Minimum salary is the lowest amount of remuneration that employers have to pay their employees. This system is introduced in order to protect the rights of the employees. With this regulation, companies are obliged to pay their employees above the established standard. Practically every country has its own amount of minimum salary that rises from time to time. The same thing also applies in Indonesia. 

Several provinces in Indonesia have announced that their minimum salary is rising. On November 28th 2022, it was announced that the minimum salary in Jakarta will rise to IDR 4.901.798. This represents a 5,6% increase from 2021’s minimum salary which stood at IDR 4.641.854.  West Java’s increases by 7,88% to IDR 1.986.670, East Java’s increases by 7,86% to IDR 2.040.244, and Banten’s increases by 6,4% to IDR 2.661.280.

For the employees, this news would surely be a good news. As for the employers, there are several impacts that need to be considered due to the upsurge of minimum salary in Indonesia. 

1. Purchasing Power Increased

With the minimum salary in Jakarta increasing, it can be expected that the purchasing power will rise as well. According to the Indonesian Bureau of Statistics (BPS), household consumption accounts for 50,4% of Indonesia’s GDP. This proves that Indonesians love to spend their money to purchase goods. With the incoming salary increase, the increase of purchasing power becomes inevitable. If you own a company that produces goods. This could be an excellent momentum to attract more buyers. 

2. Product Prices Increased

When product manufacturers know that the people’s purchasing power is on the rise, they are also likely to increase their selling prices to maximize the momentum. This is another domino effect that could potentially happen after the minimum salary in Jakarta officially increases. However, you must be fully aware of the buying behavior of most Indonesian people. According to Rudianto (2014), 85% Indonesians prefer cheap products over expensive ones. You must take this into account when setting your prices. If you set it high, you could get high returns but if you set it under the average price, you could also have plenty of buyers for your product.

3. Employee Salary Appraisal

If your company is based in Jakarta, you must then comply with the upcoming increase of minimum salary. Specifically, you might have to make some adjustments on the salary of your employees. If some had lower salaries than the minimum amount, you shall increase it past the limit. This payroll adjustment is a decision that could potentially affect your company. When making the decision and conducting the technicalities, you should have an excellent HR team at your disposal. They will be the ones in charge of the new salary appraisal process and you could also get the finance team to re-check the numbers. 

NOTE:

• For general information about the provinces minimum salary (UMP) in Indonesia, you can access the Ministry of Labor Regulation Number 18 of 2022 here.
• For specific information about the minimum salary in Jakarta, you can access  the Governor’s Decree Number 1153 of 2022 here.

How can Double M help?

With the upcoming minimum salary increase, you might have to adjust your employees’ salary. With Double M’s help, you will be able to calculate and pay employee salaries while complying with the regulations. 

Recruitment agency is a firm that acts as an intermediary between the employer and prospective new employees. In this day and age, the usage of external recruitment agencies has become a common norm. This is because recruitment agencies typically offer a large database filled with the best talent pool for all your recruitment needs. That being said, choosing the right recruitment agency is no easy feat by any means. To help you out, here are the tips for choosing a recruitment agency in Indonesia. Here are the tips for choosing a recruitment agency in Indonesia.

Recruitment Agency in Indonesia

1. Specify your type

First and foremost, it is imperative for you to decide what type of recruitment agency you prefer. If you’re looking for full-time employees, a traditional recruiting agency would be suitable. For a temporary or contract workers, staffing agency is the viable option. If you’re looking for high-level, high-positioned executives, you better go with headhunting agencies. And finally, if you’re looking to fill a specialized role, a niche recruitment agency is the place to go.

2. Explain your hiring needs in detail

The next thing you must do is be super specific about your hiring needs. What role are you trying to hire for, what are the job descriptions, what are the responsibilities, what is the salary. These are just a few standard pieces of information that you should tell the recruitment agency about. Furthermore, you should also explain the company’s aim, values, and culture. These are essential in order to get the right person.

3. Due Diligence on the agency

Just like the usual employee recruitment process, you should also perform due diligence on the recruitment agency you’re about to choose. Look for information on their website, assess and carefully examine the reviews, and seek track records with companies they used to work with. If everything is up to par, it’s time to continue to advance to the next phase.

4. Observe the Standard Operating Procedure

If possible, it would be very great if you can visit the recruitment agency’s office and observe their work in person. Doing this will give you clearer insight on how they operate. You can specifically observe how they manage time and how they solve problems.

5. Confirm budget

Recruitment is an intricate process which plays a big role in a company’s operations. Therefore, it is no wonder that recruitment agencies charge substantial fees for you to use their service. If you feel like they have ticked all the boxes in your criteria, you should make sure that the fee they demand is still within your budget.

How can Double M help?

With the services of a recruitment agency, your company will be able to recruit the best talents available. Double M provides a recruitment service that can solve your hiring needs. Should you need tips for choosing a recruitment agency in Indonesia, please contact us.

Naturalization in Indonesia is a process where foreign citizens can earn a new status as Indonesian citizens because they have lived in Indonesia for a certain amount of years or go through a series of specific procedures. 

In Indonesia, naturalization increased in popularity after famous footballer Cristian Gonzales was naturalized as an Indonesian citizen in 2010. Over the years, not only footballers have followed suit but regular citizens as well. Here are the advantages of naturalization in Indonesia.

1. Protection from Deportation

There have been many cases where tourists or temporary visitors are deported from Indonesia because they committed crime. By being an Indonesian citizen, Indonesia will automatically be your country of origin. As a result, there shall be no possibility of a deportation for you. This does not mean you can do everything as you please without obeying the law. Should you commit a violation, the existing legal regulations will apply on you and consequences will occur .

2. Government Job Eligibility

In every job in the Indonesian government, the main requirement for potential applicants is that they must be an Indonesian citizen. You will be eligible to apply for a job in the Indonesian government by getting naturalized as an Indonesian citizen. One of the most known advantages of getting a government job is that you will receive a monthly pension money after you retire for the rest of your days. 

3. Ease to Travel

Upon the successful completion of your naturalization process, you will be eligible to apply for an Indonesian passport. Having an Indonesian passport is so beneficial since it will allow you to travel overseas as an Indonesian citizen. 

4. Right to Vote

As an Indonesian citizen, you will obtain the political right to vote in elections, either for city officials, legislative members, and Presidents/Vice Presidents. Electoral voting right is one of the most profound rights for an Indonesian citizen, allowing you to take part in a huge democratic event and play a part in the country’s political process. 

How can Double M help?

Naturalization as an Indonesian citizen could potentially bring you many advantages. With Double M’s help, you will be able to complete the procedures with no hassle.

When you expand your business in Indonesia, it is very likely that you will produce waste that harm the environment. The Indonesian government formulated a series of laws and regulations regarding waste management in Indonesia. As a business owner, it is important for you to know the in order to comply with the regulations. Here are the waste regulations in Indonesia.

1. Government Regulation Number 81 of 2012 on Management of Household Waste

This rule stipulates that every Indonesian citizen must reduce, reduce, and recycle their own waste using sustainable materials. Furthermore, this rule also regulates that companies and factories recycle their waste and make sure that all the materials in the production of their goods are from recyclable materials in its entirety. 

2.  Regulation of the Minister of Public Works of the Republic of Indonesia Number 3 of 2013 on Implementation of Waste Infrastructure and Facilities

As mentioned in its name, this rule specifically regulates the infrastructures and facilities of waste management in Indonesia, which consists of TPS, TPA, and TPS3R.

Tempat Penampungan Sementara (TPS), which is a temporary facility specifically designed to store waste before they are processed or recycled. TPS must have one important feature, which is a waste processing system that can classify and categorize the waste into at least 5 different types. This will help map out every kind of waste so that the process could be easier later on. Ideally, it would be much better if people already categorized their waste beforehand in order to help the TPS workers work more efficiently.

Tempat Pembuangan Akhir (TPA), which is a final facility to process waste into its final form and return it back to the environment in its new state. The types of waste that could enter this facility include household waste, household-like waste, and residue. 

Tempat Pengelolaan Sampah 3R (TPS3R), which is a waste processing facility with the concept of reduce, reuse, and recycle. In this facility, all the waste is collected, organized, reused, and recycled. Furthermore, the waste management processes on this facility include organic waste processing, non-organic waste processing, household and toxic hazardous waste processing, and residue waste processing. All the processed waste will then be transferred to TPA.

3. Presidential Regulation Number 97 of 2017 concerning National Policy and Strategy for the Management of Household Waste and Household-Like Waste

This regulation focuses on establishing a roadmap to Indonesia’s Waste-Free goal in 2025. The series of plans and programs intended to achieve this is named Jakstranas. It involves reducing a substantial number of household and household-like waste.  Furthermore, another key target of Jakstranas is to reduce 30% of waste from its original source and process 70% waste by 2025. Jakstranas is integrated and embedded into every long term development of the country and city governments, acting as a benchmark and point of reference in policymaking.

4. Government Regulation Number 101 of 2014 concerning Management of Hazardous and Toxic Waste

This rule specifically talks about Bahan Berbahaya dan Beracun (B3) or toxic and hazardous waste. Toxic waste is the type that is potentially harmful or fatal to living organisms who are exposed to them. Meanwhile, hazardous levels are also harmful albeit on a lower level than toxic waste. This rule explains the definition of each type and also emphasizes the fact that everyone who produces toxic and hazardous waste in their business operations has to manage, reduce, store, collect, and bury them. Those whose operations produce toxic and hazardous waste must first obtain an environmental permit.

5. Law of the Republic of Indonesia Number 8 of 2008 concerning Waste Management

This is one of the earliest iterations of a rule regulating waste management in Indonesia. This rule strongly reaffirms the Indonesian government’s commitment to the 3R policy (reduce, reuse, recycle).

Reduce is the act of decreasing the usage of materials that could potentially end up as a waste. Reuse is the act of continuously using the same objects for a long amount of time in order to stop purchasing new ones and creating waste. Recycle is the act of reprocessing waste and transforming them into something completely new and useful.

The goal of this rule is to improve the general health of Indonesian citizens, increase the quality of the environment, and turn waste into a beneficial resource. This rule also states that waste management is the responsibility of every Indonesian with no exception. 

How can Double M help?

Waste Management in Indonesia has a strict regulation. Double M strives to help our clients comply with all the key regulations in Indonesia. Should you have any inquiries, please contact us.

Visa Emergency Notice Indonesia – According to the Press Release number SPIMI/012/2022/03 issued by the Directorate General of Immigration, it was reported that their primary office was caught on fire at 10.49 a.m. on Thursday (8/12/12). As a result, there will be a delay in immigration services such as visa approval, living permit approval, and M-Passport. 

Due to this unforeseen circumstance, the entire building has now been evacuated. Immigration employees were permitted to go home and finish their work remotely. This may cause the delay in the services as most of the documents and resources are located in the office. 

For applicants currently using one of the Immigration services, you are advised to visit the www.imigrasi.go.id and @ditjen_imigrasi Instagram account in order to keep up with the latest information. For further information, you may contact the Public Relations Subcoordinator of the Indonesian Immigration Service, Mr. Achmad Nur Saleh at 0812-9126-2833 regarding the Visa Emergency Notice Indonesia.

How can Double M help?

In order to obtain a visa, you must go through the procedures at the Indonesian Immigration Service. With Double M’s help, you will be able to complete these procedures with no hassle.

Multiple Entry Visa in Indonesia – Acting Director General of Immigration Widodo Ekatjahjana officially conducted a trial for the reopening of Multiple Entry Visa (VKBP). This policy was stopped during the Covid-19 pandemic and was reintroduced for trial on Tuesday, (22/11/2022). The policy is mostly aimed for high level business people and potential investors with large capital, which could potentially support the economic recovery in Indonesia. 

It is important to note that you cannot use VKBP to work in Indonesia. Holders are permitted to enter Indonesian territory within 1 year with a stay period of 60 days for each entry, and VKBP holders can only enter and exit Indonesia from the Immigration Checkpoints (TPI) in the Riau Archipelago, but can travel to other Indonesian territories. 

Multiple Entry Visa Requirements

• Passport valid for 18 months at the minimum
• Application letter from the Sponsor
• Proof of having living expenses in an amount of at least USD 2,000 in the form of a checking account, savings book, or time deposit for the last 3 months
• Proof of return ticket/onward ticket
• Coloured photo with size of 4 x 6 cm (white background)

Additional Covid-19 Requirements

• Evidence of having received the full dose of the COVID-19 vaccine and a booster
• Proof of ownership of health insurance/travel insurance which includes health financing, and a statement of willingness to pay independently if affected by COVID-19 while in Indonesian Territory.
• Statement letter willing to comply with all applicable health protocols in Indonesia.

Multiple Entry Visa application procedures

1. Submission

VKBP applicants must have a sponsor in the form of a corporation or company in Indonesia.

2. Issuance of Visas

Upon successful submission and payment processes, The Directorate General of Immigration will issue the VKBP within 8 working days.

How can Double M help?

Obtaining a Multiple Entry Visa in Indonesia will help you conduct business in the country with ease. With Double M’s help, you will be able to complete the procedures with no hassle.

Distributor Agreement in Indonesia – Distributor Agreement :  Contracts between a distributor and manufacturer. They allow the distributor to sell, market, and profit from the sales of a manufacturer’s or wholesaler’s product in bulk. A distribution agreement typically uses the terms and conditions that address territories, exclusivity rights, reporting requirements, and more.

Basic points of a sole Distributor Agreement in Indonesia :

– ARTICLE 1 : GENERAL

Company agrees to represent PRINCIPAL in the activities of selling trading goods provided by the PRINCIPAL, in which the product is one of the trading goods owned by the PRINCIPAL. COMPANY acts as the Sole Agent / Distributor in all types of transactions that occur in Indonesia in accordance with the agreement of the parties.

– ARTICLE 2 : TERM OF AGREEMENT

In this article, the period of this agreement between COMPANY and PRINCIPAL is determined and may or may not be automatically extended in the absence of notice, as well as the terms and conditions for terminating this agreement.

– ARTICLE 3 : PRODUCT AND SALES AGENT / DISTRIBUTOR FEE

COMPANY is entitled to obtain a special price for sales performed in Territory and in accordance to values invoiced by PRINCIPAL to COMPANY as to determine the variable of commission for COMPANY and the detailing of the total price is determined from the effective amount received by the consumer.

– ARTICLE 4 : TERMS OF PAYMENT

Payment is performed by COMPANY in the term according to the issued payment invoice by PRINCIPAL, that is specified, payment is performed within 60 (sixty) days after the bill lading date.

– ARTICLE 5 : TRANSPARENCY

COMPANY will provide full transparency on all sales-related activities for the Products owned by PRINCIPAL in the Territory. The PRINCIPAL will perform full transparency upon the appointment of Distributor for COMPANY and shall not undermine the purposes and provisions of this Agreement.

– ARTICLE 6 : SOLE AGENT / DISTRIBUTOR ACTIVITIES

COMPANY will serve its role as Sole Agent / Distributor by performing promotional activities and sales to customers in Territory. All details of COMPANY as sole agent/distributor are also written in this agreement. 

– ARTICLE 7 : OBLIGATION OF THE PRINCIPAL

PRINCIPAL guarantees its obligation to provide knowledge and training as required for COMPANY as Sole Agent / Distributor.

– ARTICLE 8 : TAXATION

Both Parties are responsible for their own taxation obligations arising from this Agreement.

– ARTICLE 9 : MINIMUM SALES TARGET

In this article, the minimum sales target that must be met in accordance with what has been agreed by both parties is listed, it is also stated in this article the bonus that will be obtained by COMPANY if it reaches the minimum sales target and also listed the consequences if COMPANY does not meet the minimum sales target.

– ARTICLE 10 : ASSIGNMENT AND SUB AGREEMENTS

To ensure that neither Party may surrender, assign or transfer part or all of this Agreement, without the prior written express consent of the counterparty.

– ARTICLE 11 : GUARANTEE

Both Parties guarantee that each Party able to act based on Indonesia and its country’s governed law to conduct its line of business which is in accordance with the fulfillment of this Agreement, therefore Both Parties shall not be troubled by any party claiming to have prior rights there to, and therefore Both Parties are herewith relieved of all claims by other parties regarding such matters.

– ARTICLE 12 : CONFIDENTIALITY

Recipient of Confidential Information agrees to keep confidential all Confidential Information and not disclose or cause or permit the disclosure of the Confidential Information unless written acknowledgement is obtained  by the Disclosure.

– ARTICLE 13 : INTELLECTUAL PROPERTY RIGHTS

The Parties hereby acknowledge that all actions performed based on this Agreement do not imply any transfer of the Intellectual Property Rights between the Parties. Intellectual Property Rights owned by the Parties are, but not limited to, logo, naming, idea, strategy or any other forms with its relation in accordance with this Agreement. With no written consent by the Party owning Intellectual Property Rights, the other Party has no right to use, change or acknowledge it as its own and use it for its own account. 

– ARTICLE 14 : FORCE MAJEURE

In this article, it states a force majeure that can occur between the two parties, causing one party to be unable to carry out its obligations, then the suffering Party is obliged to notify the counterparty within 7 (seven) business days of said force majeure incident.

– ARTICLE 15 : INDEMNITY

COMPANY will not be liable for any damages suffered by PRINCIPAL (including but not limited to, profit loss, third party claims, damages) arising from this Agreement from breach of contract, tort, disadvantage, negligence or other form of actions performed by PRINCIPAL. Under no circumstances will COMPANY be deemed responsible for remedies amounting more than the Fee mutually agreed by the Parties of this Agreement. 

– ARTICLE 16 : SEVERABILITY

In case one or more provisions in this Agreement shall be declared null and void as required by the existing laws or by a decree of an authorized institution, thus such unenforceability or cancellation shall not prejudice or cancel other provisions in this Agreement, and therefore, the other provisions in this Agreement, shall remain valid and binding and enforceable as set forth herein.

– ARTICLE 17 : NOTICE

Any Agreement-related notice, deliveries, or written request and communication required, permitted or desired to be given, shall be deemed effectively given upon receipt and shall be personally delivered or delivered by express international courier.

– ARTICLE 18 : GOVERNED LAW AND DISPUTE RESOLUTION

Any unresolved issues or questions of interpretation arising in connection with this Agreement shall be settled by mutual agreement of the Parties hereto. If this is not possible, all dispute arising from this contract shall be binding and be finally settled under the administrative and procedural Rules of selected legal actions as determined by the parties.

How can Double M help?

Preparing and signing a Distributor Agreement in Indonesia is crucial before you begin your business operations. With Double M’s help,  will assist you through the entire process successfully.

Company Setup in Indonesia has gotten popular among foreign business owners in recent years. Most of investors consider Indonesia as a prime location for business expansion. As the fourth most populated country in the world, Indonesia has also risen as one of the strongest economies in Southeast Asia. As we recover from the Covid-19 pandemic, more foreign companies are being established in Indonesia. 

Company setup in Indonesia: Reasons why

There are several main reasons why company setup in Indonesia become popular. Firstly, the involvement of Indonesia in various trade agreements with other countries which enables the opportunity of fruitful partnerships and new business allies. Second, Indonesia’s economy is constantly rising, especially its internet economy, which has grown substantially. Third, Indonesia has an emerging middle class with high potential not only as workers but also as consumers of products and users of services,

With all the potential advantages of doing business in Indonesia, it’s no wonder that setting up a company in Indonesia sparks interest for many parties. Meanwhile, It is worth noting that the Indonesian government is fully supportive regarding foreign investments. However, there are regulations in effect that must be followed.

Things to Consider on Company Setup in Indonesia

Before setting up company in Indonesia, here are the most important things to consider:

1. Types of Company for Company Setup in Indonesia

There are several types of companies acknowledged by the laws in Indonesia:

1. Individual companies, this type could be an excellent option should you wish to be the sole owner. In a company of this form, you will have rights over all the revenues obtained by the company. However, you will also be responsible for all the risk and potential loss
2. Firm (Firma), this type of company puts a great emphasis on the active collaboration between the stakeholders. The main characteristic is that all stakeholders have equal responsibility in paying off company debts
3. Limited Partnership (Persekutuan Komanditer), this type of company offers more flexibility, specifically it allows a division of roles between an active partner that is in charge of all things related with the company and a passive partner which is only storing the capital.
4. Limited Liability Company (Perseroan Terbatas), this is the most common type of company for large businesses. For foreign companies, they will be under the name of PT PMA (Perseroan Terbatas Penanaman Modal Asing). As a type of company, it has a clearly defined structure and more secure terms. Other than PT, another common way taken by foreign companies is to simply establish a representative office in Indonesia.

2. Legal Documents

As a country adhering to law supremacy, an establishment of any company must be verified with the existence of legal documents. The process of setting up foreign companies in Indonesia requires plenty of documents, here are the key documents for a company setup in Indonesia:

• Deed of Establishment
• Business ID Number
• Tax ID Number
• Building Permit

3. Funding

Establishing a company, especially in a foreign country, may not cost you pennies. But in Indonesia, the minimum amount of paid-up capital for foreign companies stands at IDR 10 billion.

4. Market Research

Market Research is a process of determining the viability of a new product or service conducted with potential customers. Conducting market research is useful so that the company can discover the market demand, main competitors, export and import stats, distribution chain, and several other information.

5. Recruitment

Upon setting up your company in Indonesia, you will inevitably need employees to help with your day-to-day operations. With more than 200 million population, the country represents one of the largest talent pools you could imagine. Furthermore, the prediction is that in 2030, Indonesia will acquire a demographic bonus which means that the working-age population is significantly higher than the young people and the elderly. In theory, this could be super beneficial for companies, considering there will be more talents available at your disposal. Headhunter service and executive search service can be good options for this.

How can Double M help?

There are many things to consider for a Company Setup in Indonesia. However, with Double M’s help, we will be able to prepare legal documents, conduct market research and recruitment process that will help your company.

Brand Registration in Indonesia is one of the most important steps to elevate your brand’s value in Indonesia. A brand is defined as a name, term, design, symbol or any other feature that differentiates one seller’s products or services from those owned by other sellers. Having your own brand is crucial to build brand identity and make it recognizable to potential customers. 

In the modern era, the usage of branding directly affects the performances of a certain brand. Terms like brand communication or brand loyalty have emerged as important aspects when you are selling your products or services.

Before competing with hundreds of other brands, it is hugely important for you to register your brand in Indonesia. Brand registration in Indonesia is organized by the Directorate General of Intellectual Property Rights, which operates under the Ministry of Law and Human Rights.

Why You Should Register Brand in Indonesia:

1. Increase Business Value

In the digital era, more businesses are emerging. In a hugely saturated market, registering your brand makes it easier for your customers to recognize your products or services in a short amount of time. A registered brand can also be an intangible asset which could be valuable some time down the line. A strong, widely recognized brand will help increase the value of your business.

2. Legal Protection

Having brand registration in Indonesia gives you legal protection which applies according to the corresponding laws and regulations. First, it gives you exclusive rights to produce and distribute products and services under your brand. Should anyone ever attempt to use your brand without permission, you will be able to file a lawsuit for trademark infringement

3. Brand Recognition

Registering your brand legally is the first step towards building brand awareness and eventually developing brand loyalty. If your potential customers can easily identify your brand, it will be easier for you to generate revenue. Furthermore, registering your brand also grants you the right to use the ® symbol. You will obtain the ® symbol once you have successfully completed your brand registration or trademark registration procedures. Not only to your customer, the symbol will also help you obtain the trust from your potential partners because obtaining it increases your brand’s validity. 

How can Double M help?

Brand registration in Indonesia is important to elevate your brand’s value. Double M can help you complete the registration procedure efficiently.

Fintech Company in Indonesia has been thriving for quite sometime. Financial technology, commonly abbreviated as fintech, is a new form of technology that aims to disrupt the usage of traditional financial methods in providing financial services. Generally, there are four pillar areas of fintech: Artificial Intelligence, Blockchain, Cloud computing, and big data. Most people know Fintech in Indonesia for their usage of smartphone technology for mobile banking, investing, loan services, and cryptocurrency. In recent years, fintech companies are growing larger in Indonesia, both in numbers and revenues.

Reasons Why Fintech Company in Indonesia is Thriving

Here are 5 reasons why fintech company in Indonesia is thriving:

1. High Demographic, High Internet Usage, Low Bank Usage

With a population almost reaching the figure of 280 million, Indonesia is the fourth most populous country in the world. Around 204 million, or 70% percent of the population are active internet users. Considering the fact that fintech is internet-based, it makes Indonesia such a fertile market for these enterprises to invest in.

During the peak of the Covid-19 pandemic in 2020, about 129 million Indonesian used e-commerce and conducted transactions which amounted to IDR 266 trillion in total transaction value. As the most popular form of online payment these days, fintech companies are reaping the benefits of this upwards trend.

According to the e-Conomy SEA Report conducted by Google, Temasek, and Bain & Company, it was stated that 92 million Indonesians are unbanked, meaning they do not have any bank account at all, while 47 million are underbanked, meaning that they have a bank account but do not have access to credit cards as form of payment. This is an enormous opportunity for fintech companies that provide internet banking and digital payment services. 

2. Government Support

Law and regulation compliance often become a tricky obstacle in the financial sector. Strict laws and regulations are there to protect the consumers. In Indonesia, the government realizes the needs for an inclusive financial system. That is precisely why every fintech in Indonesia operates under the license, authorization, and guidance from the OJK (Financial Services Authorities). The Minister of Finance, Sri Mulyani also reaffirmed the intent of the Indonesian government to support the optimization of fintech company in Indonesia. Apart from easing regulations, the Indonesian government also collaborates alongside fintechs for the distribution and sales of Surat Berharga Negara (National Securities). The government also struck a deal with fintech companies to distribute cash relief for at-risk citizens during the peak of the Covid-19 pandemic.

3. Huge Investment

Investment is an instrumental factor for the success of a company, and fintech company in Indonesia is no exception. According to Statista, global fintech financing went from USD 59.2 billion and almost quadrupled to USD 320.2 billion in 2021. This upward trajectory is also evident in Indonesia which is constantly rising. In 2018 there were 46 fintech financing being done with a total valuation of USD 300 million.

A year after, the number of deals increased to 65 with a total valuation of USD 700 million. In 2020, the number of deals went down to 57 with a total valuation of USD 500 million, this could be seen as the impact of the Covid-19 pandemic.

After the temporary downfall, the numbers substantially increased to 97 deals worth USD 1.6 billion in 2021, tripling the previous numbers. Throughout the first half of 2022, the number of deals went down to 51 but the total valuation increased to USD 1.8 billion. This constant growth in investment shows the confidence of the market to the Indonesian fintech ecosystem. As Indonesia progresses closer in its quest to become one of the world’s biggest internet economies, fintech company in Indonesia will reportedly continue to prosper and excel.

4. SMEs

The Conversation suggests that there are more than 60 million SMEs in Indonesia. They contribute to 60% of the country’s economy and absorb 97% of the workforce. This shows that SMEs are one of the linchpins of the country’s economy, However, only 12% of them were able to get financing or bank loans. The Covid-19 pandemic made the situation worse, considering approximately 50% or 30 million SMEs were closing because demands are diminishing. This becomes a huge opportunity for fintech company in Indonesia, especially for those operating in loan services/P2P lending. With millions of SMEs looking to bounce back, the fintech ecosystem will be back to its absolute peak.

How can Double M help?

Fintech company in Indonesia play a huge part in Indonesia’s economy. Double M can help you establish your own fintech company or link you with existing fintech company for business matchmaking.