Abstract: Cooperatives were once the economic pillars of Indonesia. However, the trend shows that the population in general are currently starting to stray away from cooperatives. This research aims to answer two questions: whether the current regulatory framework in Indonesia provide adequate support to the development of cooperatives and what solutions are available to improve the regulatory framework for cooperatives. It was found that the current legal framework still presents a number of difficulties for the establishment of cooperatives; namely the complex and lengthy establishment procedures. To overcome the challenges faced by cooperatives, the government must simplify the complex and lengthy establishment procedure harmonize the regulatory framework with the adat law framework, establish government institutions for the monitoring and evaluation of cooperatives, create third party grievance mechanisms and provide financial assistance and funding schemes to help cooperatives compete with companies.