The Indonesian financial services authority (OJK) wants more venture capital (VC) firms that invest in the country to register locally, and is discussing plans to woo them to seek licences in the archipelago.
The regulator has met venture capital associations to discuss the feasibility of the plan, said Agusman, the executive head of multifinance, venture capital, micro financing firms, and other financial institutions at OJK.
“When we formulate a new venture capital regulation, attracting non-Indonesia-registered VCs to seek licences here will be considered,” he told reporters at a press conference on Friday.
Without divulging the details, Agusman said he expects the regulation to be released soon.
Eddy Danusaputro, chairman of the Association of Indonesian Venture Capital and Startups (AMVESINDO) said that most VC firms prefer to be registered in Singapore due to the lower taxes there. “Having an office in Singapore makes it easy for VCs to be close to the limited partners (LPs) and they will get foreign funding more easily,” he told DealStreetAsia.
However, he supports the OJK’s initiative of asking VCs to register in Indonesia as tracking VC activity helps to anticipate any vulnerabilities in the financial ecosystem.
AMVESINDO noted that there were 54 VC firms in Indonesia in 2022. They had total assets of 26 trillion rupiah ($1.7 b) in 2022, up 22% from 21.2 trillion rupiah ($21.38 b) in 2021.