14 March 2024

On 23 January 2024, Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan OJK”) issued the Roadmap for the Development and Strengthening of Venture Capital Companies for the Period 2024 - 2028 (Roadmap Pengembangan dan Penguatan Perusahaan Modal Ventura 2024 - 2028) (“Roadmap”). The establishment of the Roadmap is aimed at strengthening the country’s venture capital company regime, which has experienced rapid growth in recent years, and follows the issuance in December 2023 of OJK Regulation No. 25/2023 on the Business of Venture Capital Companies and Sharia Venture Capital Companies (“Regulation 25”).

These initiatives are in keeping with the enactment of Law No. 4/2023 on the Development and Strengthening of the Financial Sector (Pengembangan dan Penguatan Sektor Keuangan) which brought significant changes to the structure of the Indonesian financial industry, including venture capital.

This article discusses the key takeaways from the Roadmap and Regulation 25.


Regulation 25 makes several significant changes to the regulation of venture capital business, including classifying conventional venture capital companies and Sharia venture capital companies into venture capital corporations (“VCC”) and venture debt corporations (“VDC”) for the first time, defining each as follows:

  • VCC: A company that focuses on equity participation activities, investments through the purchase of convertible bonds/convertible sukuk (Islamic bonds) and/or the management of venture funds; and
  • VDC: A company that focuses on financing through the purchase of debt securities/sukuk issued by business partners in the initial start-up or business development stage.

Building on the changes set out in Regulation 25, OJK subsequently issued the Roadmap, a first for venture capital companies. The Roadmap sets out the vision for and direction of venture capital development in Indonesia for the next five years. OJK intends to build a venture capital industry that is healthy, has integrity, and focuses on financing start-ups. The Roadmap seeks to support the development of micro, small, and medium enterprises (“MSMEs”), ensure consumer protection, and contribute to national economic growth.

The regulation of VCCs and Sharia VCCs plays an important role in the financing of initial-stage or start-up companies and MSMEs/MSME debtors that cannot be fulfilled via financing by other means. Initial stage or start-up companies and MSMEs/MSME debtors are entities capable of helping to meet the Roadmap’s goals of expanding job opportunities, providing broad economic services to the community, equalising and increasing community income, promoting economic growth, and playing a role in achieving national stability.

Rationale of Roadmap

Potential and challenges

The Roadmap notes that Indonesia has great potential for the development of venture capital due to various factors, including Indonesia’s population which is relatively large in comparison to other South-east Asian countries and is supported by the demographic bonus of a large workforce. Indonesia’s economic capacity is the largest among the ASEAN nations. The Roadmap notes that regulatory support, taxation, funding and increasing public literacy are necessary to utilise Indonesia’s sizeable potential in the venture capital industry.

In terms of challenges in this sector, the Roadmap identifies geopolitical pressures, global supply chain disruptions, high inflation, tightening monetary policies, regulatory changes, and the dynamics of the political year as challenges for Indonesia’s venture capital industry. The Roadmap is intended to address these challenges by playing a key role in determining the direction of development and strengthening of the venture capital industry in the next five years. In this regard, it sets out key strategies, each of which has several specific work programs.


The Roadmap sets out its objectives as being:

  • Strengthening capital, governance, risk management and human resources
  • Strengthening regulations, permits and supervision
  • Strengthening consumer education and literacy
  • Strengthening the venture capital ecosystem
  • Fulfilment of data infrastructure and information systems

The Roadmap’s initiatives to achieve each of the above objectives will be launched in three phases over the period 2024 to 2028.

Phase One (2024 - 2025)

Phase One will involve initiatives to strengthen the foundation and consolidate the industry. For example, VCC and VDC capital should be strengthened during Phase One, including the fulfilment of the minimum equity requirements of IDR50 billion for VCCs and IDR25 billion for VDCs. OJK and the Association of Indonesian Venture Capital and Startups (“AMVESINDO”) are expected to work together to realise this goal. These two entities will also be expected to work together to develop training programs and devise regulations relating to venture capital business operations so as to strengthen risk management and improve the mentoring and capacity building of business partners.

OJK is also tasked with amending relevant regulations to refine and/or implement financial health assessment provisions in existing regulations.

It is during Phase One that OJK will amend the licensing framework for the venture capital industry, including:

  • amending or implementing regulations
  • adjusting regulatory and supervisory policies to address venture capital business activities
  • revising business licensing provisions and venture capital institutions

Phase One

Proportion of participation in total VCC distribution: At least 51%

Proportion of financing total VDC assets: At least 40%

Phase Two (2026 - 2027)

Phase Two involves continuing many of the work streams set up in Phase One and implementing:

  • permits for unlicensed VCCs
  • stronger supervision of VCCs in relation to anti-money laundering and countering the financing of terrorism
  • education and outreach programs relating to VCCs
  • structuring and strengthening the role of associations in improving the VCC ecosystem
  • coordination between OJK, AMVESINDO, and related institutions
  • building support for VCCs with pension funds, insurance companies, new entrepreneurs, custodian banks
  • an early warning system to monitor VCC data infrastructure and information systems

Phase Two

Proportion of participation in total VCC distribution: At least 52% - 66%

Proportion of financing total VDC assets: At least 41% - 66%

Phase Three (2028)

Phase Three is the final phase of the Roadmap and focuses on ecosystem development to support the venture capital industry and develop new opportunities for growth. It continues to build and implement the initiatives begun and capitalised upon in the earlier two phases, so that Indonesia’s venture capital industry is healthier, has integrity, protects consumers, and contributes to the development of innovation, MSMEs, and the national economy.

Phase Three

Proportion of participation in total VCC distribution: At least 67%

Proportion of financing total VDC assets: At least 67%

Implementation and continuation

The Roadmap is intended to be a live document and will be adapted and amended as necessary. OJK will evaluate the Roadmap’s implementation and the progress of each work program on a regular basis.