Financial Company Registration in Indonesia: Step-by-Step Guide

Indonesia is an excellent location for establishing a financial company due to its expanding economy and growing digital transactions. However, it requires navigating complex regulations, meeting capital requirements, and complying with local laws. 

In this guide, we will provide a step-by-step approach to setting up a financial company in Indonesia, covering types of financial businesses, legal requirements, registration processes, and potential challenges. 

Why Start a Financial Company in Indonesia? 

Indonesia’s financial sector is growing fast, driven by government support, digital adoption, and financial inclusion. The digital economy is expected to reach $2.8 trillion by 2040. 

By 2024, e-commerce transactions exceeded $60 billion, and QR payments hit IDR 120 trillion, showing a major shift to digital finance. With over 25 million registered merchants, Indonesia leads ASEAN, and this is expected to surpass 50 million by 2025. 

With 280 million people and rising demand for banking, investment, and insurance, Indonesia is a prime market for financial companies. Despite global challenges, the sector remains strong, with 42% year-on-year transaction growth, one of the fastest among G20 nations. 

Types of Financial Companies You Can Establish in Indonesia 

With the rapid growth of Indonesia’s financial sector and strong government support, there are numerous opportunities to establish a profitable financial business.  

However, before entering the market, you must understand the different types of financial companies you can set up. Each type comes with specific licensing and regulatory requirements that must be met to ensure compliance with the OJK (Financial Services Authority) and Bank Indonesia. 

• Banks: Commercial and rural banks provide financial services. 
• Asset Managers & Brokers: They handle investments, stocks, and bonds. 
• Financial Advisers: Offer to consult on financial planning and investments. 
• Pension Funds: Manage retirement savings and investment plans. 
• Insurance Companies: Provide life, health, and property insurance. 
• Multi-Finance Companies: These companies Offer leasing, credit, and factoring services. 
• Payment System Providers: Manage e-wallets, digital transactions, and payment gateways. 
• Lending Platforms: Peer-to-peer lending and digital loan services. 
• Financial Aggregators: Compare and recommend financial products. 
• Crypto & Digital Financial Asset Companies: Operate cryptocurrency exchanges and blockchain finance services. 

READ MORE:

• The Future of Financial Technology in Indonesia: Trends and Opportunities
• Fintech in Indonesia: Understanding Basic Compliance
• The Role of Digital Transformation in ASEAN’s Economy

Legal Requirements & Regulations for Financial Businesses 

To establish a financial company in Indonesia, businesses must obtain in-principle approval and licenses from relevant authorities, such as the OJK (Financial Services Authority) or Bank Indonesia. Below are the key legal requirements: 

• Legal Form & Ownership: A limited liability company (PT) with at least two shareholders. Foreign ownership is subject to sector-specific limits. 
• Fit & Proper Test: This test is required for directors, commissioners, and controlling shareholders and is conducted by OJK or BI. 
• Capital Requirements: These vary by sector (e.g., IDR 3 trillion for commercial banks). Shareholders must fully pay up capital before registration. 
• Business Plan: Must outline feasibility, financial projections, and operations. 
• MOLHR Approval: The company must be legally established before applying for a business license. 

Step-by-Step Guide to Registering a Financial Company in Indonesia

Opening a financial company in Indonesia follows the general company formation steps, with additional licensing requirements. The key steps include: 

• Choose a Business Form: A limited liability company (PT) is the most common structure. Foreign-owned companies must meet specific conditions. 
• Apply for a Company Name: The chosen name must be checked for availability and reserved. 
• Choose the Shareholding Structure: At least two shareholders and one director are required. 
• Draw Up the Deed of Establishment: This legal document defines the company’s purpose and structure. 

After completing these steps, businesses must proceed with licensing from OJK or Bank Indonesia, depending on their financial activities. 

Challenges When Starting a Financial Business in Indonesia 

Starting a financial company in Indonesia has several challenges for which investors must be prepared. Key obstacles include: 

Foreign Ownership Limitations 

Indonesia restricts foreign ownership in specific financial sectors. The Positive Investment List outlines which industries allow foreign investment and their ownership limits. This list changes periodically, making it crucial to stay updated. 

Foreign investors can establish a Foreign-Owned Company (PT PMA), but it requires a minimum investment of IDR 10 billion, and it must be fulfilled within five years. Another option is setting up a Representative Office, but this entity cannot generate revenue and requires an overseas parent company. 

Complex Government Regulations 

The business registration process in Indonesia involves multiple agencies and frequent regulatory updates. Obtaining a license from the Indonesia Investment Coordinating Board (BKPM) requires various documents, including: 

• Certificate of Domicile 
• Taxpayer Identification Number (NPWP) 
• Approval from the Ministry of Law and Human Rights (MOLHR) 

Since regulations change frequently, companies must stay compliant to avoid delays or penalties. 

Competition & Market Saturation 

Indonesia’s fast-growing financial sector attracts local and foreign players, intensifying competition. Standing out in this crowded market requires the following: 

• Strong market research to identify demand and gaps. 
• Unique value propositions to differentiate from existing financial services. 
• Strategic local partnerships to gain insights and market access. 

Despite these challenges, careful planning, compliance, and strong local networks can help financial businesses succeed in Indonesia. 

Establish Your Financial Company in Indonesia with InCorp 

Starting a financial company in Indonesia demands careful planning and compliance with OJK, Bank Indonesia, and other authorities. Understanding foreign ownership rules, licensing, and market competition is essential for success.  

Effective strategic planning and strong local partnerships are essential for establishing a profitable financial business. Collaborating with a reliable service provider can facilitate a smooth setup. InCorp Indonesia offers comprehensive support for these needs, including: 

• Company Registration: Get your PT or PT PMA registered quickly and efficiently. 
• Business Licensing: Ensure your financial company obtains the right licenses from OJK and Bank Indonesia. 

Fill out the form below to grow your financial business while ensuring full legal compliance in Indonesia’s dynamic market.