How to Open a Financing Company in Indonesia
Opening a financing company in Indonesia means licensing a perusahaan pembiayaan with the OJK, the Otoritas Jasa Keuangan, not registering an ordinary PT PMA through OSS. You need a minimum paid up capital (historically set around IDR 100 billion for new entrants, confirm the current figure with OJK before you budget), a passed fit and proper test for every controlling shareholder, director and commissioner, a written business plan and feasibility study, and patience. Full licensing commonly runs six months to well over a year from application to business license.
Table of Contents
- What counts as a financing company under Indonesian law
- Foreign ownership rules for a financing company in Indonesia
- Minimum capital requirements
- Step by step OJK licensing process
- Documents and people you need before you apply
- Financing company vs fintech lending vs bank
- Timeline and real costs
- FAQ
What Counts as a Financing Company Under Indonesian Law
In Indonesia, a financing company, or perusahaan pembiayaan, is a licensed non-bank financial institution supervised by the OJK. It is not a lending club, a buy now pay later app, or a loan broker operating on someone else's license. The activities that fall under this license include leasing, known as sewa guna usaha, factoring or anjak piutang, consumer financing for vehicles and goods, and in some cases credit card issuance and sharia-compliant financing. If your business model touches any of these, you need the OJK license before you touch a customer's money, not after.
People often arrive wanting to "open a finance company" when what they actually mean is a fintech lending platform or a simple leasing arrangement run through a trading PT. Those are different licenses with different capital thresholds and different regulators within OJK's structure. Getting the category wrong at the start means redoing the deed of establishment, the business plan and sometimes the shareholder structure from scratch.
Foreign Ownership Rules for a Financing Company in Indonesia
Foreign ownership of a multifinance company in Indonesia is permitted, and the sector has been opened progressively under successive investment regulations. The exact percentage allowed and any conditions attached to it (such as a requirement for an Indonesian partner, or additional capital obligations for foreign-controlled entities) are set out in the current positive investment list and OJK regulations, and these have shifted more than once in the last decade. Do not rely on a figure you read somewhere online from a few years ago. Confirm the current ownership cap and any conditions with OJK and with BKPM before you sign a shareholders agreement.
What has stayed constant is this: every controlling shareholder, whether local or foreign, individual or corporate, must pass OJK's fit and proper test. A foreign private equity fund or holding company wanting to control a multifinance entity should expect the same scrutiny on its ultimate beneficial owners as a local conglomerate would face.
Minimum Capital Requirements to Open a Financing Company in Indonesia
OJK sets a minimum paid up capital for new multifinance companies that is considerably higher than for a standard trading or service PT PMA. The figure most commonly cited in current practice is around IDR 100 billion, applied regardless of whether the shareholders are domestic or foreign, though the regulation has history of staggered deadlines and transitional thresholds for existing players. Because this number is set by OJK regulation and can be revised, treat any figure you see, including this one, as a starting point to verify, not a final answer.
| Requirement | Typical practice | Why it matters |
|---|---|---|
| Minimum paid up capital | Around IDR 100 billion, confirm current OJK threshold | Must be deposited and evidenced before the business license is issued, not pledged |
| Legal form | PT (local) or PT PMA (foreign shareholding) | Cooperative or sole proprietor structures are not eligible |
| Controlling shareholder test | Fit and proper test on integrity, competence, financial reputation | Applies to each shareholder with 25 percent or more, or de facto control |
| Directors and commissioners | Financial services experience required, OJK interview | At least one director typically needs prior sector experience |
| Gearing ratio once licensed | Debt to equity capped by OJK regulation | Affects how much you can lend relative to paid up capital |
Step by Step OJK Licensing Process
The path from idea to a working financing company runs through several distinct stages, and OJK will not let you skip ahead. Rushing the early steps to save a few weeks almost always costs more time later when the business license application gets kicked back for an incomplete business plan.
- Name reservation and deed of establishment. The PT or PT PMA is formed with a stated purpose that matches multifinance activities, not a generic "all lawful business" clause.
- Capital deposit. The paid up capital is transferred into a dedicated Indonesian bank account and evidenced with a bank statement, which becomes part of the application file.
- Business plan and feasibility study. This covers target market, product lines (leasing, factoring, consumer financing), risk management framework, organisational structure and three to five year financial projections.
- Fit and proper test. Controlling shareholders, directors and commissioners submit to OJK review and interview. This is the stage most applications stall on, usually because of incomplete personal documentation or an unclear ownership chain.
- Business license application (izin usaha). Once the above is in order, the full license application goes to OJK for substantive review.
- Operational readiness check. OJK may require evidence of office premises, IT systems, and internal policies before issuing the license.
- License issuance and OSS registration. After approval, the company registers its business classification through OSS and obtains its tax registration to begin operating.
Documents and People You Need Before You Apply
Three things sink applications more than anything else: an ownership structure nobody can draw on one page, directors who have never worked in a regulated financial institution, and a business plan written generically rather than for the Indonesian market specifically. Before you approach OJK, have ready:
- Deed of establishment and articles of association naming multifinance activities
- Full beneficial ownership chain, including documents for any foreign corporate shareholder
- CVs and supporting documents for proposed directors and commissioners showing financial services experience
- A business plan with realistic projections tied to actual Indonesian market data, not a template adapted from another country
- Bank evidence of the paid up capital deposit
- Draft internal policies on risk management, anti money laundering and consumer protection
If your directors and commissioners are foreign nationals who intend to live in Indonesia and run the company day to day, they will also need the correct residence and work permits once the entity is formed, separate from the OJK license itself. Our Work Permit Indonesia and Residence Visa guide covers what a foreign director actually needs to be legally resident and working, and our Bali Work Visa and KITAS guide walks through the KITAS categories that apply to company founders and executives.
Financing Company vs Fintech Lending vs Bank: Which License Do You Need
These three are regulated separately and people confuse them constantly. A bank takes deposits and is licensed and supervised differently, with its own far larger capital requirements. A fintech lending platform (peer to peer, often called P2P) is also OJK regulated but under a distinct set of rules, with lower capital thresholds and a narrower scope, mostly limited to facilitating loans between lenders and borrowers through a digital platform without carrying the loans on its own balance sheet in the same way a multifinance company does. A multifinance company (perusahaan pembiayaan) can lease assets, factor receivables, and provide consumer financing directly from its own balance sheet, which is why its capital and governance requirements sit higher than a P2P platform.
If your actual plan is an app that matches lenders with borrowers and takes a fee, you may be looking at the wrong license entirely, and applying for a multifinance license will cost you months and a capital commitment you did not need to make.
Timeline and Real Costs
Below is a realistic range based on how these applications typically move through OJK. Treat it as planning guidance, not a guarantee, since review times move with OJK's workload and the completeness of your file.
| Stage | Typical duration |
|---|---|
| Entity formation (deed, approvals) | Two to six weeks |
| Business plan and document preparation | Four to eight weeks |
| Fit and proper test | Six to twelve weeks, longer with foreign shareholders |
| Business license review by OJK | Three to six months |
| Total, formation to operating license | Six months to over a year |
Beyond the capital deposit itself, expect legal and advisory fees for drafting the business plan, structuring the ownership chain, and preparing shareholders and directors for the fit and proper interview. These fees vary by the complexity of the ownership structure and whether foreign shareholders need documents apostilled and translated. Ask any firm quoting you a flat fee what exactly is included, because "company setup" and "OJK license application" are two very different scopes of work that get bundled together loosely in marketing material.
The most expensive mistake: depositing the paid up capital and signing the deed of establishment before the business plan has been reviewed against OJK's actual expectations. Founders sometimes form the PT PMA first, assuming the license will follow routinely, then discover the stated business activities, shareholder structure or director experience do not meet OJK's standards. Unwinding a capital deposit, restructuring shareholding, or replacing a director after the entity already exists is slower and costlier than getting the structure right before a single share is issued. Get the OJK requirements confirmed in writing before you form the company, not after.
FAQ
Can a foreigner own 100 percent of a financing company in Indonesia?
Foreign ownership of a multifinance company is permitted under Indonesia's investment regulations, but the exact percentage allowed and any conditions attached have changed more than once in recent years. Confirm the current ownership cap with OJK and BKPM before structuring shareholding, rather than relying on a figure found online that may already be outdated.
How much capital do I need to open a financing company in Indonesia?
New multifinance companies generally need a minimum paid up capital around IDR 100 billion under current OJK practice, applied regardless of foreign or domestic ownership. This threshold is set by OJK regulation and has been revised before, so confirm the exact current figure with OJK directly before committing funds.
What is the difference between a multifinance company and a P2P lending company?
A multifinance company (perusahaan pembiayaan) leases assets, factors receivables, and provides consumer financing directly from its own balance sheet, under OJK's multifinance regulations and higher capital requirements. A P2P lending platform facilitates loans between separate lenders and borrowers through a digital platform and is licensed under a different, generally less capital-intensive OJK framework.
How long does it take to get an OJK license for a financing company?
From entity formation to receiving the operating business license, the process commonly takes six months to over a year. The fit and proper test on shareholders and directors and the depth of OJK's review of the business plan are usually the stages that extend the timeline, particularly when shareholders are foreign and documents need legalisation.
Do directors of a financing company need a KITAS?
Yes, foreign directors or commissioners who will reside in Indonesia and actively run the company need the appropriate residence and work permit, separate from the OJK financial license. The specific KITAS category depends on their role and shareholding, and should be arranged alongside, not instead of, the OJK licensing process.
Can an existing PT PMA be converted into a licensed financing company?
In principle yes, if the PT PMA's stated business activities are amended to match multifinance activities, capital is increased to meet the OJK threshold, and shareholders and directors pass the fit and proper test. In practice it is often cleaner to form a purpose-built entity from the start, since retrofitting an existing company's structure and documentation can take as long as starting fresh.
What business lines can an Indonesian financing company offer?
A licensed multifinance company can typically offer leasing (sewa guna usaha), factoring of receivables (anjak piutang), consumer financing for vehicles and goods, and in some cases sharia-compliant versions of these products. The specific activities permitted are stated in the business license itself, so the scope should be defined precisely in the business plan submitted to OJK.
What happens if the financing company fails the fit and proper test?
A failed fit and proper test on a shareholder or proposed director typically means that individual cannot hold that role in the company, which forces a restructuring of ownership or management before the application can proceed. This is why it is worth having shareholders and directors pre-screened informally before the formal OJK submission, since replacing someone after filing adds months to the process.
Structuring a financing company correctly from day one, including the entity, the shareholder chain and the residence permits for any foreign directors, is the kind of work that benefits from being planned together rather than handled by separate advisors who never speak to each other. If you are weighing this against a simpler investment structure first, our About page explains how we work with foreign founders setting up regulated and unregulated businesses in Indonesia, and our home page has an overview of the full range of legal and visa services we handle for foreign-owned companies here.