BRIEF EXPLANATION INSTITUTION FOR EDUCATIONAL LLC

Client Name : TURKISH MAARIF FOUNDATION (TMF)

Origin State : Turkey
Incorporation Article : Law No. 6721, June 17th, 2016
Legal Entity : Foundation
Activities : Education

Questions:

1. What potential structure suits the best for Turkish Maarif Foundation?
2. Is the structure allowed to open private schools? Is it possible to collect tuition fees?
3. Is it possible for the organization to receive funds from the TMF based in Turkey? And what
kind of financing model is most efficient?
4. Is it possible for the structure to transfer money from Indonesia to Turkey?
5. What are the tax framework of such activities and actions?
6. What are the documents needed for the creation of the structure?

Answer:

1. The potential structure that we highly recommend is to establish Foundation or Limited

Liability Company.

2. Yes the structure is allowed to open private schools or other form of education, and yes it is
possible to collect tuition fees.

3. Yes, it is possible to receive funding from TMF Host in Turkey, however TMF, in order to
be able to establish educational structure is required to perform joint establishment with
Indonesian based Foundation that enrols in educational activities or other educational
form.

4. Funds transfer from Indonesia to Turkey is possible, however TMF is required to establish
the structure first and make a bank account on behalf of the structure.

5. Taxes imposed on Foundation institutions engaged in the field of education based on point
3 SE-34/PJ.4/1995 concerning Income Tax Treatment for Foundation or Similar
Organizations are:
a. Registration and registration fees;
b. Money for student acceptance/college student/education participant selection;
c. Building construction/ infrastructure fees or other payments of any name relating to
the presence of students/ college students/ participants in Education;
d. Tuition fees, Semester Credit Unit (SKS) money, examination fees, course fees,
seminar/workshop fees, etc;
 e. Income from work contracts in the field of research, etc;
f. Other income related to organizing services.

Other taxable objects include:

a. Deposit interest, bond interest, SBI discount and other interest;
b. Leases and other benefits in connection with the use of assets;
c. Profits from the transfer of assets, including the transfer of assets that originated from
assistance, donations or grants;
d. Profit sharing from business cooperation.

6.1 The documents required in establishing a Foundation based on Article 11 paragraph 2

Government Regulation Number 63 Year 2008 concerning Implementation of Foundation
Law (“GR 63/2008”).

The requirements that must be fulfilled by TMF as a Foreign Legal Entity (FLE) based on
on Article 11 paragraph 2 GR No. 63/2008:
a. The indentity of the FLE founding the Foundation as proven by the validity of the legal
entuty founding the Foundation;
b. Separation of the portion of the founder’s assets which were used as the initial assets of
the Foundation at least Rp100.000.000,00 (one hundred million Rupiah) as evidenced
by a statement of the management of the founding legal entity concerning the validity
of assets;
c. Statement from the management of the legal entity concerned that the activities of the
Foundation established do not harm the community, nation and state of Indonesia.

Based on the Regulation of the Minister of Education and Culture of the Republic of
Indonesia Number 69 Year 2014 (Permendikbud No. 69/2014) Article 2 Paragraph 3 states
that the application for permission to carry out non formal education by attaching
documents consisting of:
a. License Principle from the Investment Coordinating Body;
b. Letters of Recommendation from the local provincial or regency/ city education office
in accordance with their authority;
c. Deed of incorporation of a foreign investment legal entity and amendments thereto
along with ratification as a legal entity from the Minister conducting government affairs
in the filed of law.

6.2 Foreign Investment company (PT PMA) is a business entity in form of a limited liability company
established under Indonesian laws as meant under the Law No. 40 of 2007 regarding Limited
Liability Company (the “Company Law”). The Law Number 25 of 2007 regarding Capital
Investment (the “Investment Law”) defines “Foreign Investment” as an investment activity to
perform business in the territory of the Republic of Indonesia by foreign investors, either
through foreign investment entirely or joint venture with domestic investors.
Organizational structure of the PT PMA must fulfil the requirement under the
Company Law, namely:
1. Minimum of 2 (two) shareholders;
2. Established company organ which shall at least consist of:
a. the General Meeting of Shareholders;
b. the Board of Directors with at least 1 (one) Director;
c. the Board of Commissioners with at least 1 (one) Commissioner.

Ensure that all general requirements for the establishment of a limited liability
company (PT) are complete, including:
1. The Deed of Establishment of PT;
2. Decree of the Minister of Law and Human Rights concerning the Ratification of the legal
entity of the PT; and
3. Taxpayer Identification Number (Tax ID/NPWP)

Fulfil the investment value and capital requirements to obtain Investment License,
namely:
1. asset of IDR 10 billion or more excluding land and buildings of business place, according
to the latest financial statements or annual sales of more than IDR 50 billion according to
the latest financial statements;
2. total investment value of IDR 10 billion or more excluding land and buildings;
3. issued and paid up capital of at least IDR 2.5 billion.

Obtain Single Business ID Number (NIB) and other relevant business licenses
through the Online Single Submission (OSS) or BKPM system in accordance with
the company’s business sector

NIB is the identity of the business entity issued by the OSS Agency upon registration of the
business entity by the applicant. NIB also applies as:

1. The Company Registration Certificate (TDP) Number

2. Importer Identification Number (API), if the company will carry out import activities
3. Customs access or Custom ID (NIK), if the company will carry out cross border trading
activities (export and/or import)