How to Setup a Fintech Company in Indonesia – Fintech startups worldwide have increased from 12,131 in 2018 to 20,925 in 2020. This significant 72% growth has increased in the past two years. This means that fintech development will continue to grow. In Indonesia alone, the Fintech startup movement can be said to continue to experience rapid development. In recent years, the rise of the fintech business has received a lot of attention due to challenges for financial services companies today, including the traditional banking model. 

Financial technology (Fintech) is used to describe new technologies that seek to improve and automate the delivery and use of financial services. At its core, fintech is being used to help companies, business owners and consumers better manage their operations, processes and financial lives by leveraging specialized software and algorithms used in computers and, increasingly, smartphones. (Absorb old ways of handling data and embed new ways or financial operating standards). 

In this article, we will discuss how to set up a Fintech company in Indonesia and how to run it safely.

What is Fintech Companies?

What is Fintech Company

Fintech is a term used to describe financial technology, an industry that includes all types of technology in financial services – from businesses to consumers. Fintech describes any company that provides financial services through software or other technology and covers anything from mobile payment applications to cryptocurrency.

In general terms, fintech describes any company that uses the internet, mobile devices, software technology or cloud services to perform or connect with financial services. Many fintech products are designed to link consumer finance to technology for ease of use.

Fintech has made inroads with dozens of applications and has changed the way consumers access their finances. From mobile payment applications etc.

Initially, fintech referred to technology applied to the back-end systems of banks or other financial institutions – but has since grown to include a large number of other applications that are more consumer focused.

Category / Type in Fintech

Fintech Type

1. Peer-to-Peer (P2P) Lending and Crowdfunding

In order to understand PEER-TO-PEER LENDING (P2P Lending) in Indonesia, we need to refer to the OJK regulations that have regulated this matter, namely POJK 77/2016. According to OJK Regulation 77/2016, P2P is direct lending and borrowing services in rupiah currency between creditors / lenders (lenders) and information technology-based borrowers / borrowers (loan recipients). Fintech lending is also referred to as Technology-Based Lending and Borrowing Services (LPMUBTI).

(P2P lending and crowdfunding are also said to be financial marketplaces. A platform like this is able to bring together parties who need funds with those who provide funds as capital or investment. Usually, the process through P2P lending is more practical because it can be done in one online platform).

As of January 22, 2021, the total number of registered and licensed fintech operators is 148 companies. OJK urges the public to use fintech lending service providers that are registered / licensed by the OJK.

For complete information about fintech lending providers, please click on the following link: 

Note: Extra License for P2P Business

Registration of Electronic System Operators at Kominfo

Must attach proof of registration of electronic system Operators. To obtain such proof of registration, Providers are required to register  

One of the things that need to be considered is the location of the data center and data center for disasters which must be in Indonesia.

2. Investment Risk Management

In this one type, you can monitor financial conditions and also carry out financial planning more easily and practically. Types of investment risk management are usually present and you can access them via a smartphone. You only need to provide the data needed to be able to control your finances.

3. Payment, Clearing, and Settlement

There are several financial startups that often provide payment gateways or e-wallets, both of which are still included in the payment, clearing, and settlement categories.

4. Market Aggregator

This type of fintech currently refers to a portal that collects a variety of financial-related information to be served to target audiences or users. Usually, this type of fintech contains a variety of information, financial tips, credit cards, and investments. With this type of fintech, it is hoped that you will be able to absorb a lot of information before making financial decisions.

How to Establishing a Fintech Company in Indonesia and How the Process?

How to Establishing a Fintech Company in Indonesia and How the Process

1. Forming a Company

Based on Article 2 paragraph (2) POJK No. 77, the form of a company that can provide information technology-based lending and borrowing services is in the form of a PT or a cooperative. Forms of Fintech companies must be legal entities and aim for profit.

Furthermore, in Article 3 paragraph (1) POJK No. 77 stipulates that either the PT or the cooperative can be owned by Indonesian citizens and / or Indonesian legal entities and / or foreign citizens and / or foreign legal entities. Foreign citizens or foreign legal entities can directly or indirectly own a maximum stake of 85% in the company.

2. Company Establishment

The establishment of a Fintech Company must pay attention to the preparation of the Company Establishment Deed. Based on Article 11 POJK No. 77, in the Deed of Establishment and Articles of Association for the Establishment of a Fintech Company, at least it contains business activities as a company that runs information technology-based lending and borrowing services. Furthermore, based on Article 43 paragraph (1) POJK No. 77 stipulates that Fintech Companies are prohibited from carrying out business activities other than the business activities of providing information technology-based lending and borrowing services, are prohibited from acting as a Lender or Loan Recipient, issuing debt securities, providing recommendations to Users, publishing fictitious information or providing guarantees in all forms of fulfillment of the obligations of other parties.

3. Fintech Company Capital

Based on Article 4 paragraph (1) POJK No. 77, Fintech companies in the form of PT or cooperatives are required to have a paid-up capital of at least Rp. 1,000,000,000, – (one billion rupiah) at the time of registration. When applying for a license, Fintech Operators, both in the form of a PT and a Cooperative, are required to have a paid-up capital of at least Rp. 2,500,000,000, – (two billion and five hundred rupiah).

4. Company Establishment Documents

The required documents in general for the establishment of a Fintech company are the preparation of a PT establishment deed, in which there is a Articles of Association containing information related to the company, obtaining approval from the Minister of Law and Human Rights, Tax Card (NPWP)  on behalf of the company, a Trading Business Permit/Business License (Izin Usaha-IU) Business Identification Number (NIB), Company Domicile Certificate (Location Permit/Izin Lokasi), and BPJS Ketenagakerjaan along with legalized proof of capital fulfillment.

How to Register a Fintech Company with the OJK?

Register a Fintech Company with the OJK

Based on Article 8 POJK No. 77, Fintech organizers are required to submit an application for registration to the OJK. Application for registration must be submitted by the Board of Directors of the Company to the Chief Executive of the Supervisor of Insurance, Pension Funds, Financing Institutions and Other Financial Services Institutions, by attaching company documents in the form of:

1. Deed of Establishment of a Legal Entity including the articles of association and amendments thereof which have been approved by the Minister of Law and Human Rights;
2. Proof of identity and curriculum vitae, complete with recent color photographs of shareholders who have shares of at least 20%, members of the Board of Directors and members of the Board of Commissioners;
3. Company Tax Card / NPWP;
4. Certificate of Domicile of the Company;
5. Evidence of operational readiness for business activities in the form of documents related to electronic systems used by operators and data on operational activities, which have been verified by the ISO: 27001 Quality Management System;
6. Proof of compliance with the requirements for capital and;
7. Statement of settlement plans related to user rights and obligations in the event that the operator’s licensing is not approved by the OJK.
8. The period of approval for registration applications submitted by Fintech Operators is 10 working days after the registration application documents are declared complete and in accordance with the requirements. If the registration is approved, the OJK will provide a proof of registration.

Fintech Company Licensing

Fintech Company Licensing

Within a period of 1 year since the Fintech Company has registered the Evidence Certificate, the next process is to take care of the licensing. If within the deadline stated by the OJK, the Fintech Company is unable to apply for a license, the registered proof will be declared null and void.

The request for permission is submitted by the Fintech Company Directors to the Chief Executive of Supervision of Insurance, Pension Funds, Financing Institutions and other Financial Services Institutions by attaching:

1. Deed of Company Establishment.
2. List of ownership in the form of a list of shareholders including details on the amount of each share ownership.
3. Shareholders Data;
4. Directors and Commissioners data;
5. Evidence of legalized fulfillment of capital and is still valid during the process of requesting a license on behalf of a commercial bank carrying out conventional business activities and / or based on sharia principles, which is legally incorporated in Indonesia;
6. Organizational structure of the organizers;
7. Guidelines / standard operating procedures related to the implementation of anti-money laundering and terrorism financing prevention programs;
8. Work plan for the first year;
9. Proof of operational readiness in the form of proof of ownership or control of office buildings and rooms, a list of inventory and office equipment;
10. Company Tax Card / NPWP;
11. Statement of Settlement Plan related to the rights and obligations of the User in the event the organizer is unable to continue the operational activities of the electronic system of information technology-based lending and borrowing services; and
12. Proof of Payment of Licensing Fees.

What is the Maximum Limit for Providing Loans by Fintech Lending to each Borrower?

Maximum Limit for Providing Loans by Fintech Lending to each Borrower

OJK regulates the maximum loan limit to each loan recipient, i.e: IDR 2,000,000,000 (two billion rupiah). (Article 6POJK 77/2016).

Important Notice:
This information was obtained from: and statistik/direktori/fintech/Documents/FAQ%20Fintech%20Lending.pdf 

If you experience difficulties and ignorance in processing the Establishment of a Fintech Services Business Legal Entity in Indonesia, related to the procedures and legal foundations that apply in Indonesia.

We are Indoservice, a secretarial and licensing services consulting firm that can assist you in setting up a company in Indonesia and business-related licensing. Trusted and experienced in Indonesia, committed to providing the best and fast service to meet your needs. 

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