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how to start a crowdfunding business in indonesia

An Introduction to Crowdfunding in Indonesia & How to Start This Business

In recent years, the fintech (financial technology) industry, particularly in the crowdfunding sector, has grown rapidly and become increasingly popular around the world, including Indonesia.

Crowdfunding is a very powerful alternative finance in the country. According to the projection by the World Bank, the total value of the crowdfunding sector is going to hit US$96 billion by 2025.

Furthermore, a report from KPMG stated that the total crowdfunding value in six ASEAN countries (Indonesia, Singapore, Philippines, Vietnam, Malaysia, and Cambodia) in 2019 was recorded at US$242 million.

What is crowdfunding then? Crowdfunding is most often used by startups or expanding businesses as a method to access alternative fundings other than from the conventional financial institution.

It is part of fintech and an innovative way of sourcing and collecting funds from a wider community for new projects or businesses. Crowdfunding is also a great way for startups to cultivate a community to showcase their offerings and gain useful insights and customers.

Starting a business of crowdfunding in Indonesia is not all too difficult however the Indonesian government does impose certain rules on the crowdfunding sector.

So if you are considering setting up a crowdfunding company in Indonesia, this article is for you.

Popular Crowdfunding Platforms in Indonesia

Before going into the details on how to start a crowdfunding business in Indonesia, here are some of the notable ones in the country that you can learn and gain insights from:

  • Kolase.com for creative industries
  • Acceleration for middle small-medium enterprises (SMEs)
  • Kitabisa.com through donation
  • Ayopeduli.id for social activities
  • GandengTangan for micro business’s short-term financing

How to Start a Crowdfunding Business in Indonesia

The very first step to start a crowdfunding business in Indonesia is company registration. For foreign investors to set up a foreign company in the crowdfunding sector, they must obtain authorisation from the Indonesian Investment Coordinating Board (BKPM).

Upon the completion of the company registration, the crowdfunding company shall acquire its business license for operation.

Allowed crowdfunding services or activities for business operation in Indonesia are listed in the following:

  • Donation crowdfunding activities: donation of money from investors to companies
  • Equity crowdfunding activities: purchase of shares of registered companies on a crowdfunding platform by investors
  • Debt crowdfunding activities: money lending from investors to companies
  • Reward crowdfunding activities: rewards granted to investors

Regulations on Crowdfunding Company in Indonesia

In addition to the company registration and business license application, a crowdfunding business in Indonesia is obligated to fulfill the following requirements to protect the investors and the platform registrants.

Some of the important requirements are stated below:

  • Foreign investors are permitted to act as lenders as the owners of crowdfunding platforms
  • Foreign investors must have an Indonesian partner to operate a crowdfunding platform. The foreign investors of the platform have a maximum of 85% foreign ownership
  • A loan allowed via the platform is limited at a maximum of US$150,000
  • A crowdfunding platform in Indonesia must have at least a share capital of US$260,000

How Cekindo can Assist

Cekindo is a business setup company that can make crowdfunding business in Indonesia accessible and affordable for global individuals and companies.

By utilising a crowdfunding model through your crowdfunding business, many projects can be realised at a fraction of the total costs.

A crowdfunding business allows many entrepreneurs to build working capital, where financing through conventional methods has become a challenge for most foreigners.

We are a fully-authorised business setup company in the country with specialists who can analyse the potential and feasibility of your crowdfunding business by using our expertise.

Cekindo does all the hard work so you don’t have to. Your crowdfunding business with Cekindo’s assistance provides you with lucrative profits; and grants others with access to previously unavailable financing and investment opportunities.

Talk to us now. Start by filling in the form below.

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