What exactly is the practical practice of assigning stock names (nominated arrangement) in practice? The naming arrangement (credit name) in daily practice is the use of an Indonesian citizen`s name as a shareholder of a PT Indonesia or as one of the companies of a komanditer company. Or in addition, the use of the name as one of the landowners with property or construction law status in Indonesia. The practice of the Nominee agreement therefore concerns not only the use of the name as a shareholder of PT Indonesia, but also the use of the name in the ownership of a property in Indonesia, which is widespread, especially in Bali. Certainly, or not, many countries in Bali are effectively held by foreigners, although when checked at the local regional office, they are registered on behalf of Indonesian citizens. This is due to the principle of a ban on land abandonment (gronds verponding verbood), which is reflected in the country`s legislation in Indonesia; Which prohibits the ownership of real estate with rights other than the right to use, which is held by foreign nationals. Speaking of aspects that affect the validity or absence of an agreement, the specific nominee structure of such participation becomes a prohibited structure, and therefore any such agreement or declaration is contrary to existing legislation. Article 33, paragraph 2, of Law 25/07 provides for sanctions that invalidate the agreement and/or declaration. The party that nominates the candidate is often referred to as a beneficiary party. The nominee represents the interests of the beneficiary and, therefore, the candidate must comply with the agreement when carrying out special actions and, of course, comply with the order of the beneficiary. With the prohibition of practicing the nominic arrangement (loan name), the consequences are that any use of the wni name is considered to be the owner of a property or shares in Indonesia, as a rightful owner.
Indeed, as stated in Section 48, paragraph 1, of Law 40 of 2007, the shares of the company are issued in the name of the owner. Therefore, even if a “counter-document” takes the form of an act of explanation or act of recognition and power which stipulates that the citizen is in fact only “the owner” of the actions concerned and does so on behalf of the ASA, the citizen in question remains, in the eyes of the law, the rightful owner. Indeed, the “counter-document” is declared null and void and not entitled in accordance with Article 33, paragraph 2. The Nominee Agreement is clearly a form of legal smuggling aimed at avoiding the rules that allow foreigners not to be allowed, under Article 9, paragraph 1, jo, as holders of land ownership rights in Indonesia.