Investors who open a financial company in Indonesia follow the general process for company incorporation in Indonesia, with the authorization requirements set forth by the two regulators in the country. Financial companies offer different types of services to their local and international clients: banking solutions, insurance, surety, venture capital, and others.
Our specialists can help you set up a company in Indonesia that will activate in the financial sector and will be properly authorized by and under the supervision of the relevant authorities. This article answers some of the main questions on how to open a financial company in Indonesia. For more information, please do not hesitate to reach out to our team.
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What are the steps required to open a financial company in Indonesia?
The Indonesian company incorporation process for businesses that will activate in the financial sector starts like in the case of any other company, a notable difference being the licensing phase for these types of entities.
Investors who open a financial company in Indonesia will follow the general company formation steps listed below:
- Choose a business form: the commonly used business form is the Indonesian limited liability company. Special conditions apply to foreign-owned companies and minimum share capital conditions are in place;
- Apply for a company name: the chosen and compliant name is first checked for availability and then reserved;
- Choose the shareholding structure: at least two shareholders and a director need to be nominated;
- Draw up the Deed of Establishment: our team can help investors prepare this constitutive document according to the purpose of their company when they open a financial company in Indonesia.
Foreign financial companies are also allowed to operate in Indonesia through subsidiaries and branch offices.
Our accountants in Indonesia remind interested investors that their company needs to be registed for taxation and will pay the following:
- 22% corporate income tax rate;
- 0.5% income tax on gross revenue for small and medium companies (subject to conditions);
- 11% standard value-added tax rate.
What entities regulate the Indonesian financial sector?
A key step for investors who open a company in Indonesia that will activate in the financial sector is to check if their activities are subject to authorization and/or supervision.
Bank Indonesia and the Financial Services Authority are the two regulators for the financial sector. These entities are responsible for both authorizing relevant companies and supervising their activities.
Bank Indonesia regulates banks and companies that operate in the financial services industries. The Financial Services Authority also regulates banks, along with large investment funds and insurers.
Law No. 4 of 2023 on the Financial Sector’s Development and Strengthening governs the financial sector and it also includes provisions for digital finance activities, relevant to investors who want to open a crypto company in Indonesia.
What types of financial activities require licensing in Indonesia?
The following need financial licensing in Indonesia:
- banks;
- asset managers, brokers, financial advisers;
- pension funds;
- insurance companies;
- multi-finance companies;
- payment system service providers;
- lending platforms;
- financial aggregators;
- companies dealing in digital financial assets (including crypto);
Investors who want to open a financial company in Indonesia and will engage in one or more of the activities listed above can reach out to our team for details on authorizations, licensing, and supervision.
What is the general licensing process for financial companies in Indonesia?
To obtain a license for financial activities, the company will submit a set of documents to the regulator according to the types of activities it will engage in.
The standard application process for a license issued by Bank Indonesia can be summarized as follows:
- Submit the required documents in electronic format to Bank Indonesia;
- Await for their verification;
- Provide the hardcopy of the documents once the electronic documents have been verified by the regulator;
- Comply with the on-site visits;
- Receive the approval or rejection of the application.
You can ask our agents to assist you with your financial license application, or you can reach out to us if you want to talk to our lawyers in Indonesia. Our team can also answer questions if you are interested in immigration to Indonesia
For assistance in opening a financial company, please contact our company registration agents in Indonesia.