Legal Regulation of Venture Capital in Indonesia and Its Impact on the Indonesian Economy

Indonesia's rapidly growing economy has given rise to numerous digital startups that have become regional and international technology giants. However, the presence of Venture Capital Companies (PMV) as a crucial element in the digital startup ecosystem is often overlooked. PMV plays a significant role in maximizing Indonesia's digital economy growth through high-risk and non-bank financing. PMV's financing involves direct equity participation in the financed companies and often includes management involvement through joint ventures. This article discusses the current legal position of PMV based on POJK No. 25 of 2023, the increase in registered PMV, norms for investment and financing, and tax incentives. Despite the numerous PMV in Indonesia, with 54 licensed companies by November 2023, public and small business understanding of PMV remains minimal due to insufficient government outreach. Therefore, this study formulates issues regarding the regulation of PMV as a financing institution and the legal protection for PMV in conducting their business activities in Indonesia.