For foreign investors interested to invest in Indonesia for takaful business shall observe certain strict regulations. Foreign shareholding is limited to only 80% at inception however there is an opportunity to increase above the limit should the situation warrant it. For instance, if the company is facing solvency issue under Risk Based Capital (RBC), the foreign shareholders may increase their stake higher than 80% if local shareholders fail to inject additional capital. Nevertheless, the number of shares of local should remain status quo.
Ensure that all article of associations (known as Anggaran Dasar) are properly lodge to Ministry of Law (Hukum dan HAM) and Ministry of Finance for approvals. The process is undertaken by a Notaris and should be guided by a legal advisor. MOL will issue an approval letter known as SK whilst MOF will issue a business license to reflect the latest situation of the company's capital structures.
Unlike Malaysia, there is no Takaful Act adopted in Indonesia. Thus all regulations and laws for takaful operators are prescribed under conventional insurance law. Nevertheless, MOF had initiated some efforts to incorporate few new articles in the law to address the gap in syariah insurance requirements. New accounting guidelines had also been introduced by regulator to tackle the syariah accounting principles in takaful.
