On 22 December 2025, the Financial Services Authority (Otoritas Jasa Keuangan / “OJK”) has issued OJK Regulation No. 35 of 2025 (“OJK Regulation 35/2025”), which amended OJK Regulation 46 of 2024 on the Development and Strengthening of Financing Companies, Infrastructure Financing Companies, and Venture Capital Companies (“OJK Regulation 46/2024”). The changes aim to serve a better support by accommodating changes and developments to improve the playing field for the above companies in Indonesia.
- Impacts to Finance Companies
In general, Financing Companies regulation was previously set out under the OJK Regulation No. 47/POJK.05/2020 of 2020 on Business Licensing and Institutional Aspects of Finance company and Sharia Finance company (“OJK Regulation 47/2020”) and OJK Regulation No. 35/POJK.05/2018 of 2018 on the Organization of Business Activities on Financing Companies (“OJK Regulation 35/2018”), both as amended by OJK Regulation 46/2024. The regulation provided the governance framework for the business licensing aspect and business conducts of Financing Companies. Several key highlighted changes from the recently released OJK Regulation 35/2025 are as follows:
- Foreign ownership:
Foreign ownership in Finance Companies is now generally restricted to a maximum of 85% of the company’s paid-up capital, whether held directly or indirectly, save for the following circumstances: (i) where a Finance Company have obtained a business permit from OJK with a foreign ownership composition exceeding 85% prior to the issuance of OJK Regulation 35/2025, provided that there is no change in the ownership of the Finance Company, (ii) where the Finance Company is a publicly-listed company and trade its shares on the stock exchange, (iii) where the Finance Company requires additional capital from foreign shareholders in regards to their capitalization standards or liquidity problems which may disrupt the company’s business operation, subject to OJK’s approval of adjustment plan, and (iv) where the Finance Company is established to carry out activities in the electricity and/or shipping sectors.
- Change of ownership:
Previously, all changes to a Finance Company’s ownership structure were required to obtain approval from OJK. However, this requirement has now become less restrictive as the current regulation requires OJK’s prior approval only for acquisitions resulting in changes to the controlling shareholders (i.e. shareholders holding at least 25% or more of the issued shares with voting rights, or shareholders holding less than 25% but can be proven to control the company, whether directly or indirectly). Other normal structural changes for privately owned Financing Companies are now only subject to notification to OJK.
- Investment financing:
Investment Financing activities (financing of goods and services required for business activities, rehabilitation, modernization, expansion, or relocation of business location) must be carried out through physical face-to-face meetings. However, such requirement does not apply where: (i) the debtors is a micro, small, or medium enterprise, (ii) financing value does not exceed IDR 10 million, and (iii) the percentage of Investment Financing receivables without physical face-to-face meetings does not exceed 5% of the total financing receivables.
Investment Financing may be conducted through various methods, including financing lease, sale and leaseback, factoring (with / without recourse), and project or infrastructure financing
- Working Capital Financing Activities:
Prior to the issuance of OJK Regulation 35/2025, Working Capital Financing (financing for expenditures within a single business cycle of the debtor) in the form of Working Capital Facility and Multipurpose Financing through Cash Facilities, was subject to several prerequisites, including a requirement that the ratio of core capital to paid-up capital be at least 150%. Under the new regulation, this threshold has been reduced to a mere 50% ratio of core capital to paid-up capital.
In addition, the previous regulation also mandated such financing to be secured by collateral, including vehicles, machines, land, building, ships, and/or heavy equipment. The only exemption from collateral requirement applied to each debtor with a maximum amount of Cash Facilities of IDR 50 million. Presently, this provisions has been amended. Finance Companies with a core capital to paid up capital ratio exceeding 100% are no longer required to obtain collateral for Cash Facilities of up to IDR 100 million per debtor, provided that: (i) the debtor qualifies as a micro, small, or medium enterprise, (ii) the financing risks are covered by an insurance mechanism linked to credit or credit guarantee, and (iii) the financing receivables for business capital facilities that do not use collateral do not exceed 10% (ten percent) of the total financing receivables.
- Risk mitigation:
Under OJK Regulation 35/2025, Financing Companies may implement additional financing risk mitigation measures, in the form of assessing historical data of prospective debtors through the financial service information system (sistem layanan informasi keuangan) to consider the prospective debtor in obtaining financing distribution. Such assessment may include, among others, reviewing whether the prospective debtor has financing receivables classified as other than “current” provided such classification is not material,
assessing the debtor’s repayment capacity, and ensuring that the proposed financing aligned with the risk appetite of the Finance Company.
- Updates to Infrastructure Financing Companies
Previously, OJK Regulation 46/2024 did not further regulate risk mitigation methods for Infrastructure Finance Companies. In contract, through the enactment of OJK Regulation 35/2025, OJK has introduced additional provisions regarding the risk mitigation procedures for additional financing under Article 43E of OJK Regulation 35/2025. These provisions relate to the assessment of a prospective debtor’s historical data scoring as contained in the financial information services system.
An Infrastructure Finance Company may consider whether to grant financing to a prospective debtor by considering several factors, such as: (i) whether the prospective debtor has financing receivables classified as other than “current”, provided such classification is not material; (ii) whether the prospective debtor is known to have the ability to repay; and (iii) whether the proposed financing remains in line with the risk appetite of the company.
- Updates to Venture Capital Companies
Generally, provisions regarding Venture Capital Companies’ (Perusahaan Modal Ventura / “PMV”) licensing are governed under OJK Regulation No. 34 of 2015 on Business Licensing and Institution of Venture Capital Companies (“OJK Regulation 34/2015”), as amended by OJK Regulation 46/2024. Below are several of the key highlighted changes under OJK Regulation 35/2025:
- Foreign ownership:
Foreign ownership is now generally restricted to a maximum of 85% of company’s paid-up capital, whether held directly or indirectly. However, exemptions still apply in the case that: (i) where a PMV have obtained a business permit with a foreign ownership composition exceeding 85% prior to the issuance of OJK Regulation, and provided that there are no amendments to the shareholding composition of the PMV, (ii) where the PMV is a publicly-listed company whose shares are traded on the stock exchange, (iii) where the PMV requires additional capital from foreign shareholders in regards to the required gearing ratio, equity ratio to paid-up capital, or minimum capital, or liquidity problems which may disrupt the company’s business.
- Change of ownership:
Prior to OJK Regulation 35/2025, all changes to the PMV’s ownership structure were required to receive approval from OJK. Under the current regulation, this requirement has been relaxed as the current regulation requires OJK’s prior approval only for acquisitions resulting in changes to the controlling shareholders (i.e. shareholders holding at least 25% or more of the issued shares with voting rights, or shareholders holding less than 25% but can be proven to control the company, whether directly or indirectly). Other normal structural changes for privately owned PMVs are now subject only to notification to OJK.
Conclusion
OJK Regulation 35/2025 represents a regulatory refinement aimed at strengthening governance, improving flexibility, and enhancing risk management across Financing Companies, Infrastructure Finance Companies, and PMVs in Indonesia. By amending multiple prior regulations under a consolidated framework, OJK seeks to create a more adaptive and competitive regulatory environment while maintaining prudential oversight.
Key reforms include a general 85% cap on foreign ownership (subject to specific exemptions), a more streamlined approval process for ownership changes which requires OJK approval only for changes in controlling shareholders (other than normal structural changes for privately owned Financing Companies), and relaxed capital and collateral requirements for certain financing activities, particularly to those involving micro, small, and medium enterprises.
The regulation also introduces clearer risk mitigation mechanisms, allowing companies to rely on data from financial information system data when assessing prospective debtors. Overall, OJK Regulation 35/2025 balances market liberalization with strengthened risk supervision, aiming to improve access to financing, support business development, and enhance regulatory certainty within Indonesia’s financial services sector.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
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- Article I number 1 of OJK Regulation 35/2025.
- Article I number 2 of OJK Regulation 35/2025.
- Article I number 8 of OJK Regulation 35/2025.
- Article I number 9 of OJK Regulation 35/2025.
- Article I number 10 of OJK Regulation 35/2025.
- Article I number 15 of OJK Regulation 35/2025.
- Article I number 36 of OJK Regulation 35/2025.
- Article I number 38 of OJK Regulation 35/2025.
- Article I number 39 of OJK Regulation 35/2025.
