Financing the creativity in Indonesia | Allen & Overy LLP

As a part of the help given by the Authorities of Indonesia (the Authorities) for artistic financial system actors as mandated below Legislation No. 24 of 2019 on Artistic Financial system, the Authorities has issued Authorities Regulation No. 24 of 2022 on Artistic Financial system, which is able to come into pressure in 2023.

Underneath this authorities regulation, the Authorities supplies incentives for artistic financial system actors (eg musician, artists, designers and manufacturing homes) and introduces the artistic financial system financing. The artistic financial system financing permits artistic financial system actors to acquire financing from banks and monetary establishments based mostly on mental property-based financing schemes.

The financing schemes enable artistic financial system actors to encumber their mental property¹ to banks and monetary establishments for the aim of acquiring financing from these establishments. The encumbrance is allowed so long as (a) the mental property has been registered with the Ministry of Legislation and Human Rights (eg copyrights, emblems, patents and commerce secrets and techniques) below the framework of mental property legal guidelines and laws, and (b) the mental property has been correctly managed and/or the rights

over such mental property have been transferred to different events (eg royalty). The federal government laws affirm the place that banks and monetary establishments can take safety over the mental property (within the type of fiducia safety), contracts entered by artistic financial system actors (eg licence agreements) and/or assortment rights (eg royalties).

Entry to finance

Though Indonesian legislation has beforehand allowed house owners of mental property rights to encumber their rights within the type of fiducial safety (jaminan fidusia), this authorities regulation is meant particularly to extend artistic financial system actors’ entry to financing. With a purpose to receive artistic financial system financing from banks and monetary establishments, artistic financial system actors should submit a proposal to such banks and monetary establishments, have an mental property settlement (eg licence settlement or royalty settlement), and have a registration letter or mental property certificates with the Ministry of Legislation and Human Rights (ie the Directorate Normal of Mental Property).

Banks and monetary establishments are required to conduct verification over the enterprise and valuation over the mental property. The valuation over the mental property shall be undertaken by a public appraiser that’s

• registered with the Ministry of Finance and the Ministry of Tourism and Artistic Financial system, and (b) licensed as a public appraiser that may conduct a valuation over the mental property.

Additional, artistic financial system actors that receive financing from banks and monetary establishments have to register the mortgage to the Ministry of Tourism and Artistic Financial system.² It is usually attention-grabbing that the federal government regulation introduces the likelihood that artistic financial system actors can even receive assure amenities (fasilitas penjaminan) from credit score assure firms (perusahaan penjaminan) for the financing.

Apart from acquiring financing from banks and monetary establishments, the federal government regulation additionally permits artistic financial system actors to enter into another financing scheme within the type of peer-to-peer lending and securities providing

within the type of crowdfunding (urun dana). This different financing scheme follows the capital market legal guidelines and laws and is topic to prior approval by the Monetary Providers Authority.

Different incentives

The federal government regulation additional stipulates that there are two sorts of incentives, that are fiscal incentives and non-fiscal incentives, to be given to artistic financial system actors. The fiscal incentives shall be offered by the central authorities (tax, customs and tariff amenities) and regional authorities (native tax and retribution incentives). In the meantime, for the non-fiscal incentives, the federal government regulation stipulates a number of sorts of incentives, similar to easing the processes of enterprise licensing and registration utility for mental property.

Multi function go

Whereas the federal government regulation paves the best way for artistic financial system actors’ entry to finance from banks and monetary establishments, will probably be attention-grabbing to see the urge for food of stated banks and monetary establishments for this particular sort of financing and the financing price for anybody artwork challenge.

This scheme particularly evokes questions as to how the financial valuation of mental property works and the way banks and monetary establishments worth that mental
property as safety, equally to how they’ve been doing for different property.

As well as, it stays to be seen how this authorities regulation will match into the rise of digital artwork and know-how ie NFTs, that are at the moment the preferred method for younger Indonesian artists to advertise their artwork publicly.

However, this authorities regulation introduces numerous alternatives not only for artistic financial system actors and banks and monetary establishments but in addition for public buyers to take part within the progress of the artistic financial system by permitting public crowdfunding and peer-to-peer lending for artistic financial system actions.

_{¹ The federal government regulation broadly defines mental property and it contains any sorts of works in know-how, science, artwork, and literature.
² Nevertheless, the mechanism is but to be regulated below the federal government regulation and, presumably, this will likely be additional regulated below the implementing regulation issued by the Ministry of Tourism and Artistic Financial system}