{"id":148056,"date":"2026-09-08T08:53:12","date_gmt":"2026-09-08T08:53:12","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=148056"},"modified":"2026-09-08T08:53:12","modified_gmt":"2026-09-08T08:53:12","slug":"indonesia-alternative-investment-funds","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/indonesia-alternative-investment-funds\/","title":{"rendered":"Indonesia: Alternative Investment Funds"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-148056","comparative_guide","type-comparative_guide","status-publish","hentry","guides-alternative-investment-funds","jurisdictions-indonesia"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Maja Legal<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/08\/03.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Maja Legal<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/08\/03.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Alternative Investment Funds laws and regulations applicable in Indonesia<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the principal legal structures used for Alternative Investment Funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Indonesia does not have a single Alternative Investment Funds (\u201cAIF\u201d) law comparable to the EU\u2019s AIFMD. Instead, AIF-type investment vehicles are implemented through various Collective Investment Contracts based (Kontrak Investasi Kolektif -\u201cKIK\u201d) and, in certain cases, corporate structures, each subject to its own Financial Services Authority (Otoritas Jasa Keuangan -\u201cOJK\u201d) regulatory framework.<\/p>\n<p>The principal legal structures used for AIF-type strategies are:<\/p>\n<p>1. Limited Participation Mutual Fund (Reksa Dana Penyertaan Terbatas-&#8220;RDPT&#8221;)<\/p>\n<p style=\"padding-left: 40px\">a) RDPT is a KIK structure under which funds are raised from Professional Investors and invested by Manager in securities portfolios based on real-sector activities<\/p>\n<p style=\"padding-left: 40px\">b) Use case: Commonly used for private equity, private credit and other private-fund strategies targeting professional investors.<\/p>\n<p>2. Infrastructure Investment Fund (Dana Investasi Infrastruktur -&#8220;DINFRA&#8221;)<\/p>\n<p style=\"padding-left: 40px\">a) DINFRA is a KIK structure primarily investing in infrastructure assets.<\/p>\n<p style=\"padding-left: 40px\">b) Use case: Infrastructure-focused alternative investment, particularly for long-term infrastructure financing.<\/p>\n<p>3. Real Estate Investment Fund (Dana Investasi Real Estat -&#8220;DIRE&#8221;)<\/p>\n<p style=\"padding-left: 40px\">a) DIRE is a KIK structure investing in real estate assets, real estate-related assets and\/or cash and cash equivalents.<\/p>\n<p style=\"padding-left: 40px\">b) Use case: Real estate-focused alternative investment, broadly comparable to a REIT-type structure.<\/p>\n<p>4. Multi-Asset Investment Fund (Dana Investasi Multi Aset- &#8220;DIMA&#8221;)<\/p>\n<p style=\"padding-left: 40px\">a) DIMA is a KIK structure designed for specific or qualified investors and may invest in both securities and non-securities assets.<\/p>\n<p style=\"padding-left: 40px\">b) Use case: Flexible multi-asset alternative investment vehicle for qualified investors.<\/p>\n<p>5. Venture Capital (Modal Ventura)<\/p>\n<p style=\"padding-left: 40px\">a) Venture Capital (Modal Ventura) is a financing and investment vehicle operated by a Venture Capital Company (Perusahaan Modal Ventura) (\u201cVC\u201d) through equity participation and\/or term financing in non-listed portfolio companies.<\/p>\n<p style=\"padding-left: 40px\">b) Use case: Venture capital and private equity-style investment, particularly for productive business development and growth-stage companies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does a structure provide limited liability to the investors? If so, how is this achieved?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. For <strong>KIK-based funds<\/strong>, investors hold participation units rather than shares in a legal entity, and their exposure is generally limited to the value of their investment. Fund assets are held by the Custodian Bank separately from the assets of the Investment Manager and the Custodian Bank and are protected from claims by the Custodian Bank\u2019s creditors.<\/p>\n<p>For <strong>VC<\/strong>, limited liability arises from the corporate structure. Shareholders are generally liable only up to the amount of their capital contribution, subject to the usual exceptions, including circumstances that may justify piercing the corporate veil.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a market preference and\/or most preferred structure? Does it depend on asset class or investment strategy?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Investor preferences generally depend on the investment strategy, underlying asset class and target investor base. In the Indonesian market, RDPT and DIMA are among the more commonly used AIF structures, particularly for private and multi-asset investment strategies. The appropriate structure ultimately depends on the nature of the underlying assets and the investment objectives of the investors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the regulatory regime distinguish between open-ended and closed-ended Alternative Investment Funds (or otherwise differentiate between different types of funds or strategies (e.g. private equity vs. hedge)) and, if so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The Indonesian regulatory framework distinguishes between types of AIFs, primarily based on their redemption mechanics, investment strategy and underlying asset class<strong>.<\/strong><\/p>\n<p>For example, RDPT and Venture Capital are generally closed-ended, with returns realised through an exit rather than periodic redemption. DIRE may be structured as either open-ended or closed-ended, with its status required to be disclosed in the relevant disclosure documents under Article 42(d)(3) of No. 64\/POJK.04\/2017 (\u201c<strong>POJK 64\/2017<\/strong>\u201d)<\/p>\n<p>The regulations also differentiate funds by investment strategy and asset class: RDPT focuses on real-sector securities; DIMA permits a broader range of securities and non-securities assets; DINFRA focuses on infrastructure; DIRE on real estate; and Venture Capital on equity participation and\/or term financing in non-listed companies. Thus, while Indonesia does not specifically categorise funds as \u201cprivate equity\u201d or \u201chedge funds\u201d, different regulatory regimes apply depending on the fund\u2019s structure, strategy and underlying assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any limits on the manager\u2019s ability to restrict redemptions? What factors determine the degree of liquidity that a manager offers investors of an Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For open-ended funds, redemptions may be suspended or restricted only in circumstances permitted by law, including market closures, suspension of trading in material portfolio assets, emergency circumstances or other circumstances permitted by the OJK, pursuant to Articles 19, 20 and 29B of the Capital Market Law (Law No. 8\/1995, as amended by Law No. 4\/2023).<\/p>\n<p>By contrast, RDPT is closed-ended and does not provide investors with a redemption right. VC investments are similarly generally structured as closed-ended investments, with investor liquidity primarily achieved through the agreed exit strategy rather than redemption.<\/p>\n<p>The degree of liquidity offered to investors generally depends on (i) the liquidity of the underlying assets, (ii) the open- or closed-ended nature of the fund, (iii) the applicable redemption terms, and (iv) the Investment Manager\u2019s liquidity risk management arrangements. For exchange-traded products, secondary-market liquidity and the role of Authorised Participants may also be relevant.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are potential tools that a manager may use to manage illiquidity risks regarding the portfolio of its Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For closed-ended funds such as RDPT, the principal mechanism is an appropriate exit strategy, which must be disclosed in the fund\u2019s offering documents pursuant to the Explanation of Article 26(1)(x) of \u00a0POJK No. 34\/POJK.04\/2019<strong> (\u2018\u2019POJK 34\/2019\u201d)<\/strong>. POJK 34\/ 2019.<\/p>\n<p>Other mechanisms may include suspension of redemptions where permitted under applicable regulations, including in certain emergency circumstances or where NAV cannot be properly calculated, and portfolio enhancement arrangements, such as guarantees or priority rights over cash flows in financial asset structures under Article 2(2)(7) of POJK 65\/2017. For exchange-traded products, Authorised Participants may also support secondary-market liquidity by providing continuous bid and ask quotations pursuant to Article 28 of POJK 2\/2026.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on transfers of investors\u2019 interests?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. For RDPT, DIRE, DINFRA, and DIMA the Investment Manager must establish procedures for the transfer of participation that shall be stipulated in the relevant KIK.<\/p>\n<p>For RDPTs not offered through a public offering, transfers are restricted where they would result in the fund meeting the criteria for a public offering to the general public, pursuant to Article 6(8) of POJK 34\/ 2019.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any other limitations on a manager\u2019s ability to manage its funds (e.g., diversification requirements)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. The manager\u2019s ability are subject to portfolio composition and diversification requirements that vary by AIF type. DIRE must invest at least 80% of its NAV in real estate assets under Article 13(1) of POJK 64\/ 2017, while DINFRA must allocate at least 51% of its NAV to infrastructure assets under Article 15(1) of POJK No. 52\/POJK.04\/2017. For RDPT, deposits with any single commercial bank are limited to 10% of NAV under Article 14(2) of POJK 34\/ 2019. DIMA managers must also maintain adequate diversification across securities and non-securities investments pursuant to Article 10(a) of POJK No. 4\/POJK.04\/2017.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the local tax treatment of (a) resident, (b) non-resident, (c) pension fund and (d) sovereign wealth fund investors (or any other common investor type) in Alternative Investment Funds? Does the tax status or preference of investors or the tax treatment of the target investments primarily dictate the structure of the Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Indonesia does not have a specific tax regime for investors in AIFs. In general, tax is imposed on the income derived by the investor from the AIF, with the applicable treatment depending primarily on the investor\u2019s tax status and the nature of the income.<\/p>\n<p>Resident investors are generally subject to Indonesian income tax on their worldwide income, while non-resident investors are generally taxed only on Indonesian-source income, typically through withholding tax at the applicable rate (generally 20%), subject to any applicable tax treaty.<\/p>\n<p>OJK-approved pension funds may benefit from specific tax exemptions in respect of certain contributions and investment income, subject to the applicable requirements. Sovereign wealth funds may be subject to specific tax treatment where provided under the applicable legislation, including the regime applicable to Indonesia Investment Authority (<em>Lembaga Pengelola Investasi<\/em>-\u201c<strong>LPI<\/strong>\u201d), which differs from that applicable to ordinary corporate investors.<\/p>\n<p>The applicable tax treatment must also be disclosed in the relevant fund prospectus or disclosure document. In practice, while the tax position of investors and the underlying investments may be relevant considerations, they do not by themselves determine the AIF structure. The structure is generally driven by the fund\u2019s investment strategy, underlying assets, investor profile and applicable regulatory requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rights do investors typically have and what restrictions are investors typically subject to with respect to the management or operations of the Alternative Investment Fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Investors are are generally entitled to evidence of their ownership of participation units and to receive information regarding the fund, subject to the applicable regulations and KIK. For RDPT, investors holding at least 10% of the outstanding participation units may request a general meeting, including to propose the replacement of the Investment Manager or Custodian Bank under Article 26 of POJK 34\/2019.<\/p>\n<p>Investors generally have no direct role in the day-to-day management of the fund. Their rights and voting powers are limited to those provided under the applicable regulations and the relevant KIK. Any additional restrictions are generally structure-specific and set out in the KIK, for example, RDPT\u2019s minimum investment may not be jointly owned by more than one party.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Where customization of Alternative Investment Funds is required by investors, what types of legal structures are most commonly used?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common structures for customised AIF strategies in Indonesia are Individual Portfolio Management for single-client mandates and KIK structures for pooled investments. Individual Portfolio Management is generally used where an investor requires a bespoke investment mandate, while KIK structures are used where multiple investors require a common but tailored investment strategy.<\/p>\n<p>Depending on the investment strategy, customised KIK structures may include RDPT for real-sector investments, DIMA for multi-asset strategies, DIRE for real estate investments, and DINFRA for infrastructure investments. The appropriate structure generally depends on the investor\u2019s objectives, risk profile and the nature of the underlying assets.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are managers or advisers to Alternative Investment Funds required to be licensed, authorised or regulated by a regulatory body?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Pursuant to Articles 30(1) and 34(1) of the Capital Market Law, managers and advisers conducting business in Indonesia are required to obtain a business licence from the OJK. In addition, the Manager must be established in the form of a company incorporated under the laws of Indonesia.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are Alternative Investment Funds themselves required to be licensed, authorised or regulated by a regulatory body?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. AIFs are subject to OJK regulation and must, depending on their structure and offering method, be registered, recorded or have their registration statement declared effective by the OJK before being offered or operated. This regulatory requirement is based on Article 5(b)(1) and (4) of the Capital Market Law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does the Alternative Investment Fund require a manager or advisor to be domiciled in the same jurisdiction as the Alternative Investment Fund itself?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, the manager and adviser of an Indonesian AIF must be domicile and licensed in Indonesia by the OJK. However, a local Manager may accept a delegation of individual portfolio management from a foreign Manager for the benefit of the foreign manager\u2019s clients, provided that the delegation is documented in a delegation agreement and complies with the applicable OJK requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there local residence or other local qualification or substance requirements for the Alternative Investment Fund and\/or the manager and\/or the advisor to the fund?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Both managers and advisers conducting business in Indonesia must be incorporated under Indonesian law and licensed by the OJK pursuant to Articles 30(1) and 34(1) of the Capital Market Law. Individuals managing AIFs must also hold the relevant OJK representative licence and satisfy the applicable qualification requirements.<\/p>\n<p>Certain AIF structures are additionally subject to local asset requirements. For example, RDPT, DIMA and DINFRA are subject to restrictions on investments in securities or infrastructure assets outside Indonesia, respectively. Fund assets must also be held by an OJK-approved Custodian Bank in Indonesia pursuant to Article 25(1) of the Capital Market Law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What service providers are required by applicable law and regulation?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>AIF is generally required to engage an Investment Manager and a Custodian Bank for investment management and custody of fund assets, respectively, pursuant to Articles 1(35) and 25(1) of the Capital Market Law.<\/p>\n<p>Additional service providers may be required depending on the AIF structure. RDPT, DIRE and DINFRA may require an Investment Committee and independent Appraisers registered with the OJK for the valuation of relevant assets under the applicable OJK regulations. AIFs may also require Capital Market Supporting Professionals, including Accountants, Legal Consultants and Notaries, for auditing, legal and documentation matters. For distribution, Investment Managers may engage OJK-licensed Mutual Fund Selling Agents, where applicable.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are local resident directors \/ trustees required?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, in accordance with Article 22 of POJK No. 5\/2026, The director of the Investment Manager must be domiciled in Indonesia and obtain the OJK\u2019s prior approval before appointment.<\/p>\n<p>Indonesia does not generally use a trustee structure for AIFs. Instead, fund assets are held and administered by a Custodian Bank separately from the Investment Manager\u2019s assets, which provides the relevant custody and oversight functions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What rules apply to foreign managers or advisers wishing to manage, advise, or otherwise operate funds domiciled in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>It must comply with the applicable OJK licensing requirements. In particular, manager must be established as a company incorporated under Indonesian law and obtain an OJK licence.<\/p>\n<p>A foreign Investment Manager may, however, delegate certain portfolio management functions to an OJK-licensed Indonesian Investment Manager under POJK No. 21\/2017, subject to a written delegation agreement and applicable requirements, including a minimum initial portfolio value of IDR 5 billion per client and custody of the client\u2019s assets in a segregated account with an Indonesian Custodian Bank.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the common enforcement risks that managers face with respect to the management of their Alternative Investment Funds?\u00a0<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Common enforcement risks include breaches of investment and portfolio management requirements, failure to comply with disclosure and reporting obligations, and negligence or misconduct in managing the fund. Investment Managers may be liable for losses resulting from their actions or negligence in the performance of their duties under the applicable OJK regulations.<\/p>\n<p>The OJK may also impose administrative sanctions for regulatory violations, ranging from written warnings and fines to restrictions or suspension of business activities and revocation of business licences or registrations. The applicable sanctions vary depending on the AIF structure and the nature of the violation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the typical level of management fee paid? Does it vary by asset type?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Management fees in Indonesia are generally negotiated and vary depending on the AIF structure, asset class, investment strategy, fund size and services provided. OJK does not prescribe a uniform management fee, although applicable fees must be disclosed in the relevant prospectus or disclosure document.<\/p>\n<p>As a general market indication, management fees are typically around 1\u20132.5% p.a. for RDPT and DIMA, 1\u20132% p.a. for DINFRA, and 1\u20132.5% p.a. for Venture Capital, with fees generally lower during the divestment period for closed-ended funds. Performance or carried-interest arrangements may also apply, particularly for private equity and venture capital strategies, and are generally subject to negotiation<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is a performance fee or carried interest typical? If so, does it commonly include a \u201chigh water mark\u201d, \u201churdle\u201d, \u201cwater-fall\u201d, \u201cpreferred return\u201d or other condition? If so, please explain.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Performance fees or carried interest may be used, particularly for private equity and venture capital structures. Indonesian law does not provide specific regulations on the mechanisms such as hurdles, preferred returns, waterfalls or high-water marks, these are generally contractual and negotiated, subject to applicable disclosure and regulatory requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are fee discounts \/ fee rebates or other economic benefits for initial investors typical in raising assets for new fund launches?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Fee discounts or rebates may be offered to initial or anchor investors, particularly through reduced management or performance fees, provided that they are properly disclosed, do not unfairly prejudice other investors, and are consistent with fairness and transparency principles. Such terms are generally negotiated contractually and may be documented through side letters.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are management fee \u201cbreak-points\u201d offered based on investment size?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes<strong>.<\/strong> While Indonesian regulations do not prescribe management fee break-points based on investment size, tiered or reduced fees may be agreed contractually, particularly for larger institutional or anchor investors. Any applicable fee structure must be properly disclosed in the relevant fund documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are first loss programs used as a source of capital (i.e., a managed account into which the manager contributes approximately 10-20% of the account balance and the remainder is furnished by the investor)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. First-loss programs, where the manager contributes a portion of the capital as a first-loss tranche, are not a typical or established AIF structure in Indonesia. In practice, alignment between managers and investors is more commonly achieved by the manager investing alongside investors in the fund or by linking part of the manager\u2019s remuneration to the fund\u2019s performance.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the typical terms of a seeding \/ acceleration program?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no standard statutory or market framework for seeding or acceleration programmes in Indonesia. Such arrangements are generally negotiated contractually with early or anchor investors and may include fee discounts, reduced performance fees, co-investment rights, preferential information or governance rights, and side letters. In certain infrastructure or development-finance transactions, concessional or first-loss capital may also be provided by government or development institutions.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What industry trends have recently developed regarding management fees and incentive\/performance fees or carried interest? In particular, are there industry norms between primary funds and secondary funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Management fees are generally becoming more competitive, particularly for larger institutional commitments, with greater use of tiered fee structures and reduced fees during the divestment period. The Indonesian AIF market remains primarily focused on primary<strong> funds<\/strong>, while dedicated secondary funds are still relatively limited.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restrictions are there on marketing Alternative Investment Funds?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes<strong>.<\/strong> Marketing restrictions depend on the AIF structure and whether the offering is public or non-public. Under the Explanation of Article 70 of the Capital Market Law, a Public Offering is generally triggered where securities are offered to more than 100 parties or sold to more than 50 parties, subject to the applicable value and time thresholds. Marketing through mass media may also trigger the public offering regime. A Public Offering requires an OJK Registration Statement to be declared effective before the offering.<\/p>\n<p>For non-public offerings, marketing must remain within the applicable thresholds and must not constitute a Public Offering. RDPT may only be offered to Professional Investors and is limited to 49 investors. DIMA is limited to specific or qualified investors, while DINFRA and DIRE may be publicly or privately offered, subject to their respective regulations. Venture Capital is generally privately or restrictively funded.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the concept of \u201cpre-marketing\u201d (or equivalent) recognised in your jurisdiction? If so, how has it been defined (by law and\/or practice)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No. The concept of \u201cpre-marketing\u201d for IAF is not formally or specifically regulated under Indonesian law. Marketing activities are instead subject to the applicable rules governing the relevant fund structure and the terms of the relevant KIK and offering documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can Alternative Investment Funds be marketed to retail investors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, for instance, under Article 6 of POJK 34\/2019, RDPT may only be offered to and purchased by professional investors, whether through a public or limited offering. RDPT may be marketed through an OJK-licensed <em>APERD<\/em>, provided that the offering is made only to Professional Investors and pursuant to a cooperation agreement between the APERD and the Investment Manager.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have a particular form of Alternative Investment Fund be that can be marketed to retail investors (e.g. a Long-Term Investment Fund or Non-UCITS Retail Scheme)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes. Indonesia utilizes DIRE and DINFRA as specific forms of Alternative Investment Funds that can be marketed to retail investors.<\/p>\n<p>These funds are established as KIKs between an OJK-licensed Investment Manager and a Custodian Bank. To be marketed to the general retail public, DIREs and DINFRAs must obtain an effective OJK Registration Statement and list their units on the Indonesia Stock Exchange (IDX). They are subject to retail-focused protection rules, including a mandatory distribution of at least 90% of their net income after tax to unitholders annually.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the minimum investor qualification requirements for an Alternative Investment Fund? Does this vary by asset class (e.g. hedge vs. private equity)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The minimum investor requirements vary by AIF structure and asset class. For RDP, each investor must be a professional investor and make a minimum investment of IDR 1 billion, corresponding to at least 1 million participation units. The minimum investment may not be jointly owned by more than one party.<\/p>\n<p>For DIMA, the minimum fund size is IDR 50 billion, with the fund available only to specific or qualified investors. Accordingly, investor qualification and minimum investment requirements depend on the applicable AIF structure and its regulatory framework.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there additional restrictions on marketing to government entities or similar investors (e.g. sovereign wealth funds) or pension funds or insurance company investors?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There are no additional marketing restrictions specifically applicable to government entities, sovereign wealth funds, pension funds or insurers. However, these investors are subject to their own investment and prudential restrictions, which may limit their ability to invest in certain AIFs.<\/p>\n<p>Pension funds are subject to OJK investment limits, including additional requirements for investments in higher-risk instruments such as RDPT and DINFRA under POJK 27\/2023. Insurers are similarly subject to investment, concentration and risk-based capital requirements. Government-related investors and sovereign wealth funds may also be subject to specific statutory and governance requirements applicable to their investments.<\/p>\n<p>Accordingly, these rules operate primarily as investor-side investment restrictions rather than restrictions on the marketing of AIFs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any restrictions on the use of intermediaries to assist in the fundraising process?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, Intermediaries assisting in the fundraising of AIFs must generally be licensed by the OJK and may only perform activities within the scope of their licence. For RDPT, an OJK-licensed APERD may market the fund only to Professional Investors, through direct meetings, letters or electronic media, and pursuant to a written cooperation agreement with the Investment Manager under Article 6(5) of POJK 34\/2019.<\/p>\n<p>For discretionary portfolio management mandates (KPD), an Investment Manager may also engage licensed APERDs, underwriters or broker-dealers to introduce or refer prospective clients, but the intermediary may not manage the portfolio. The relevant cooperation agreement must be submitted to the OJK within 10 business days of execution under POJK 21\/ 2017.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the use of \u201cside letters\u201d restricted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, they may generally be used as contractual supplements<strong>,<\/strong> provided that their terms are consistent with the applicable regulations and the fund\u2019s governing documents.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any disclosure requirements with respect to side letters?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, however, their terms remain subject to the Investment Manager\u2019s obligations to act honestly, fairly and in the best interests of investors, and to properly manage conflicts of interest under POJK 17\/2022.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common side letter terms? What industry trends have recently developed regarding side letter terms?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Public data on Indonesia-specific side letter practices is limited, as side letters are generally private contractual arrangements. There is no established Indonesian market standard, and terms are generally negotiated on an investor-by-investor basis.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">4032<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/148056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=148056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}