Insights

INTRODUCTION

On 5 December 2025, the Financial Services Authority (Otoritas Jasa Keuangan or “OJK”) issued OJK Regulation No. 32 of 2025 on the Implementation of Buy Now Pay Later (“OJK Reg 32/2025”), which entered into force on 15 December 2025.

This regulation establishes a comprehensive legal framework governing Buy Now Pay Later (“BNPL”) services in Indonesia. Its issuance reflects OJK’s response to the growth of digital financing technology, and the need for a regulation to ensure the implementation of BNPL in the financial services sector is conducted with due regard to prudential, consumer protection, and good governance principals.

CONCLUSION

OJK Reg 32/2025 marks a significant development in Indonesia’s digital financing regulation. By clearly embedding BNPL as a regulated product, OJK has reinforced oversight, improved transparency standards, and enhanced consumer protection safeguards.

For Commercial Banks, Financing Companies, and digital platform partners, this regulation signals a more structured regulatory environment. Timely compliance alignment and strategic reassessment of BNPL frameworks will be essential to ensure continued operation within Indonesia’s evolving financial regulatory framework.

Regards,

Pasaka Rievan Smith 
Counsellors at Law

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INTRODUCTION 

For High-Net-Worth Individuals (individu dengan kekayaan tinggi or “HNWI”) and family-based enterprises, wealth is rarely limited to liquid assets. It is often embedded in operating companies, holding structures, land and buildings, strategic investments, and intergenerational businesses that have been built over decades.

Yet, the very diversity and scale of these assets also create vulnerability. Without careful legal structuring, private wealth can gradually erode, not due to market forces, but due to fragmented ownership, inheritance disputes, regulatory non-compliance, or inadequate documentation.

Private wealth management, from a legal perspective, is therefore not merely about protection. It is about continuity, control, and orderly transfer of value across generations.

CONCLUSION

Wealth that is carefully structured is more likely to survive generations.

Through proper legal planning, families can preserve not only assets, but also control, harmony, and legacy, ensuring that what has been built over time continues to hold value for the future.

Regards, 

Pasaka Rievan Smith 
Counsellors at Law

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INTRODUCTION

The landscape of corporate administration in Indonesia has undergone a significant transformation. On December 11, 2025, the Ministry of Law of the Republic of Indonesia officially enacted Minister of Law Regulation No. 49 of 2025 on the Requirements and Procedures for the Establishment, Amendment, and Dissolution of Limited Liability Company Legal Entities (Peraturan Menteri Hukum No. 49 Tahun 2025 tentang Syarat dan Tata Cara Pendirian, Perubahan, dan Pembubaran Badan Hukum Perseroan Terbatas or "MoL Reg. 49/2025").

This regulation is a strategic response to the evolving legal environment, aiming to create a more transparent, effective, and accountable corporate legal service within the Ministry of Law. For business players, this is not merely a procedural update; it signals a shift toward stricter ongoing compliance and digital accountability.

CONCLUSION

The enactment of MoL Reg. 49/2025 marks a definitive end to the "file and forget" era of corporate administration in Indonesia. The introduction of mandatory annual report submissions and the severe penalty of SABH blocking means that corporate compliance must now be a permanent fixture on the Board's agenda.

We believe that regulatory changes are an opportunity to strengthen corporate integrity. We invite you to contact our advisors to ensure your business remains compliant and competitive in this new regulatory environment.

Hormat kami, 

Pasaka Rievan Smith 
Counsellors at Law 

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INTRODUCTION

The Indonesian business landscape has reached a significant milestone with the official enactment of Central Bureau of Statistics Regulation (or Peraturan Badan Pusat Statistik) No. 7 of 2025 on the Indonesia Standard Business Classification (or “KBLI 2025”). This regulation effectively revokes and replaces the previous PBPS No. 2 of 2020, introducing a more granular and globally aligned framework for classifying economic activities in the country.

For businesses operating in Indonesia, understanding this transition is not merely an administrative task but a critical compliance requirement. Below is a comprehensive analysis of the changes and what they mean for your organization.

CONCLUSION

The enactment of KBLI 2025 is a strategic recalibration of Indonesia’s business ecosystem rather than a mere administrative update. With the mandatory six-month transition period ending on June 18, 2026, businesses must proactively map their activities to the new codes to mitigate compliance risks and unlock sector-specific incentives. By approaching this transition as a strategic tool rather than just a compliance obligation, companies can ensure regulatory certainty and better position themselves for sustainable growth in an increasingly modernized market.

Regards, 

Pasaka Rievan Smith
Counsellors at Law

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INTRODUCTION

The pace of innovation in today’s financial industry is unprecedented. Technologies that once took years to develop now emerge in months, sometimes weeks, creating a landscape where products, services, and business models can shift before regulators have time to respond. As a result, governments around the world face the same challenge: how to protect consumers and maintain market integrity without slowing down innovation? 

Indonesia is no exception. Just as a new regulation is issued, the industry often produces another technology that reshapes the market again. This constant cycle places regulators in a perpetual “catch-up mode”, requiring a more adaptive, principles-based approach in overseeing financial innovation.

Against this backdrop, Indonesia has begun introducing significant reforms. One of the most notable developments is the Financial Services Authority’s (Otoritas Jasa Keuangan or “OJK”) Regulation on the Implementation of Technological Innovation in the Financial Sector (Inovasi Teknologi Sektor Keuangan or “ITSK”). This OJK’s regulation that started to effective in 2024 is designed to modernize the supervisory modal for financial services innovation. This was one of the responses done by OJK when the regulatory oversight of ITSK activity, including digital assets and crypto assets has officially shifted to OJK. This marks a major transformation in how digital assets ecosystem will be governed going forward.

This article will explore how Indonesia is recalibrating its regulatory architecture to keep up with the rapid evolution of financial technology – while ensuring stability, accountability, and consumer protection remain at the center of innovation.

CONCLUSION

Indonesia is not only reforming its financial regulatory framework, it is opening the door to one of Asia’s most dynamic fintech markets. With over 270 million people, a rapidly growing middle class, and one of the highest mobile adoption rates in the region, the opportunities for innovative financial solutions are immense.

Through the P2SK Law and OJK Reg. 3/2024, OJK has created a clear, structured pathway for fintech and digital asset operators to enter the market. The Regulatory Sandbox is more than a compliance mechanism, it is a strategic launchpad. It allows businesses to test new models in a controlled environment, gain regulatory clarity, and build consumer trust before scaling operations.

For forward-looking fintech players, this framework offers three critical advantages:

·       Reduced Regulatory Uncertainty – Early engagement with OJK ensures smoother licensing and investor confidence;

·       Consumer Trust & Market Adoption – Strong emphasis on data protection, cybersecurity, and fair conduct builds credibility with Indonesian consumers; and

·       Scalable Entry Pathways – Whether through Sandbox participation or direct licensing, OJK provides structured routes for both innovative and established models.

Indonesia’s regulatory transformation signals that the market is ready for serious, well-governed innovation. For businesses willing to align with OJK’s principles of governance, risk management, and consumer protection, the rewards are significant: access to a fast-growing digital economy, a supportive regulatory environment, and the chance to be part of shaping Southeast Asia’s next fintech hub.

Pasaka Rievan Smith (“PRS”) stands ready to assist. With proven experience in advising clients on ITSK structures, Sandbox eligibility, licensing pathways, and digital financial asset regulations, PRS is well-equipped to guide businesses through this evolving regulatory environment and ensure that their innovations remain both compliant and competitive. In addition to regulatory advisory, PRS assists clients in structuring their business models, whether involving real-asset-backed frameworks, digital financial infrastructures, or cross-border investment components, ensuring alignment with OJK’s expectations and sector-specific obligations. PRS further supports clients in navigating the complexities of innovative financial-technology concepts, helping transform sophisticated ideas into operationally sound, regulatorily compliant models capable of scaling sustainably within Indonesia’s fintech ecosystem.

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INTRODUCTION

In a bold step to boost foreign direct investment (FDI) and streamline business licensing, Indonesia’s Investment Coordinating Board (Kementerian Investasi dan Hilirisasi/Badan Koordinasi Penanaman Modal or “BKPM”) issued BKPM Regulations No. 5 of 2025 on Guidelines and Procedures for the Implementation of Risk-Based Business Licensing and Investment Facilities through the Electronically Integrated Business Licensing System (Online Single Submission) (or “BKPM Reg. 5/2025”) on October 2025. This Reform significantly lowers capital entry barriers for foreign-owned companies eyeing the Indonesian market.

CONCLUSION

BKPM Reg 5/2025 marks a pivotal development in Indonesia’s Investment landscape. By lowering the entry barriers, expanding the definition of capital contributions, and simplifying licensing through the OSS System, the regulation makes Indonesia a far more attractive and accessible destination for foreign investors.

However, this newfound flexibility is balanced by a stronger emphasis on accountability and compliance. BKPM Reg 5/2025 introduces a more structured and transparent compliance framework that demands careful attention, proper documentation, and continuous monitoring from investors.

In this evolving environment, companies are encouraged to reassess their investment structures, ensuring that they not only capture the opportunities presented by the new regime but also maintain robust compliance mechanisms that stand up to regulatory scrutiny. To conclude, several important points should be noted regarding the application of BKPM Reg 5/2025 as the key takeaways and practical implications for PRS clients and investors.

     (i) Foreign Investment Structure:

While the paid-up capital requirement has been lowered (a welcome development for foreign investors), the minimum total investment threshold of IDR 10 billion remains in place. Accordingly, companies must carefully plan their capital structure to ensure compliance while maintaining commercial efficiency.

    (ii) LKPM Reporting Obligations:

Businesses that were previously exempt from LKPM (Investment Activity Report) requirements should verify whether they are now included under the updated regime. Non-compliance may result in administrative sanctions, so a prompt compliance review is strongly advised.

   (iii) Investment Incentives and OSS System Integration:

The process for applying for investment facilities and incentives has become more formalised, including submission, verification, and approval through the OSS System. Companies should ensure that their internal workflow and documentation align with the OSS System’s Framework and service-level agreement (SLA) requirements to avoid procedural delays.

   (iv) Transition and System Alignment:

Existing licences and approvals remain valid. However, companies may need to update access rights within the OSS System and ensure consistency with the new regulatory platform. A transition audit can help identify potential gaps in system integration or reporting.

   (v)  OSS System Upgrade:

With the upgraded OSS System now in effect, businesses must ensure their data, access credentials, and reporting mechanisms are properly aligned. Proactive system compliance will help avoid disruptions in future filings and approvals.

In summary, while BKPM Reg 5/2025 brings greater flexibility and opportunities for investors, it also introduces a more structured and transparent compliance environment. Companies are encouraged to review their current investment frameworks, update their internal systems, and ensure readiness under Indonesia’s evolving regulatory regime.

Regards, 

Pasaka Rievan Smith
Counsellors at Law


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INTRODUCTION

Indonesia holds a vast portfolio of State Owned Assets worth around IDR 13,692 trillion (as of end 2024) including land, buildings, infrastructure, machinery, and facilities of high economic value. Many remain underutilized, representing untapped revenue and growth potential. The legal framework enables State Owned Enterprises (or Badan Usaha Milik Negara “BUMN”), Regional Government-Owned Enterprises (or Badan Usaha Milik Daerah “BUMD”), and private companies to partner with the Government to optimize these assets, boosting infrastructure, productivity, investment, and mutual economic benefits.

CONCLUSION 

The utilization and management of State Owned Assets offer businesses a strategic opportunity to partner with the Government in high value projects that advance economic growth and infrastructure development. A strong legal framework safeguards State ownership while ensuring legal certainty and investment protection for private partners. However, private partners must exercise caution to ensure that agreements are signed by the authorized official/institution representing the state as the legal owner of the assets. If executed with an unauthorized party, such agreements may be deemed null and void by law, exposing private partners to significant legal and financial risks.  With experienced legal advisors guiding planning, due diligence, contract drafting, compliance, and dispute resolution, agreements can be structured to maximize value, protect interests, and ensure sustainability thus optimizing asset potential and contributing to Indonesia’s long term economic prosperity.

Regards, 

Pasaka Rievan Smith
Counsellors at Law

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INTRODUCTION

Indonesia, as a country with a population of more than 250 million, intends to attract many foreign education institutions to establish higher education such as universities or its equivalent, or make cooperation with local education institutions. This comes with some purposes, some of them are to escalate national education and to attract international students to pursue education in Indonesia.

The establishment of an educational institution must comply with the applicable regulations on the organization and management of educational institutions. In Indonesia, in establishing a Foreign University, its stakeholders (whether individual or legal entity) must form a foundation as a legal entity to run the educational activities. Since educational activities in Indonesia shall be owned by a Foundation, thus educational institution such as a school and university must not aim to generate profits.

CONCLUSION 

The establishment of a Foreign University in Indonesia presents both opportunities and regulatory challenges. As Indonesia seeks to enhance its national education system and attract international students, foreign universities must carefully navigate the country’s legal framework. 

One of the key requirements is that a foreign university must be established through a non-profit foundation, with specific capital and governance structures in place. In addition, compliance with relevant regulations whether in KEK or non-KEK area is essential. Foreign universities must also meet global ranking criteria and adhere to their home country’s academic standards while aligning with Indonesian regulations. 

By fulfilling these requirements, foreign universities can successfully establish their presence in Indonesia, contributing to the nation's educational landscape while ensuring compliance with local laws.

Since the establishment of Foreign University in Indonesia has to be done through a non-profit foundation, PRP Law Firm has the experience that could assist the clients in guiding and structuring the best legal way for the benefit of the stakeholders on the establishment of Foreign University while contributing to the better education in Indonesia.

Regards,

Pasaka Rievan Smith
Counsellors at Law


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INTRODUCTION

I. Introduction of a Shareholders’ Agreement

In order to incorporating a company to be a legal entity in Indonesia, we must to abide the rules under the Law No. 40 of 2007 on Company Law (“Company Law”). According to Art. 2 of Company Law, a company must to have: (i) purpose and objectives of the company; (ii) business activities that do not conflict with the provisions of laws and regulations, public order, and/or decency. Therefore, a company must to be clear on its purpose of the establishment.

Incorporating a company in Indonesia has a minimum of the shareholders. A potential company must meet a minimum of 2 (two) shareholders along with notary deed. The shareholders have to agree on terms that ruled under the Articles of Association (“AOA”). The shareholders allowed to make a separate agreement in order to providing or securing related matters that are not included in the AOA, as long as the provision in such agreement is not less than what is stated in the Company Law. This agreement called as the Shareholders’ Agreement (“SHA”).

Normally, AOA will contain general necessary matters or details of a company. On the other hand, SHA could arrange or provide for the complexity of the shareholders’ interests. Essentially, SHA does not regulate by the Company Law as requirements to incorporating a company, however SHA can be made by following applicable regulations on the Indonesia Civil Code (“ICC”).

II. Purpose of Shareholders’ Agreement

Despite the SHA is a non-mandatory, however SHA can be a benefit-maker for the company and its shareholders. The followings are the purposes and/or reasons of the importance of SHA:

1. regulate the reserved matters;
2. regulate the shareholders’ quorum requirement in details;
3. representative/position of Board of Commissioners (“BOC”) and Board of Directors (“BOD”);
4. promotes governance;
5. provides solution for deadlocks;
6. protects confidentiality;
7. protects minority shareholder;
8. provides non-compete restrictions; and
9. defines clear exit strategies.

In addition, there are more purposes and reasons to create a Shareholder Agreement to be considered.

CONCLUSION

SHA serves as a vital instrument in regulating the rights and obligations of shareholders beyond the provisions of the (AOA). While not a mandatory requirement under Company Law, an SHA provides numerous advantages, including safeguarding shareholder interests, mitigating disputes, and ensuring corporate governance.

The legal foundation for an SHA in Indonesia is derived from the principle of freedom of contract under the ICC, allowing shareholders to define specific terms tailored to their business needs. This agreement can encompass critical elements such as capital structure, dividend policies, confidentiality, non-compete restrictions, and dispute resolution mechanisms. By incorporating these provisions, shareholders can establish a structured framework that promotes stability, transparency, and long-term business sustainability.

Ultimately, a well-drafted SHA enhances legal certainty and minimizes risks by preventing conflicts and ensuring that shareholders operate within clearly defined boundaries. Therefore, companies seeking to strengthen their internal governance and protect their commercial interests should consider implementing a comprehensive SHA as part of their corporate strategy.

Regards, 

Pasaka Rievan Smith
Counsellors at Law

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INTRODUCTION

One of the most common paths to building wealth in Indonesia is through entrepreneurship. Whether undertaken by individuals or groups, running a business requires legal certainty. This legal foundation is most commonly achieved by establishing a Limited Liability Company known in Indonesia as Perseroan Terbatas (“PT”).

A PT is recognized as a legal entity with its own rights and obligations, distinct from its founders or managers. Under Indonesian law, a PT must be established by at least 2 (two) individuals through a notarial deed, with each founder required to subscribe to shares in the company. These founders, by holding shares, become shareholders of the PT.

As a legal subject, a PT stands independently and has the authority to act on its own behalf. This includes the ability to enter into legally binding agreements, such as incurring debt or establishing contractual obligations with third parties.

As shareholders, they are granted specific legal rights under Indonesian corporate law. However, these rights are also accompanied by responsibilities and limitations that every shareholder must understand and respect.

In this article, we highlight the key rights, obligations, and regulatory frameworks that govern shareholders in Indonesia essential knowledge for anyone involved in business ownership or corporate structuring in the country.

CONCLUSION 

Understanding the legal framework of share ownership in Indonesia is essential for anyone involved in building or managing a company. The Company Law, Investment Law, and their implementing regulations collectively establish the rights, obligations, and limitations that shareholders must observe, whether domestic or foreign. From determining the type and structure of shares to navigating ownership limits and dividend entitlements, including applicable tax obligations, shareholders must be well-informed to ensure compliance and protect their interests. By adhering to these legal provisions, companies and investors alike can foster a more secure, transparent, and accountable corporate environment aligned with Indonesia’s business and regulatory landscape.

Regards,

Pasaka Rievan Smith 
Counsellors at Law

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