Financial Crime World

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Indonesian Regulations for Fintech Businesses

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1. Licensing

Fintech businesses operating in Indonesia must obtain a license from the Financial Services Authority (OJK) to operate. The scope of IT Fintech Business License includes activities such as payment processing, e-money issuance, and crowdfunding.

Key Points:

  • Obtain an IT Fintech Business License from OJK
  • Scope of license includes payment processing, e-money issuance, and crowdfunding

2. Regulatory Hurdles

Fintech businesses in Indonesia must comply with various regulations, including those related to data protection, anti-money laundering, and consumer protection. Businesses must also comply with the requirements of the Financial Services Authority (OJK) and the Ministry of Communications and Information Technology (Kominfo).

Key Points:

  • Compliance with data protection, AML, and consumer protection regulations
  • Compliance with OJK and Kominfo requirements

3. Data Privacy Laws

The Personal Data Protection Law (P2SK Law) regulates the handling and processing of personal data in Indonesia. Fintech businesses are required to obtain consent from customers before collecting, storing, or using their personal data.

Key Points:

  • Compliance with P2SK Law on personal data protection
  • Obtain customer consent for collecting, storing, or using personal data

4. Cyber Security Laws

There is no specific regulation on cybersecurity in Indonesia, but fintech businesses must comply with general data protection laws. The Ministry of Communications and Information Technology (Kominfo) has issued a circular letter on AI ethics, which sets out general requirements and limitations for AI.

Key Points:

  • Compliance with general data protection laws
  • Kominfo’s guidelines on AI ethics

5. Employment Benefits

Fintech businesses in Indonesia are required to provide minimum employment benefits, including break time, annual work leave, and social security enrollment. Employees have the right to choose their workplace and receive severance packages upon termination of employment.

Key Points:

  • Provision of minimum employment benefits (break time, annual work leave, etc.)
  • Right to choose workplace and receive severance package upon termination

6. Accessing Talent

Fintech businesses can hire expatriates subject to approval from the Ministry of Manpower for a period of up to three months. The employer must fulfill all the workers’ rights as stipulated in the prevailing laws and regulations, including the payment of severance packages upon termination.

Key Points:

  • Hiring expatriates with Ministry of Manpower approval
  • Fulfillment of worker’s rights, including severance package payment