Indonesia Issues New Rules for Foreign Finance Representative Offices

Jakartaweekly.com — Indonesia’s financial regulator Otoritas Jasa Keuangan (OJK) has issued a new regulation governing representative offices of foreign financial institutions operating in the country, aiming to strengthen cross-border financial cooperation while safeguarding the stability of Indonesia’s financial services sector.

The rule, OJK Regulation No. 41/2025, covers representative offices of foreign financing institutions, venture capital firms, and other financial service entities headquartered outside Indonesia.

According to OJK, the regulation responds to the growing integration of global economic and financial activities, which has increased demand for cross-border financing and collaboration.

The new framework provides legal clarity for the presence of foreign financial institutions’ representative offices in Indonesia while ensuring their activities remain under prudent, transparent, and accountable supervision.

Role of Representative Offices

Under the regulation, foreign financial institutions that do not have branches or subsidiaries in Indonesia can establish representative offices to facilitate communication and coordination with local partners.

These offices—referred to as Representative Offices of Financing and Financial Service Institutions (KPPVL)—serve primarily as liaison offices connecting foreign headquarters with businesses and clients in Indonesia.

Institutions covered by the regulation include financing companies, infrastructure financing firms, venture capital companies, pawnshops, peer-to-peer lending platforms, export-import financing institutions, and secondary housing finance companies.

Representative offices may conduct a number of activities in Indonesia, including:

• Providing information on procedures for working with their overseas headquarters or branches
• Assisting in monitoring financing projects located in Indonesia
• Supervising projects financed partly or fully by overseas headquarters
• Promoting the services of their parent institutions
• Acting as a liaison with Indonesian authorities and institutions
• Sharing publicly available economic, financial, and trade information about Indonesia
• Supporting Indonesian exporters in accessing international markets through global networks
• Encouraging foreign investment and financing for priority sectors and regional development projects
• Facilitating the handling of consumer complaints related to financing activities

However, to maintain financial stability and ensure fair competition with domestic institutions, representative offices are not allowed to directly conduct financing business in Indonesia.

Supporting International Investment

OJK expects the regulation to help attract greater international financing and capital participation for projects in priority sectors, while also expanding Indonesian exporters’ access to global markets.

To support implementation, OJK plans to hold a regulatory briefing and licensing assistance session for prospective applicants, aimed at accelerating permit approvals and improving transparency in the licensing process.

With the introduction of the new rule, OJK hopes foreign financial institution representative offices can contribute positively to Indonesia’s economic development while operating under a strong and accountable regulatory framework.