With the introduction of a recent law*, creative entrepreneurs will soon be able to use their intellectual property as collateral for loans with financial institutions. The Government has introduced this law to stimulate the creative economy – making it easier for creatives to add value to the economy by allowing past successes to help fund future enterprises.

Not all IP can be used as collateral. Only IP that has been recorded or registered with the government and has been commercialised. The collateral can be in the form of a fiduciary security, the right to collect royalties, or an IP contract (e.g. license agreement).

The new law also stipulates that the party assessing the value of the IP to be used as collateral must have a permit and be registered with the government. Any entrepreneur who obtains financing in this manner, must register the fact with the government.

This regulation will take effect on 12 July 2023.

*Government Regulation No. 24 of 2022 on Implementing Regulation of Law No. of 2019 on Creative Economy.