On 31 December 2018, the Financial Services Authority (“OJK”) issued OJK Regulation No. 37/ POJK.04/2018 on Equity Crowdfunding Services through an  Information Technology (Equity Crowdfunding) (“POJK 37/2018“). With an Equity Qrowdfunding services through an Information Technology (“Equity Crowdfunding”), early stage company is expected to contribute to the national economy by obtaining alternative funding based on information technologyThe company which has provided the crowdfunding service before 31 December 2018 must submit to OJK for a license as a Provider no later than six (6) months since 31 December 2018.

Equity Crowdfunding Services

POJK 37/2018 describes the activity of Equity Crowdfunding as part of financial services activity under the capital market sector. Nevertheless, every offering of shares by issuers through Equity Crowdfunding is not regarded as a public offering as described under Law No. 8 of 1995 about Capital Market  if :

  1. The offer of shares is conducted by a provider that has obtained license from OJK;
  2. The maximum offering period is not more than 12 months; and
  3. The total amount of funds collected through the offering is not more than Rp 10,000,000,000.- (ten billion Rupiah), unless determined otherwise by OJK.

Parties and Liability

Equity Crowdfunding services involve three main parties namely the provider, issuer and investor, as follows:


A provider must be a limited liability company (PT) or cooperative (Koperasi) having a minimum amount of capital of Rp 2,500,000,000.- (two billion and five hundred million Rupiah), where the provider provides, manages and operates the Equity Crowdfunding for the users. A security company (Perusahaan efek) may act as a Provider upon obtaining approval from the OJK and register as electronic system provider to Ministry of Communication and Information Technology.

In carrying out its business activities, the Provider is obliged to :

  1. conduct review on the issuer at least:
    • Issuer’s legality including the legalization of legal entities, company organs, legal aspect of capital addition, issuer restrictions, and license related to the issuer business activities or project that will be funded by the offer of shares through Equity Crowdfunding.
    • documents and/or information submitted by the issuer in the context of offering shares through Equity Crowdfunding
  2. maintain confidentiality, integrity and availability of personal data, transaction data, and financial data;
  3. use an escrow account to receive funds collected from the offering through Equity Crowdfunding;
  4. utilize a data center and disaster recovery center that are located in Indonesia;
  5. fulfil the minimum standard of information technology system, information technology safeguard, disruption and failure of the system and transfer of information technology system management;
  6. implement the basic principles of users’ protection, as follows: (a) transparency, (b) fair treatment, (c) reliability, (d) data confidentiality and security, and (e) simple, fast, and affordable Users’ dispute resolution through the functions of internal dispute resolution and external dispute resolution.
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Issuer is a limited liability company that offers the shares through Equity Crowdfunding. Issuer that offers shares through Equity Crowdfunding cannot be :

  1. companies that are controlled directly or indirectly by a business group or conglomerate;
  2. public companies or subsidiaries of public companies; and
  3. companies with total assets of more than Rp 10,000,000,000.- (ten billion Rupiah), excluding land and building assets.

The issuer must register the share ownership of the investors in the shareholders register and submit annual reports to OJK and announce to the public no later than 6 (six) months after the issuer’s financial year ends.

The annual report must contain information as stipulated in the limited liability company law and use of funds from the offering through Equity Crowdfunding.


Investor is the party that buys the shares through Equity Crowdfunding. The investors who can buy shares through Equity Crowdfunding must have the ability to buy shares, risk analysis capabilities and meet the criteria of investors. Criteria of investors is as follow:

  1. investors with income of up to Rp 500,000,000.- (five hundred million Rupiah) per year, may purchase shares through Equity Crowdfunding in a maximum value of 5% of their total income per year;
  2. investors with income of more than Rp 500,000,000.- (five hundred million Rupiah) per year, may purchase shares through Equity Crowdfunding in a maximum value of 10% of their total income per year.

The above criteria does not apply to investors who are legal entities or individual investors that have sufficient investment experience, proven by ownership of the securities account for at least 2 years before the offering of shares.

Equity Crowdfunding Service Agreement

There are two underlying agreements on Equity Crowdfunding namely:

  1. Agreement between provider and issuer:
    The agreement between the provider and the issuer is made in a notarial deed, the deed can be in the form of an electronic document drafted based on the laws and regulations. The agreement contains at least: (a) number, (b) date of agreement, (c) identity of the parties, (d) provisions regarding the rights and obligations of the parties, (e) the amount of funds to be collected and shares to be offered, (f) the amount of commission and related costs, (g) provisions regarding fines, (h) dispute resolution mechanisms, and (i) settlement mechanisms in the event that the Operator cannot continue its operational activities.
  2. Agreement between provider and investor:
    Can be in the form of a standard agreement drafted based on laws and regulations. The standard agreement used by the provider is prohibited to:
  1. declare the transfer of responsibility or obligation of the provider to the user; and
  2. stating that the user is subject to new regulations, additions, continuations and/or changes made unilaterally by the provider in the period the user utilizes the service.
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Procedure of Offering

The issuer can only conduct share offerings with 1 (one) provider at the same time. The maximum funding collection obtained through Equity Crowdfunding is maximum Rp 10,000,000,000.- (ten billion Rupiah) within a period of 12 months. Within that period, the offering can be made once or more than once. If the minimum target funding is not achieved during the offering period, the offering through Equity Crowdfunding will be void by law, and the provider must return all collected funds and benefits arising from the funds to the escrow account to the investors no later than 2 (two) working days after the offer is void by law.

Secondary Market

Provider may set up a system for the investors to trade the shares of the issuer through Equity Crowdfunding. The system may provide a fair market value as a point of reference to sellers and buyers, and provide a communication system for users that can be used to communicate between users. However, the trading can only be conducted between investors registered within the same provider.


OJK may impose administrative sanctions for violation of POJK No. 37/2018 in form of warning letters, fines, limitation of business activity, suspension of business, revocation of business license, cancellation of approval, and/or cancellation of registration.

Nicky Lim