What regulatory steps are required in Indonesia to launch a private equity fund targeting local SMEs?

The establishment of private equity funds in Indonesia is strictly regulated by the Financial Services Authority (OJK) and is typically categorized as a Venture Capital Company (PMV) or through an Equity Crowdfunding (ECF) mechanism, depending on the target investors and the scale of the funding.

The following are the general steps and requirements for establishing such a fund:

1. Understanding the Regulatory Framework


2. Legal Entity Form


3. Minimum Capital Requirements


4. Business Licensing Procedures


5. Focus on MSMEs

For more detailed guidance on current regulations, you can refer directly to the offcial portal of the Financial Services Authority (OJK) or If you are willing, please contact us through Lawzana. Thank you.

For private equity activities focused on SMEs in Indonesia, the most straightforward structure recognized by regulators is an OJK-licensed venture capital company (Perusahaan Modal Ventura/PMV). This structure may be complemented by a venture fund in the form of a collective investment contract, as provided under Articles 106–107 of Law No. 4 of 2023. In addition, tax incentives under Ministry of Finance Regulation No. 48/PMK.03/2018 may be utilized for equity participation in MSMEs with annual turnover below IDR 50 billion.

A reasonable estimated timeline from establishment to readiness for investment typically ranges from 4 to 9 months. The main challenges generally lie in the OJK licensing process, ownership structure (particularly where foreign parties are involved), capital adequacy requirements, and tax compliance discipline.