On 11 May 2018, the Ministry of Finance (MoF) issued regulation No. 48/PMK.010/2018 regarding Income Tax Implications on Investment of Venture Capital for Micro, Small and Medium Companies (PMK 48) replacing MoF Decision No. 250/KMK.04/1995 regarding Small and Medium Business Partners of Venture Capital Companies and Income Tax Implications on Investment of Venture Capital Companies (KMK 250), which has been revoked and is no longer in force.

The new issue stipulated in PMK 48 is that Micro, small and medium companies that are the business partners of venture capital companies shall be companies whose net sales per annum is not more than 50 billion, while KMK No. 250 formerly stipulated the net sales is not more than IDR 5 billion. Further, venture capital companies should obtain business licenses from the Financial Service Authority (‘OJK’).

In addition, one provision in the previous regulation (KMK 250) is deleted and no longer applicable, i.e. if a business partner company sells its shares in stock exchange, the venture capital company should sell its shares within 36 months from when the business partner company starts to sells its shares.