Business income received personally by either spouse during marriage can form part of joint marital property (harta bersama) in Indonesia, even when the business or company shares belong to only one spouse. This can apply whether the business owner is the Indonesian spouse or the foreign spouse.
The key distinction is between profits that remain within a company and income that has been paid or distributed to a spouse. For mixed-nationality couples, a marital-property interest in that income does not automatically give the other spouse ownership or control of the company itself.
Retained Profits, Dividends, and Remuneration Are Treated Differently
Where the business operates through an Indonesian limited liability company (PT), the company’s assets are legally distinct from the personal assets of its shareholders.
Retained profits remain within the company. If a PT PMA owned by a foreign spouse earns IDR 5 billion (USD 281,000) but retains those profits for operations or expansion, the amount does not automatically become personal property received by the foreign shareholder.
Dividends create a different issue. Once profits are validly distributed to a shareholder, the money has moved from the company to the spouse personally. If the dividend is received during the marriage, its classification under Indonesia’s joint-property regime becomes relevant.
The same distinction applies to salary or director remuneration. These payments are received personally by the spouse rather than remaining within the company and may consequently fall within the marital-property regime applicable to income acquired during the marriage.
Payments other than dividends or remuneration require separate classification because not every transfer from a company to a spouse represents property acquired from the business during the marriage. A shareholder loan repayment, for example, may represent repayment of an existing receivable rather than newly generated income.
Does Joint Property Give the Other Spouse Rights Over the Company?
A potential joint-property interest in business income does not automatically make the other spouse a shareholder.
Consider a foreign spouse who acquired shares in a PT PMA before marrying an Indonesian citizen. The company subsequently distributes IDR 1 billion (USD 56,000) in dividends to the foreign shareholder during the marriage. The treatment of that dividend under Indonesia’s joint-property regime is a separate question from ownership of the shares themselves.
Any potential marital-property interest of the Indonesian spouse in the dividend does not automatically transfer the foreign spouse’s shares or give the Indonesian spouse voting, directorship, or management rights in the PT PMA.
The same principle applies where the Indonesian spouse owns the company and the foreign spouse potentially has an interest in income received during the marriage. A marital-property interest in the proceeds is not equivalent to registered corporate ownership.
What Happens When Business Income Is Used to Acquire Other Assets?
A further issue arises when business income received during the marriage is subsequently used to acquire another asset.
The resulting assets must be considered separately under the marital-property regime. Income received from a company owned by one spouse does not necessarily mean that an asset subsequently acquired with those funds has the same legal character as the original company shares.
This distinction also applies when the money is returned to a business. A spouse may receive a dividend and later use it to subscribe for additional shares or provide a shareholder loan. The new shares or loan represent a separate legal interest from both the company’s original profits and the dividend previously received.
For mixed-nationality couples, this becomes particularly significant where the proceeds are used to acquire assets subject to Indonesian ownership restrictions. Land rights are a prominent example because the involvement of a foreign spouse can create additional ownership considerations under Indonesian law.
Can a Prenuptial or Postnuptial Agreement Change the Treatment of Business Income?
Indonesia’s default joint-property regime can be modified through a valid prenuptial or postnuptial agreement.
The terms of the marriage agreement may distinguish between ownership of the business and dividends, remuneration, or other income received from it.
This can apply whether an Indonesian spouse owns an established domestic company or a foreign spouse owns shares in a PT PMA. The relevant issue is whether the marriage agreement addresses the income generated by those interests rather than only ownership of the underlying shares.
Discuss Business Income and Marital Property with Jarji Zaidan & Partners
Jarji Zaidan & Partners advises mixed-nationality couples on business interests, joint marital property, and prenuptial and postnuptial agreements under Indonesian law. Contact us at info@jarjizaidan-partners.com  or on WhatsApp at +62 821-9000-3273 / +62 813-1403-8907 to discuss your legal requirements.
