The Indonesian Government recently enacted Government Regulation No. 24 of 2022 on the implementing regulation to the Creative Economy Law. The regulation promotes intellectual property ("IP") assets as security objects that can be used to obtain bank and non-bank financing. Previously, the Creative Economy Law (Law No. 24 of 2019) stipulated that the Government would facilitate an IP financing scheme for creative economy entrepreneurs and allow them to develop a marketing system for IP-based products.
The purpose of this regulation is to encourage the use of IP (which is frequently the only or primary asset in the creative economy industry) as a valuable, and hence acceptable, form of security for financial or loan transactions. However, there are still issues with its implementation. The Directorate General of Intellectual Property, which is responsible for recording and registering ownership over IP assets, has not begun accepting registration of IP assets as security, and the regulation itself does not detail the enforcement of encumbered IPs. Therefore, it is possible that the enforcement of encumbered IPs will continue to be a barrier for lenders.
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