🇮🇩 Indonesia · reviewed 2026-10-09
Franchise law and registration in Indonesia
Indonesia is one of three markets in our ASEAN comparator with franchise-specific rules, and they changed in 2024. Government Regulation 35/2024 decides who may franchise, what must be disclosed and who has to register, from the foreign franchisor down to each outlet.
The regulation
- Government Regulation (PP) 35/2024 on Franchising was issued and took effect on 2 September 2024 (State Gazette 2024 No. 188). It repealed PP 42/2007. Official · PP 35/2024, BPK JDIH, 2024-09-02
- A franchise must meet four criteria: a business system, a proven profitable business, intellectual property that is already registered or recorded, and continuing support to franchisees. A pending trademark application no longer counts. Official · PP 35/2024, BPK JDIH, 2024-09-02Secondary · Linklaters, 10 things on PP 35/2024, 2024-10-04
- 'Proven profitable' means at least three consecutive years of operation and the last two years of financial statements showing a profit, audited by a public accountant with an unqualified opinion. Micro and small businesses are exempt from the audit. Secondary · Linklaters, 10 things on PP 35/2024, 2024-10-04
Registration: the STPW
- Every franchisor, master franchisee, franchisee and sub-franchisee, including foreign franchisors and foreign master franchisees, must hold a Franchise Registration Certificate (STPW). Applications go through the OSS online licensing system. Secondary · Tilleke & Gibbins on PP 35/2024, 2024-10-01
- The Minister of Trade issues STPWs for franchisors; regional governments issue them for franchisees. Since Trade Minister Regulation 25/2025 took effect on 29 July 2025, if a regional government does not issue a franchisee's STPW within five working days of a complete application, the OSS receipt serves as temporary proof and the outlet may operate. Secondary · Tilleke & Gibbins on PP 35/2024, 2024-10-01Secondary · Trade Minister Reg. 25/2025, Hukumonline, 2025-06-29
- Franchise operators file an annual business-activity report to the Minister of Trade through OSS by 30 June. Domestic franchisors and franchisees display the official franchise logo at head office and every outlet. Secondary · Linklaters, 10 things on PP 35/2024, 2024-10-04
Disclosure
- The franchisor or master franchisee must give the prospective franchisee a prospectus in Bahasa Indonesia at least 14 calendar days before signing. It covers identity and legal standing, business history, organisation, the last two years of financial statements, the number of outlets, the franchisee list, both parties' rights and obligations, and IP registration certificates. Secondary · Linklaters, 10 things on PP 35/2024, 2024-10-04
Sanctions and local sourcing
- Sanctions are administrative only: up to two written warnings, then suspension of business for up to 14 days, then revocation of the STPW. The IDR 100 million fine of the old regime is gone. A party whose STPW is revoked cannot reapply for five years. Secondary · Tilleke & Gibbins on PP 35/2024, 2024-10-01
- There is no fixed local-content quota. Parties must prioritise domestically produced goods and services where they meet quality standards, and partner with micro, small and medium suppliers. Secondary · Linklaters, 10 things on PP 35/2024, 2024-10-04
More on Indonesia
Franchising in Indonesia: the 2027 guide for foreign franchisorsFranchising into Indonesia under PP 35/2024: STPW registration, the 14-day prospectus, foreign ownership, trademarks and royalty tax, with sources.Can foreigners own a business or franchise in Indonesia?Can a foreigner own 100% of a franchise business in Indonesia? The Positive Investment List, PT PMA capital under BKPM Reg. 5/2025, and structures.Trademarks and IP for franchisors in IndonesiaProtecting a franchise brand in Indonesia: first-to-file trademarks, licence recording with DGIP, and why PP 35/2024 needs a registered mark.Tax on royalties and franchise fees in IndonesiaIndonesian tax on franchise royalties paid abroad: 20% Article 26 withholding, treaty relief under PMK-112/2025, and VAT self-assessed by the franchisee.Finding a master franchisee in IndonesiaHow to find and vet a master franchisee in Indonesia: STPW duties for master franchisees, the prospectus they must give, and a vetting checklist.ASEAN franchise law comparatorSeven ASEAN markets side by side, from Vietnam to Singapore, with sources.