personal exposure beyond the corporate entity where fraud is deliberate. Under the new Criminal Code (Law No. 1 of 2023), corporations themselves are now expressly recognised as subjects of criminal law, and corporate criminal liability applies as a general principle across all offenses.
How corporate fraud surfaces in Indonesian business contexts
Most corporate fraud in Indonesia does not announce itself. It emerges gradually. A supplier relationship that seems slightly overpriced. Financial reports that are consistently a few weeks late. A counterparty who controls information more tightly than the governance documents require.
The Indonesian legal framework for corporate fraud
Indonesia does not regulate corporate fraud under a single statute. In practice, five legal frameworks are commonly relevant: the Criminal Code (Law No. 1 of 2023, effective 2 January 2026) which replaces the colonial-era Wetboek van Strafrecht and covers fraud, embezzlement, and related misconduct while introducing express corporate criminal liability; Company Law No. 40 of 2007 on directors’ duties, commissioners’ duties, and shareholder remedies; anti-corruption statutes where public officials, state finances, or state-owned entities are involved; Law No. 8 of 2010 on Anti-Money Laundering where suspected proceeds have been moved through the financial system; and the new Criminal Procedure Code (Law No. 20 of 2025) which introduces deferred prosecution agreements and plea bargaining for corporate defendants.
Most corporate fraud claims are filed in the District Court that can run parallel to a criminal report. The Commercial Court is typically relevant only where the dispute intersects with PKPU, bankruptcy, or another statutory commercial matter within its jurisdiction.
Common fraud patterns
The most common patterns frequently seen in cross-border transactions with Indonesian parties fall into five categories.
The most common form of cross-border fraud in relation to Indonesian transactions is ‘related-party misappropriation’. This type of fraud involves a local partner or management of a foreign invested company channeling company funds through affiliated companies on unfavorable terms and conditions. This type of fraud is often seen in JV transactions where the foreign investor relies on the local partner’s financial information and has no independent audit function in place.
In many cases, false invoicing is also involved. Such types of fraudulent activities include fictitious supplier invoices, procurement kickbacks and other schemes involving so-called ‘ghost vendors’. PPATK reports a year-on-year increase in suspicious transaction reports (STRs) relating to potential fraud since 2020. As with most types of business fraud, the schemes are becoming increasingly complex.
Nominee abuse is a particularly widespread form of fraud in Indonesia. It occurs where a nominee acts outside the scope of their mandate, transferring assets, entering contracts, or diverting funds for their own benefit or that of related parties. The foreign investor, who appointed the nominee to hold shares or manage operations on their behalf, suffers the loss. As Indonesia’s foreign ownership rules have been liberalised since 2021, many nominee arrangements are being unwound. Where the nominee has acted fraudulently during the period they were in control, the foreign investor’s recourse lies in civil proceedings and, where criminal elements are present, a report to Bareskrim.
The Positive Investment List released in 2021 significantly liberalised foreign ownership rules. It opened most sectors to 100% foreign ownership and reduced the commercial rationale for nominee structures going forward.
Asset and information-based fraud
Beyond fund-based fraud, there are also instances of asset diversion. This form of fraud involves operating assets, customer information, technology, or intellectual property being transferred to a competing entity. Given the intangible nature of core value in many technology and digital infrastructure investments, this type of fraud can be extremely costly and have very serious consequences.
Finally, financial statement fraud including inflation of reported revenues, concealment of liabilities, and misrepresentation of asset values as of the time a business failed or when an external audit is conducted. Financial transparency and disclosure have long been a major concern of foreign investors to Indonesia according to the World Bank’s enterprise surveys.
From a practitioner’s perspective, the first question is not which claim to file. It is whether the investor still controls the evidence and knows where the recoverable assets are. Filing too early, before those two issues are clear, can alert the wrong people and reduce the prospect of recovery.
The first 72 hours: what to do when fraud is suspected
The first 72 hours after fraud is discovered or suspected are the most consequential. Evidence can be destroyed, assets moved, and suspects alerted within that window. The decisions made in those hours shape everything that follows: whether assets are recoverable, whether evidence is admissible, and whether the investor retains the initiative or loses it permanently.
Preserve evidence before anything else
Do not confront the suspected party before preserving evidence. If local Indonesian management may be involved, do not rely on ordinary internal reporting lines. Place an immediate legal hold on all relevant communications (emails, messaging applications, internal systems), financial records, contracts, devices, and system data. Secure original paper documents where possible: documentary evidence remains central in Indonesian court proceedings, and under the new Criminal Procedure Code (Law No. 20 of 2025), digital evidence must meet specific authenticity requirements to be admissible. If evidence is destroyed or altered after discovery, it is unlikely to be recoverable. The legal hold should be coordinated by external counsel, not by anyone within the potentially compromised entity.
Engage counsel and forensic accountants simultaneously
Indonesian dispute resolution counsel and a forensic accounting firm should be engaged and instructed simultaneously. Asset tracing and legal strategy must be developed in parallel from the outset. Each day that passes without this dual-track approach increases the risk that assets are moved, documentation is destroyed, or the suspected party adopts a defensive posture. Where criminal reporting is contemplated, the forensic report will form the evidentiary backbone of the police report to Bareskrim. It should be structured with that end in mind from day one.
Do not rely on internal Indonesian management
Where internal management is suspected of involvement, do not use normal reporting lines. Assume that any communication through ordinary channels will reach the suspected party. Set up a direct, secure communication line with your Indonesian dispute resolution counsel. Run the investigation from outside the affected entity, using external resources for document collection, system access, and financial analysis. This is not optional. Premature internal disclosure is the single most common mistake in corporate fraud investigations, and the one that most consistently destroys recovery prospects.
Map the assets before filing anything
Before filing any claim, determine which assets exist and where they are. The asset map should cover corporate registry records (Ministry of Law and Human Rights), land registry records (BPN), vehicle registrations, bank accounts (accessible through court order or criminal investigation), and any known offshore holdings. Filing a civil claim without knowing the asset position is a common and expensive mistake: it alerts the defendant without providing a clear target for enforcement, and assets that are not frozen at the outset are frequently dissipated before judgment.
Fraud response sequence: From discovery to recovery
Step 1: Preserve evidence immediately
Before confronting anyone, secure documentary evidence. Legal hold on emails, financials, and systems. Do not tip off the suspected party.
Step 2: Engage external counsel and forensic accountants simultaneously
Instruct Indonesian dispute resolution counsel and a forensic accounting firm at the same time. Asset tracing and legal strategy must run in parallel from day one.
Step 3: Map the assets
Identify what assets exist and where. Indonesian corporate registry (Ministry of Law), land registry (BPN), and banking records via court order are the primary domestic sources.
Step 4: Select the legal pathway
Civil lawsuit, criminal report (Bareskrim or KPK), arbitration, or parallel routes. The decision depends on evidence, asset profile, and commercial objective.
Step 5: Apply for asset freeze
File for sita jaminan through the court, or engage the criminal route for police seizure. Speed is critical. Every day increases dissipation risk.
Step 6: Pursue primary proceedings
Advance the civil claim, criminal report, or arbitration to secure judgment, award, or restitution order.
Step 7: Enforce and recover Execute against identified assets through court enforcement. For offshore assets, engage MLAT procedures through PPATK and consider parallel civil freezing orders in the offshore jurisdiction.
Civil remedies for corporate fraud in Indonesia
Civil proceedings provide the primary recovery framework for corporate fraud in Indonesia. When used correctly, they can freeze assets, force disclosure, and secure damages.
Breach of contract and tort claims
For contractual fraud (i.e. alleged by a party to a JV agreement, a shareholder agreement, a service contract, etc.), civil action would be based on a claim of breach of contract. As well as a claim in breach of contract, the Indonesian Civil Code also permits action to be brought as a matter of tort where such has caused loss. Such claims would typically be filed in the District Court. The Commercial Court would deal with such claims of fraud that also involve aspects of insolvency or other specific commercial matters under relevant statutes.
Shareholder derivative actions
Under Company Law No. 40 of 2007, shareholders holding at least 10% of the issued share capital may bring a derivative action on behalf of the company against directors who have caused loss to the company (Article 97(6)). The same right applies against commissioners who have failed in their supervisory duties (Article 114(6)). Directors are personally liable where losses result from bad faith, conflict of interest, or negligence under Article 97(3), and the business judgment rule does not protect conduct that is fraudulent or outside the director’s authority. This is one of the most underused remedies available to minority foreign investors. It can be particularly effective where management fraud has damaged the company’s value without the perpetrator having committed a clearly criminal act.
Sita jaminan: provisional asset seizure
Sita jaminan is an order granted by a court to preserve specified assets before or during civil proceedings where the applicant can show that the assets exist and are at risk of dissipation. Timing varies by court, the quality of the supporting evidence, and the assets targeted. Prior asset mapping is therefore critical to making the application credible and enforceable.
Civil judgment enforcement
The enforcement of a civil judgment in Indonesia is done by the court bailiff in relation to assets that have been clearly identified. In cases where assets have been concealed, enforcement can take a long time. Therefore, the granting of a sita jaminan prior to a judgment being given is critical in order to try and ensure that a successful claim results in actual recovery. Foreign judgments are not recognized and enforceable in Indonesia under civil law. A new claim must be filed in the Indonesian courts.
Criminal reporting: when and how
Criminal proceedings are not a substitute for civil actions. Rather, they are an alternative that can be pursued in parallel. It is often faster and can put more pressure on the people involved and can even result in the confiscation of assets and the restitution of losses to victims that cannot be obtained through civil actions.
When criminal elements are present
Under the Criminal Code (Law No. 1 of 2023), criminal offenses covering embezzlement, fraud, and abuse of trust remain substantively applicable. A significant development is that corporations are now expressly recognised as subjects of criminal law under Articles 45 to 50 of the new code, meaning that criminal liability can attach to the corporate entity itself, not only to individual perpetrators. In addition, since proceeds of crime can be easily “laundered” through the financial system, Indonesia also has robust anti-money laundering legislation in place (Law No. 8 of 2010 on Anti-Money Laundering). If a public official or state-owned enterprise is involved in any fraud, then anti-corruption legislation would apply.
Filing with Bareskrim
Criminal reports concerning joint venture fraud and other corporate frauds targeting foreign investors should be filed with Bareskrim, the Criminal Investigation Division of the National Police. Indonesian criminal counsel must prepare and support a credible report, which includes a clear description of the alleged criminal conduct, the alleged perpetrator(s), and supporting evidence. The quality of the report will affect the speed with which the report is investigated as well as the seriousness with which it is treated by law enforcement.
KPK involvement
Where fraud involves corruption (payments to public officials, procurement manipulation in government-linked projects, or misconduct by officials in state-owned enterprises), the Corruption Eradication Commission (KPK) has concurrent jurisdiction. According to KPK’s 2023 annual report, the Commission handled 579 cases and recovered Rp525 billion in state losses. KPK investigations typically move with greater resources and public visibility than police investigations.
Restitution orders and asset forfeiture
If an individual is found guilty of a crime, they can be required to return any losses that the victim has incurred. In addition, the individual’s assets can be confiscated under criminal asset forfeiture, including those held by third parties and even held outside of Indonesia.
Corporate criminal liability under the new Criminal Code
A major development under the Criminal Code (Law No. 1 of 2023, effective 2 January 2026) is the express recognition of corporations as subjects of criminal law. Under the previous code, corporate criminal liability arose only where specific sectoral legislation extended liability to corporations. The new code makes corporate criminal liability a general principle applicable to all offenses.
Under Articles 45 to 50, a corporation may be held criminally liable where an offense: falls within the scope of its business activities; unlawfully benefits the corporation; is accepted as corporate policy; results from the corporation’s failure to take adequate preventive measures; or is knowingly permitted by the corporation. Liability may be imposed on the corporation itself, its functionally positioned managers, order-givers, controllers, and beneficial owners, individually or jointly.
Sanctions against corporations include criminal fines (ranging from IDR 200 million to IDR 50 billion, with courts empowered to increase the fine to up to 10% of annual profit under Law No. 1 of 2026 on Harmonisation of Criminal Sanction), as well as additional penalties such as compensation, revocation of permits, closure of business premises, and dissolution of the corporation.
Deferred prosecution agreements
The new Criminal Procedure Code (Law No. 20 of 2025) introduces court-approved deferred prosecution agreements (DPAs) as an alternative mechanism for resolving corporate criminal matters. A corporation may apply for a DPA before the case is transferred to court. If approved, prosecution is suspended for an agreed period during which the corporation must implement remediation and compliance commitments. If fulfilled, prosecution is permanently discontinued. For foreign investors, the DPA mechanism creates a potential pathway to resolve criminal exposure without a full trial, subject to implementing effective compliance measures and cooperation.
Successor liability
The new framework also recognises that corporate criminal liability survives mergers, consolidations, demergers, and dissolutions. This has material implications for M&A transactions involving Indonesian entities: criminal exposure does not disappear upon a corporate restructuring. Foreign investors acquiring Indonesian companies should now assess potential criminal liability, including successor liability, as part of legal due diligence.
Asset tracking and recovery in Indonesia
The work of recovering assets of corporate fraud is a dual track: First we look for tracing of assets in Indonesia. Secondly, we work on international cooperation in case funds have been transferred to abroad.
Domestic asset tracing
Indonesian asset tracing generally starts from the tracing within the corporate structure and then follow the flow of funds. In tracing within the corporate structure, a start can be made with the corporate registry of the Ministry of Law and Human Rights. Other relevant traces of assets can be found with the National Land Agency (BPN) (land registry) and the various vehicle registration offices (Samsat). Banking information can be obtained by way of a court decision or as part of a criminal investigation. In order to be able to start tracing, a reconstruction must be made of the flow of transactions in order to determine where the assets are currently located. This is performed by a forensic accountant in cooperation with legal counsel.
PPATK (Financial Intelligence Unit)
PPATK, established under Law No. 8 of 2010 on Anti-Money Laundering, is Indonesia’s Financial Intelligence Unit. It has the authority to request transaction records from financial institutions and to share intelligence with foreign jurisdictions through the Egmont Group framework. Engaging PPATK through a formal criminal investigation channel can significantly accelerate domestic banking asset tracing.
Cross-border asset recovery
Where fraud proceeds have been moved to Singapore, Hong Kong, the British Virgin Islands, or other offshore jurisdictions, recovery requires mutual legal assistance treaty (MLAT) cooperation. Indonesia has MLATs with multiple jurisdictions. The government-to-government MLAT process typically takes six to twenty-four months.
Do not wait for MLAT alone. In parallel, a civil freezing order in the offshore jurisdiction such as a Mareva injunction in Singapore can be applied for urgently and often moves faster. The two routes reinforce each other.
Asset recovery mechanisms at a glance
| Mechanism | Legal basis | How it works | Timeline | Practical note |
|---|---|---|---|---|
| Sita jaminan | Indonesian Civil Procedure Law | Court freezes specific assets before or during proceedings on showing dissipation risk | Days to weeks | Strongest domestic freeze tool. Asset mapping before filing is essential. |
| Criminal asset seizure | Criminal Code (Law No. 1/2023); Criminal Procedure Code (Law No. 20/2025) | Police or KPK seize assets linked to criminal conduct at investigation stage | On investigation commencement | Faster than civil route where criminal elements are clear. |
| Civil judgment enforcement | Indonesian Civil Procedure Law | Court bailiff executes against assets post-judgment | Post-judgment | Pre-judgment asset mapping significantly improves recovery rates. |
| MLAT cooperation | Bilateral and multilateral treaties | Indonesian authorities cooperate with foreign jurisdictions to trace and freeze offshore assets | 6-24 months | PPATK is the key domestic coordination point. Indonesia has MLATs with multiple jurisdictions. |
| Arbitration award enforcement | New York Convention; Law No. 30/1999 | Award enforced via exequatur through Central Jakarta District Court | 3-12 months post-award | Enforcement of foreign judgments in Indonesia is not direct – a new claim must be filed. |
| PPATK financial intelligence | Law No. 8/2010 on Anti-Money Laundering | Financial Intelligence Unit traces suspicious transactions through banking system | Weeks to months | Formal reporting channel required. Most effective for tracing fund flows. |
Choosing between civil and criminal routes
Most experienced fraud counsel pursue civil and criminal routes simultaneously. Each creates pressure the other cannot. The criminal route can freeze assets faster and creates reputational pressure on the perpetrator. The civil route provides a cleaner framework for financial recovery.
Civil vs criminal remedies: a comparison
| Factor | Civil lawsuit | Criminal report (Bareskrim) | KPK | Arbitration |
|---|---|---|---|---|
| Legal basis | Civil Code; Company Law No. 40/2007 | Criminal Code (Law No. 1/2023); AML Law No. 8/2010 | KPK Law No. 30/2002; anti-corruption statutes | Arbitration Law No. 30/1999 |
| Forum | District Court or Commercial Court* | National Police (Bareskrim) | Corruption Eradication Commission | SIAC, BANI, or agreed institution |
| Outcome | Damages, asset recovery, injunction | Criminal sanction; restitution order possible | Criminal sanction; asset forfeiture | Monetary award enforced via court |
| Timeline | 1-3 years (first instance) | 2-5 years (unpredictable) | 2-5 years | 6-18 months (typical) |
| Asset freeze | Sita jaminan (provisional seizure) | Police seizure order | KPK asset freeze | Interim measures from tribunal |
| Best for | Contractual fraud; financial recovery | Clear criminal elements; embezzlement | State-linked corruption; public officials | Disputes with arbitration clause |
Director and shareholder liability for corporate fraud
Even in cases of corporate fraud that are perpetrated entirely through a corporation, there are often situations in which individual directors or even commissioners have personally directed, authorized or even participated in the criminal act, giving rise to their own individual liability under Indonesian law.
Director liability
Under Article 97 of Company Law No. 40 of 2007, directors are personally liable for losses caused to the company where those losses result from bad faith, conflict of interest, or negligence. The business judgment rule protection does not apply where a director has acted fraudulently or outside their authority.
Commissioner liability
Commissioners who have been derelict in their supervisory duties, having failed to detect or prevent fraud that a properly functioning board should have identified, can face personal liability under Article 114 of the same law. For foreign investors who have appointed commissioners, this creates both a governance obligation and an accountability mechanism.
Nominee director risk
Where a nominee director has conducted the fraud in the name of the other director, consideration must be given to the extent to which the nominee director arrangement was properly documented and to the extent to which the actions of the nominee director were authorized or ratified. An informal or undocumented nominee director arrangement will be difficult to pursue for recovery of losses.
Piercing the corporate veil
In some instances, Indonesian courts have ‘pierced the corporate veil’ and sought to recover from the personal assets of individuals who utilized a company as a vehicle to commit fraud. However, a high threshold must be met and there must be clear evidence of deliberate misuse of the corporate entity, for example a company with no real commercial activities being utilized to channel fraudulent payments to another party. Such relief is rare and evidence of such will be crucial in attempts to recover from personal assets of individuals in the event of fraud.
What to have in place before fraud happens
The greatest governance protections of an Indonesian investment before problems arise, are the safeguards that enable that company to deal with and solve problems quickly and effectively when they do surface. The greatest of these protections are generally contractual and structural in nature.
Contractual protections
JV agreements should include independent audit rights, CFO nomination or approval rights by the foreign investor, and specific approval thresholds for related-party transactions. Information rights that cannot be suspended by the local partner and pre-agreed self-help remedies for specific default events should also be specified. Reflect these in the Anggaran Dasar to give them corporate effect.
Financial controls and early warning signals
Segregation of duties in financial functions, independent audits on a regular basis conducted by an audit firm that is not related to the local partner, monthly management reports compared against the investment’s budget with variance analysis, control over bank accounts that require dual signatures for disbursements above a certain threshold. These are the most practical measures to prevent fraud and to detect it as early as possible before it causes greater losses.
Compliance frameworks
An anti-corruption policy, a system for whistle-blowing, and a due-diligence policy for third parties can serve as effective preventative measures and furnish strong evidence should corruption occur. Critically, under Article 48(d) of the new Criminal Code (Law No. 1 of 2023), a corporation that demonstrates it had implemented adequate preventive measures, compliance training, and monitoring systems may invoke this as a statutory defence against corporate criminal liability. A company with a sound compliance program is therefore in a significantly stronger position than one without, both as a matter of prevention and as a defence when under investigation.
What boards and GCs should ask when corporate fraud in Indonesia is suspected
When corporate fraud in Indonesia is suspected, the following four questions define the boundary between a controlled response and an expensive, disorganised one:
- Has evidence been preserved before anyone internal is informed? The most common mistake is internal escalation before securing the documentary record. Where management is involved, internal escalation tips off the perpetrator.
- Have external counsel and forensic accountants been instructed simultaneously? Legal strategy and asset tracing cannot run sequentially. Every day of delay in starting the forensic work reduces what is recoverable.
- Where are the assets and are they at risk of dissipation? This determines whether sita jaminan is viable and urgent. If the perpetrator knows proceedings are imminent, dissipation accelerates.
- What is the commercial objective? Recovery of financial loss, exit from the JV, removal of the fraudulent party, or a combination. The objective should drive the legal strategy, not the other way around.
Partner perspective
Afriyan Rachmad, Partner, Dispute Resolution
In Indonesian JV fraud matters, the pattern I see most often is not a single dramatic act, but a gradual loss of control over information: related-party vendors, delayed financial reporting, and local management making decisions faster than the foreign investor can verify them. Recovery usually turns on two things: whether the investor preserves the evidence before alerting the suspected party, and whether the legal team maps assets before choosing the forum. The strongest cases are those where civil action, criminal reporting, forensic accounting, and commercial negotiation are treated as one coordinated strategy rather than separate workstreams. The 2026 criminal law reforms have added a new dimension. Indonesia’s first court-approved deferred prosecution agreement, granted in May 2026 at PN Serang, signals that prosecutors and courts are prepared to use the new procedural tools. For corporations facing criminal exposure from fraud, the availability of a DPA means that early cooperation, remediation, and a credible compliance programme are no longer just good governance — they are now a recognised path to resolving criminal liability without a full trial.
Frequently asked questions
Preserve evidence immediately, before confronting anyone. Instruct Indonesian dispute resolution counsel and a forensic accounting firm at the same time. Map available assets before commencing proceedings. The first 72 hours are the most critical period for both evidence preservation and asset protection.
Yes. Sita jaminan (provisional asset seizure) can be applied for from the Indonesian court before or during proceedings. The applicant must demonstrate that specific assets exist and are at risk of dissipation. Courts often grant sita jaminan within days to weeks when the application is well-supported. The quality of prior asset mapping directly determines the outcome.
A civil lawsuit seeks financial compensation and asset recovery through the courts. A criminal report to Bareskrim or the KPK seeks criminal sanctions, asset seizure, and restitution orders. Both can be pursued simultaneously. The criminal route typically creates faster pressure on the perpetrator; the civil route provides a cleaner financial recovery framework.
Domestic civil proceedings typically take one to three years at first instance. Sita jaminan can be granted in days to weeks. Criminal investigations are less predictable and can take two to five years. Cross-border asset recovery through MLAT cooperation typically takes six to twenty-four months. The timeline depends on the jurisdiction and the complexity of the asset trail.
Yes. Indonesia cooperates with foreign jurisdictions through mutual legal assistance treaties (MLATs). PPATK is Indonesia’s coordination point for cross-border financial intelligence. Do not wait for MLAT alone. In parallel, apply urgently for a civil freezing order in the offshore jurisdiction (such as a Mareva injunction in Singapore). The two routes work best together.
Under Article 97 of Company Law No. 40 of 2007, directors who cause loss through bad faith, conflict of interest, or negligence are personally liable. The business judgment rule does not protect directors who have acted fraudulently or outside their authority. Commissioner liability for supervisory failure is addressed under Article 114 of the same law.
Indonesian anti-corruption statutes apply to conduct involving public officials and state-related entities. Foreign companies operating through JVs, state-linked contractors, or regulated industries face exposure. Companies with compliance frameworks, such as anti-corruption policies, third-party due diligence, and whistleblower mechanisms, are in a significantly stronger position in any regulatory investigation.
No. Not directly. Indonesia does not recognise or enforce foreign civil court judgments. A new claim must be filed in Indonesian courts. Foreign arbitral awards are enforceable through the exequatur process at the Central Jakarta District Court, in accordance with the New York Convention. Where fraud proceeds are subject to a foreign arbitral award, this separate recognition step is required before enforcement in Indonesia.
How NDP advises on corporate fraud and asset recovery in Indonesia
Nusantara DFDL Partnership advises multinational corporations, financial institutions, and Indonesian companies on the full lifecycle of corporate fraud disputes in Indonesia, from early-stage risk assessment and internal investigation through civil litigation, criminal reporting strategy, asset tracing, and cross-border enforcement.
NDP’s dispute resolution practice combines local procedural expertise with regional coordination across the DFDL network. Afriyan Rachmad leads the practice, advising on commercial litigation, international arbitration, and cross-border disputes across digital infrastructure, financial services, energy, manufacturing, and corporate sectors.
For further information on NDP’s dispute resolution and fraud advisory practice, visit the NDP Dispute Resolution page.
Readers may also find the following NDP articles relevant:
- Enforcing foreign arbitral awards in Indonesia,
- Distressed M&A in Indonesia: risks, structures, and what goes wrong,
- Financial distress and foreign investors in Indonesia, and
- Commercial contracts and when they fail in Indonesia.
| About Nusantara DFDL Partnership Nusantara DFDL Partnership (NDP) is an Indonesian law firm and a member of the DFDL network, which operates across Southeast Asia. NDP advises foreign corporations, institutional investors, and Indonesian businesses across a full suite of corporate legal services, including corporate advisory, mergers and acquisitions, foreign direct investment, joint ventures, employment law, real estate, dispute resolution, restructuring, and cross-border transactions. NDP works with clients across sectors including digital infrastructure, financial services, energy, manufacturing, and property. Legal note This article is for general informational purposes only and does not constitute legal advice. Laws and market conditions change. Readers should seek independent legal counsel before acting on any information contained here. |
