Fintech Laws and Regulations Report 2024 Indonesia

1.1        Please describe the types of fintech businesses that are active in your jurisdiction and the state of the development of the market, including in response to the COVID-19 pandemic and ESG (Environmental, Social and Governance) objectives.  Are there any notable fintech innovation trends of the past year within particular sub-sectors (e.g. payments, asset management, peer-to-peer lending or investment, insurance and blockchain applications)?

In general, the COVID-19 pandemic contributed to a significant increase in the number of fintech users and boosted the activity and success of fintech businesses in Indonesia, including those in the following sub-sectors:

1. E-money – most physical stores and restaurants (including some micro, small and medium enterprises (“MSMEs”)) accept digital payments.  The use of e-money services (and other payment services) has increased due to the boom in Quick Response Code Indonesia Standard (“QRIS”) features in many fintech applications.
2. Peer-to-Peer (“P2P”) Lending (including paylater services) – many small and medium-sized enterprises (“SMEs”) and individuals rely on P2P lending to support their businesses and/or their respective needs.  Unfortunately, this has also resulted in the emergence of illegal P2P lending companies in Indonesia, which caught the attention of various Indonesian institutions last year, including the Indonesian Financial Services Authority (Otoritas Jasa Keuangan or “OJK”), which have imposed corresponding sanctions on these activities.
3. Digital Banking – interest in Digital Banking services has increased recently, as evident from the number of acquisition and investment deals by fintech companies involving Indonesian banks during the past three years, including acquisition of Superbank by KakaoBank, Akulaku’s acquisition of Bank Neo, Kredivo’s acquisition of Bank Bisnis Internasional, Ajaib’s acquisition of certain shares in Bank Bumi Arta, and Astra International’s acquisition of Bank Jasa Jakarta in late 2023.  Further, it is also expected that Digital Banking will continue to rise along with the latest trend of collaboration between banks and non-bank institutions under the Banking-as-a-Service scheme.
4. Crypto Trading Applications – the use of Cryptocurrency (“Crypto”) Trading Applications in Indonesia became very popular in 2021, bolstered by the clearer regulations issued by the Commodities Trading Supervisory Agency (Badan Pengawas Perdagangan Berjangka Komoditi or “Bappebti”).  However, in 2023, activities related to digital financial assets, including Crypto assets and other digital financial services activities, are now under the authority of OJK and the Central Bank of Indonesia (Bank Indonesia or “BI”), as stipulated under Law No. 4 of 2023 on the Financial Sector Development and Reinforcement (“P2SK Law”).  In Indonesia, Crypto is acknowledged as an asset, and not a currency/mode of payment.  The P2SK Law mandates (i) the transfer of regulatory and supervisory duties to be completed within 24 months, and (ii) that the provisions regarding the transition must be stipulated in a Government Regulation within six months after the enactment of the P2SK Law.  However, the relevant Government Regulation has not been enacted yet.

1.2        Are there any types of fintech business that are at present prohibited or restricted in your jurisdiction (for example cryptocurrency-based businesses)?

Illegal P2P lending (pinjol ilegal) was a big phenomenon in Indonesia, especially in 2021 and 2022.  What was most concerning about this illegal activity was that even if an illegal P2P lending company had been blocked or blacklisted, it was still able to offer its products through an OJK registered aggregator application (i.e., a marketplace for financial-related products), which made it seem like it was a legitimate business.

In general, fintech businesses in Indonesia are either clearly regulated, within a “grey area”, or not specifically regulated at all.

For some types of Crypto-based business, certain limitations apply.  An example would be the business of Decentralised Finance (“DeFi”).  DeFi is not clearly regulated under Indonesian law.  However, as DeFi services are similar to highly regulated services in Indonesia – i.e., financial services – some of the general rules may be relevant or applicable, including:

1. DeFi services relating to payment transactions should be restricted in light of the restriction on using digital currency as a mode of payment in Indonesia.
2. DeFi services that provide savings, deposits, earnings and/or lending, and other services that provide benefits in the form of interest, may be considered a funding service (penghimpunan dana), which should only be carried out by a bank and may be subject to banking regulations.

2.1        Broadly, what types of funding are available for new and growing businesses in your jurisdiction (covering both equity and debt)?

Fundraising for companies can be carried out through both equity and debt.  Equity financing, convertible or exchangeable bonds, and initial public offerings (“IPO”) are all examples of types of funding available.  In practice, for fintech businesses, the most common form of financing is equity financing (which entails an increase of capital of the company to be subscribed to by investors in different series of shares).

A recent example of equity funding would be Privy, a universal identity enabler, which has just completed its Series C funding in December 2022 from Kohlberg Kravis Roberts & Co. L.P, an American global investment company.  Another example is Paper.id, an invoicing platform that also completed its Series B funding in December 2022 from a venture capital firm, Go-Ventures.

For certain fintech businesses that are in the early stage of development, funding is usually in the form of convertible or exchangeable bonds, which are converted or exchanged into shares of the company once certain milestones or requirements have been fulfilled.

For details on IPO of fintech companies in Indonesia, please refer to question 2.4 below.

2.2        Are there any special incentive schemes for investment in tech/fintech businesses, or in small/medium-sized businesses more generally, in your jurisdiction, e.g. tax incentive schemes for enterprise investment or venture capital investment?

In general, there are no special incentive schemes (such as tax incentives) for investments in fintech businesses and/or small/medium-sized businesses and their investors.

A general incentive scheme applicable to all businesses is the reduction of the final income tax rate in the amount of 0.5% for a certain period of time based on Government Regulation No. 55 of 2022 on Adjustment of Regulation in the Field of Income Tax (“GR 55/2022”).  This incentive scheme applies to taxpayers with a gross turnover of IDR 4.8 billion or less within one fiscal year.  Under GR 55/2022, the timeframe for this incentive scheme varies based on the form of the legal entity; for example, for a “company”, the incentive scheme is limited to only three years.

2.3        In brief, what conditions need to be satisfied for a business to IPO in your jurisdiction?

To conduct an IPO, a company must first submit a registration statement (pernyataan pendaftaran) with supporting documents (which includes a prospectus) to OJK.  It is important to note that, in order to be listed on the Indonesian Stock Exchange (Bursa Efek Indonesia) (“IDX”), a separate application to the IDX must also be made.

In November 2022, pursuant to Decree of Board of Directors of IDX No. Kep-00083/BEI/11-2022 on Regulation Number I-Y on the Listing of Shares and Equity Securities Other than Shares Issued by Listed Companies on the New Economic Board, the IDX introduced the New Economy Board (Papan Ekonomi Baru), which is on the same level and has same requirements as the Main Board.  However, in addition to such requirements, the companies must also: (i) have high revenue growth; (ii) use technology to create innovative products or services that increase productivity and economic growth and have broad social benefits; and (iii) be in a business field determined by the IDX, such as fintech and cyber security.

A few notable companies have recently moved from the Main Board to the New Economy Board, for example: (i) PT Global Digital Niaga Tbk., an e-commerce company; (ii) PT Bukalapak.com Tbk. (“BUKA”), a marketplace company; (iii) and PT GoTo Gojek Tokopedia Tbk. (“GOTO”), a holding company and digital platform provider.

2.4        Have there been any notable exits (sale of business or IPO) by the founders of fintech businesses in your jurisdiction?

Yes, such as: (i) PT Cashlez Worldwide Indonesia Tbk. (“CASH”), a company that provides cashless payment services, which conducted its IPO in 2020; (ii) BUKA, which conducted its IPO in 2021 (although BUKA is not a fintech company per se, it is provides some fintech products through its application in partnership with third-party fintech providers); and (iii) PT Kioson Komersial Indonesia Tbk. (“KIOS”), a partnership-based financial payment service provider company for MSMEs, which conducted its IPO in 2017.

Another notable example would be the IPO of GOTO in April 2022, which is a parent company of PT Dompet Karya Anak Bangsa (a member of the Indonesia Fintech Association (“AFTECH”)), which runs a payment system known as GoPay.

3.1        Please briefly describe the regulatory framework(s) for fintech businesses operating in your jurisdiction, and the type of fintech activities that are regulated.

Fintech businesses in Indonesia operate under the supervision of two main government institutions: OJK; and BI.  Another financial institution which was previously authorised for Crypto trading was Bappebti.  However, as mentioned above, the authority of Bappebti will be transferred to OJK under the P2SK Law.

Under Indonesian regulations, several types of fintech businesses are recognised and regulated, including, among others:

1. Securities Brokers (Perantara Pedagang Efek): regulated under OJK Regulation No. 20/POJK.04/2016 on the Licensing of Securities Companies That Conduct Business Activities as Underwriters and Securities Brokers (“POJK 20/2016”).  POJK 20/2016 stipulates that: (a) foreign shareholders who engage in financial services business activities but not in securities business activities can own up to 85% of the total issued and paid-up capital of the Securities Broker company; and (b) foreign shareholders who engage in securities business activities and have a Securities Broker licence in their jurisdiction can own up to 99% of the total issued and paid-up capital of the Securities Broker company.
2. Securities Crowdfunding Operators (Penyelenggara Layanan Urun Dana): regulated under OJK Regulation No. 57/POJK.04/2020 on Securities Offering Through Information Technology-Based Crowdfunding Service, as amended by OJK Regulation No. 16/POJK.04/2021 (“POJK 57/2020”).  POJK 57/2020 sets the maximum foreign ownership (whether direct or indirect) of Securities Crowdfunding Operators at 49%.
3. Payment Service Providers (Penyedia Jasa Pembayaran) (“PJPs”): PJPs are regulated under BI Regulation No. 23/6/PBI/2021 on Payment Service Providers (“BI Regulation 23/2021”).  A PJP licence can cover e-money, payment gateway, and remittance.  BI Regulation 23/2021 sets the maximum foreign ownership of PJPs at 85%, and foreign shareholders can only own up to 49% of the voting rights in PJPs.
4. P2P Lending: P2P lending (including paylater services) is regulated under OJK Regulation No. 10/POJK.05/2022 on Information Technology-Based Collective Funding Services as partially revoked by OJK Regulation No. 22 of 2023 on Consumer and Public Protection in Financial Services Sector (“POJK 10/2022”).  POJK 10/2022 sets the maximum foreign ownership (whether direct or indirect) of P2P-lending businesses at 85%.  Moreover, as an implementation of the supervisory and regulatory functions of OJK on the thriving P2P-lending industry in Indonesia, OJK has released OJK Circular Letter No. 19/SEOJK.06/2023 of 2023 on Organization of Information Technology-Based Collective Funding Services, which provides guidelines for both P2P lenders and customers regarding the provision, management and operation of P2P-lending business in Indonesia.
5. Digital Banks: regulated under OJK Regulation No. 12/POJK.03/2021 on Commercial Banks (“POJK 12/2021”).  POJK 12/2021 sets the maximum foreign ownership of Digital Banks at 99%. However, certain limitations on commercial bank ownership also apply.  Unless OJK approves otherwise, the maximum ownership percentages of a bank by the following entities are as follows: (a) 40% by bank or non-bank financial institutions; (b) 30% for non-financial institutions; and (c) 20% for individuals.
6. Aggregators: although aggregator activities are not specifically mentioned in OJK Regulation No. 13/POJK.02/2018 on Digital Financial Innovation in the Financial Services Sector (“POJK 13/2018”), OJK has established a special cluster under the Digital Financial Innovation sector in OJK for aggregators.
7. General Fintech Business: please note that Indonesia enacted the P2SK Law on 12 January 2023, which amends and supplements various regulations relating to fintech.  It is advisable for all fintech players in Indonesia to evaluate their businesses and make adjustments in accordance with the requirements under the law.

3.2        Is there any regulation in your jurisdiction specifically directed at cryptocurrencies or cryptoassets?

Indonesian regulations strictly forbid the use of Crypto as a mode of payment.  However, pursuant to Bappebti Regulation No. 8 of 2021 on Guidelines for the Implementation of Physical Market of Crypto Assets in Futures Exchange as amended by Bappebti Regulation No. 13 of 2022 (“Bappebti Regulation 8/2021”), it acknowledges Crypto as assets.

Bappebti Regulation 8/2021 also acknowledges parties within the industry such as:

1. Crypto Exchanges (Bursa Berjangka);
2. Futures Clearing Bodies (Lembaga Kliring Berjangka);
3. Crypto Asset Traders (Pedagang Fisik Aset Kripto); and
4. Crypto Asset Custodians (Pengelola Tempat Penyimpanan Aset Kripto).

In July 2023, Bappebti officially inaugurated the establishment of an Indonesian Crypto Exchange under the name of PT Bursa Komoditi Nusantara or Commodity Future Exchange (CFX) to manage Crypto asset exchange in Indonesia.  However, as the authority of Bappebti on Crypto will be transferred to OJK, it is currently uncertain how OJK will regulate Crypto trading in Indonesia.  In August 2023, OJK appointed new members to its Board of Commissioners, including the Chief Executive overseeing Financial Sector Technology Innovation, Digital Assets, and Crypto Assets Supervision.  Nevertheless, the transfer of authority from Bappebti to OJK is pending the Government Regulation ratification, with a targeted completion date of no later than January 2025.

3.3        Are financial regulators and policy-makers in your jurisdiction receptive to fintech innovation and technology-driven new entrants to regulated financial services markets, and if so how is this manifested?  Are there any regulatory ‘sandbox’ options for fintechs in your jurisdiction?

Indonesia is very receptive to the development of fintech companies and products.  This is evident by the large number of P2P-lending businesses that have been registered with OJK.  As at October 2023, there were at least 101 P2P-lending businesses registered with OJK.  To deal with the growing fintech industry, the Indonesian government has built a special department in OJK that supports innovation in the digital finance or fintech sector, namely the Digital Financial Innovation Group (“GIKD”), through POJK 13/2018.

With the existence of an institution that is directly in charge of the digital financial industry, GIKD and BI have each implemented a regulatory sandbox system or pilot programme for startups in the fintech sector.  Legal provisions related to the regulatory sandbox are regulated under OJK Circular Letter No. 21/SEOJK.02/2019 of 2019 on the Regulatory Sandbox.  Further, the P2SK Law also stipulates the establishment of the Technology Innovation in Financial Sector Department (Inovasi Teknologi Sektor Keuangan or “ITSK”), which will be under OJK and BI.  ITSK is essentially the main department that will have the authority over fintech business in Indonesia and GIKD will be under ITSK.  The scope of ITSK covers, among others, activities related to digital financial assets, including Crypto assets and other digital financial services activities.

3.4        What, if any, regulatory hurdles must fintech businesses (or financial services businesses offering fintech products and services) which are established outside your jurisdiction overcome in order to access new customers in your jurisdiction?

In general, fintech businesses established outside of Indonesia will need to comply with regulations such as: (i) Law No. 8 of 1999 on Consumer Protection, which regulates  the protection of customers in Indonesia; and (ii) Government Regulation No. 71 of 2019 on the Implementation of Electronic Systems and Transactions, which stipulates that applications that provide services in Indonesia must be registered with the Ministry of Communication and Informatics (“MoCI”) and obtain the Electronic System Provider Registration Certificate (Tanda Daftar Penyelenggara Sistem Elektronik or “TDPSE”).  Such fintech businesses must also take into account the role of the Satgas Waspada Investasi (a body comprising of several government institution representatives), which is to, among others, prevent and handle investment schemes that may be deemed illegal.

4.1        Does your jurisdiction regulate the collection/use/transmission of personal data, and if yes, what is the legal basis for such regulation and how does this apply to fintech businesses operating in your jurisdiction?

Yes, personal data processing, which includes the collection/use/transmission of personal data (“Personal Data Processing”), is broadly regulated under various Indonesian regulations, spread across administrative, electronic transaction and health sector regulations.  However, since the nature of fintech is to integrate financial services with technology, and as it is mainly conducted in the form of an electronic system (an online site, application or platform), fintech Personal Data Processing activity will primarily be related to the processing of electronic data or information.

With regard to Personal Data Processing, fintech businesses will be subject to the following main regulations: (i) Law No. 27 of 2022 on Personal Data Protection (“PDP Law”), (ii) Law No. 11 of 2008, as lastly amended by Law No. 1 of 2024 on Electronic Information and Transactions (“ITE Law”); (iii) Government Regulation No. 71 of 2019 on the Implementation of Electronic Systems and Transactions; (iv) MoCI Regulation No. 20 of 2016 on the Protection of Personal Data in Electronic Systems (“MoCI Regulation No. 20/2016”); and (v) MoCI Regulation No. 5 of 2020, as amended by MoCI Regulation No. 10 of 2021, on Electronic System Providers in the Private Sector.

4.2        Do your data privacy laws apply to organisations established outside of your jurisdiction?  Do your data privacy laws restrict international transfers of data?

Yes, Indonesian data privacy laws apply to all extra-territorial entities.  Under Article 2 of the ITE Law and PDP Law, everyone (including legal entities) must follow the said provisions, whether they are inside or outside of Indonesia.

In general, there should be no restriction in conducting cross-border data transmission.  Article 56 of the PDP Law stipulates that the personal data controller (pengendali data pribadi) should ensure that (i) the destination country has a data protection level that is either equal to or higher than what is regulated under the PDP Law, or (ii) if such condition in point (i) is not fulfilled, the personal data controller should ensure that the destination country has sufficient personal data protection, or (iii) if point (i) and (ii) are not fulfilled, the personal data controller should obtain the consent from the personal data owner.  Further, MoCI Regulation No. 20/2016 stipulates that a personal data owner should first approve the accuracy of its personal data and provide its written consent in the Indonesian-language consent form/document provided by the personal data controller.

4.3        Please briefly describe the sanctions that apply for failing to comply with your data privacy laws.

Failure to comply with data privacy-related laws may result in the imposition of administrative sanctions; namely, verbal or written reprimand, administrative fines, temporary suspension, blocking of access, removal from the list of registered electronic system providers, and/or online announcement on websites.

The imposition of the administrative sanctions does not eliminate any civil or criminal obligation and responsibility.

4.4        Does your jurisdiction have cyber security laws or regulations that may apply to fintech businesses operating in your jurisdiction?

As at the time of writing, there has been no Indonesian cyber security law that has been specifically enacted.  However, in order to support and protect stakeholders and users, various regulations relevant to each fintech business activity have imposed obligations, prohibitions, sanctions, and other standards or requirements, including in relation to the technical or system security of platforms.

4.5        Please describe any AML and other financial crime requirements that may apply to fintech businesses in your jurisdiction.

Fintech businesses operating in Indonesia must carry out AML and counter-terrorism financing measures through the Customer Due Diligence mechanism to prevent the use of applications for funding illegal activities.  Fintech businesses are required to identify, verify and monitor customers to ensure that the opening of accounts and transactions are in accordance with the profile, characteristic and/or transaction pattern of the prospective customer.  The verification must be carried out face to face or digitally with the prospective customer in order to validate his/her identity.  Moreover, fintech businesses are required to carry out an enhanced due diligence exercise towards high-risk customers and/or transactions originating from high-risk countries.  Such due diligence shall be carried out to assess the respective customer, its beneficial owner and the source of funds.

4.6        Are there any other regulatory regimes that may apply to fintech businesses operating in your jurisdiction (for example, AI)?

The main fintech-related regulations have already been covered.  However, as mentioned, Indonesia enacted the P2SK Law on 12 January 2023, and there should be a number of implementing regulations that will be issued in the course of this year.  The P2SK Law and its implementing regulations will definitely affect the regulatory regime for fintech businesses in Indonesia, and should be taken into consideration when undertaking fintech business in Indonesia.

Further, Indonesia has yet to enact regulations or policies regarding Artificial Intelligence (“AI”).  Currently, there is only MoCI Circular Letter No. 9 of 2023 on AI Ethics, which was enacted on December 2023, and it only stipulates general definitions, requirements, and limitations on AI.

5.1        In broad terms, what is the legal framework around the hiring and dismissal of staff in your jurisdiction?  Are there any particularly onerous requirements or restrictions that are frequently encountered by businesses?

Provisions regarding the hiring and dismissal of staff in Indonesia are generally stipulated in Law No. 13 of 2003 on Manpower as amended by Law No. 6 of 2023 on Stipulation of Government Regulation in Lieu of Law of the Republic of Indonesia No. 2 of 2022 on Job Creation as a Law (“Job Creation Law 2023”) (“Manpower Law”).  Under the Manpower Law, the employer is obliged to fulfil all of the workers’ rights as stipulated in the prevailing laws and regulations.  In the event that the employer hires staff (or, in this case, workers or employees), there must be an employment agreement between the employer and each employee.  This employment agreement must meet the minimum standards, particularly with regard to minimum wages and working hours/days.

In addition, if the employer wishes to terminate the employment of an employee (Pemutusan Hubungan Kerja or “PHK”), it must be on a basis provided in the Manpower Law, and such employer must observe the employee’s rights following the dismissal, including the payment of a severance package, as required by the Manpower Law.

5.2        What, if any, mandatory employment benefits must be provided to staff?

Mandatory employment benefits include, among others: break time; annual work leave for at least 12 working days for 12 months of their working period; enrolment with the Social Security Administering Body (Badan Penyelenggara Jaminan Sosial or “BPJS”) and the receipt of certain monthly payments for employee social security, work training, and work health and safety (K3); and the right to choose work placement.

5.3        What, if any, hurdles must businesses overcome to bring employees from outside your jurisdiction into your jurisdiction?  Is there a special route for obtaining permission for individuals who wish to work for fintech businesses?

Subject to Government Regulation No. 34 of 2021 on the Utilization of Foreign Workers, businesses that wish to hire expatriates must first obtain approval of its Foreign Workers Utilization Plans (“RPTKA”) from the Ministry of Manpower, which must state, among others, the identity of the employee(s), reasons of employment, his/her position, location of work and domicile.  However, fintech businesses are exempted from the obligation to obtain such RPTKA approval for a period of three months.  Such companies are only required to obtain RPTKA approval if they wish to employ expatriates for a longer period of time.

6.1        Please briefly describe how innovations and inventions are protected in your jurisdiction.

In Indonesia, innovations and inventions are protected through intellectual property rights (“IPR”), which may be protected as copyright, trademarks, patents, industrial designs, geographical indications, trade secrets and integrated electronic circuit designs.

Patents provide protection for new technological inventions for a period of 20 years, with an alternative of a simple patent for less complicated inventions of new products or tools providing 10 years of protection, however both without room for any extension.  Copyright protects a broad array of IPR covering science, art, literature, and even computer programs.  Protection over a computer program is valid for 50 years since its first announcement.

6.2        Please briefly describe how ownership of IP operates in your jurisdiction.

Indonesian law recognises the “first to declare” concept for copyright protection, which automatically vests once declared by the owner, however can be registered and listed under the general list of inventions for the purpose of concrete proof of ownership.  This means that whoever first publishes his/her work to the public would be recognised as the rightful owner of the IP.

On the other hand, protection of other IPR, including patents and trademarks, uses the “first to register” concept.  This means that in order to gain exclusive rights over the invention, one must register the invention to the Directorate General of Intellectual Property (“DGIP”).

6.3        In order to protect or enforce IP rights in your jurisdiction, do you need to own local/national rights or are you able to enforce other rights (for example, do any treaties or multi-jurisdictional rights apply)?

Indonesia has taken measures to strengthen its laws for IPR protection and regulation, including expanding its regulatory framework for IPRs arising from other jurisdictions.  In particular, Indonesia has signed the Trade-Related Aspects of Intellectual Property Rights as part of the World Trade Organization Agreement in 1994, which prompted the ratification of various international conventions that oblige Indonesia to protect IPRs belonging to parties from other signatory countries, including the: (i) Berne Convention for the Protection of Artistic and Literary Works as implemented through Law No. 28 of 2014 on Copyrights; (ii) Paris Convention for the Protection of Industrial Property, as ratified through Law No. 13 of 2016 on Patents, as amended by the Job Creation Law 2023; (iii) Madrid Protocol, as ratified through Presidential Regulation No. 92 of 2017 on the Ratification of the Protocol Relating to the Madrid Agreement on the International Registration of Marks 1989; and (iv) Beijing Treaty on Audiovisual Perfomances, as ratified through Presidential Regulation No. 2 of 2020 on the Ratification of the Beijing Treaty on Audiovisual Performances.

6.4        How do you exploit/monetise IP in your jurisdiction and are there any particular rules or restrictions regarding such exploitation/monetisation?

Exploiting/monetising IP in Indonesia is commonly done through IP licence agreements and royalties.  The owner of an IP may choose to transfer his/her exclusive rights by issuing a licence to a third party in writing, in order for the third party to use the IP and generate benefits.  As a result, the licence agreement may include provisions such as the particulars of the IPRs (e.g., the registration number, title of the IP, and its owner), the right to grant sublicences, and the territorial application of such licence.  Since Indonesian IP laws do not specifically regulate the payment mechanisms for the use of IPRs by a licensee, the licence agreement may reflect an agreement for the licensor to calculate and collect royalty payments generated from the licensee’s revenues in using the IP.  Moreover, in order for the licence agreement to have legal effect on other parties outside the agreement, the signing parties would need to record and publish it with the DGIP along with a payment of a fee for registering the agreement.