Ship Finance in Indonesia: Registration of Vessels

SSEK Indonesian Legal Consultants founding partner Dyah Soewito, senior foreign legal advisor Michael D. Twomey and Stephen Igor Warokka, an associate at the firm, have contributed the Indonesia chapter of the new Getting the Deal Through global guide to Ship Finance.

SSEK Legal Consultants has one of the leading shipping practices in Indonesia. SSEK advises multinational and joint venture shipping and offshore drilling companies on all aspects of their operations in Indonesia, including advising on the establishment of joint venture companies, the opening of representative offices and the acquisition and sale of vessels. SSEK is ranked as a tier-one shipping firm by The Legal 500 and is highly recommended for its shipping practice by Asialaw.

The following is an excerpt from the Indonesia chapter of the Getting the Deal Through global guide to Ship Finance written by SSEK Legal Consultants.

What vessels are eligible for registration under the flag of your country? Are offshore drilling rigs or mobile offshore drilling units considered vessels under the laws of your jurisdiction? What is the effect of registration?

Any vessel of at least 7 gross tonnes can be registered under the Indonesian flag. Offshore drilling rigs and mobile offshore drilling units are considered vessels under Indonesian law. Registration results in the vessel obtain√Ç­ing Indonesian nationality, requiring the vessel owner to comply with Indonesian laws and regulations related to the ownership and operation of the vessel.

Who may register a vessel in your jurisdiction?

An Indonesian individual, a wholly Indonesian-owned company or a joint venture company (PMA Company) the majority of whose shares (at least 51 percent) are owned by Indonesian individuals or wholly Indonesian-owned companies (or both) can register a vessel in Indonesia.

However, for a PMA Company with foreign ownership engaged in the ship­ping business to register vessels in its name, it must own at least one ves√Ç­sel of at least 5,000 gross tonnes. For companies that have an Indonesian publicly listed company as a shareholder, the current policy of the DGST is that such public company may be deemed a wholly Indonesian-owned company if at least 51 percent of its shareholders are Indonesian citizens or wholly owned companies as stated in its AOA, but this depends on the policy of the DGST at any given time.

Is there an alternate registry for international shipping operations?

No, there is no such alternate registry in Indonesia.

This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user\'s own risk. You should contact a lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.