11 March, 2016
The Indonesian Financial Services Authority (OJK) has recently released new regulations on the establishment of Venture Capital Companies. The new regulations make this an attractive vehicle for investing growth capital in businesses from the start-up through micro, small and medium phases, as well as new technology businesses, particularly where these are subject to foreign ownership restrictions. A new purpose clause also opens up the possibility of using this for distressed take-overs and assisting buyouts.
The Venture Capital Company has a significant strategic advantage of being able to invest as a domestic Indonesian company while being capable of 85 per cent foreign ownership. Under the new regulations, a Venture Capital Company may also act as fund manager and set up separate Venture Capital Funds using the Indonesian mutual fund structure. This could greatly facilitate investments into start-up companies which are closed under the negative list.
We believe the new regulations show that OJK is very serious about the Venture Capital industry, and think that the Venture Capital Company and Venture Capital Funds merit serious consideration as a vehicle for Indonesian investment.
We are analysing the new regulations in detail and will publish a more detailed alert shortly.
For further information, please contact:
Joel Hogarth, Partner, Ashurst
joel.hogarth@ashurst.com
