The Indonesian government has issued a regulation for foreign business practitioners specifically in e-commerce and marketplace business. The “foreign” itself is defined as a foreign individual or business entity that incorporates and is domiciled outside the Indonesian jurisdiction which carried out an electronic commerce business in Indonesian territory.
The foreign business practitioner is categorized as (i) foreign merchants (sellers), (ii) foreign E-Commerce organizers (“PPMSE”), and (iii) foreign Intermediary service organizers. The scope of its categories and also the licensing requirements are elaborated in the table below:
| No | Business Practitioner Category | Definition and the Scope | Licensing Requirements |
| 1 | Foreign Merchants (sellers); | Comprises of any individual or business entity that carry out an offer/trading electronically through their own electronic systems or via facilities which are provided by e-commerce organizers (either domestic or foreign). | Must obtain a business license from their country of origin and provide the business license information (register the number, name, and the issuing agency of the valid business license in the relevant country of origin) to onshore PPMSE. |
| 2 | Foreign e-commerce organizers (PPMSE) | Comprises of any individual or business entity that provides electronic communication to be used for trade transactions. All parties who provide Electronic System Services and/or facilities to enable a transaction for electronic transaction business activities to be carried out, which includes to: · Online retailing; · Marketplaces; · Online classified advertisements (iklan baris); · Price comparison platforms; and · Daily deals. |
1. Foreign PPMSE must establish a trade representative office for e-commerce activities (“KP3A PMSE”) in Indonesia, if one of these criteria is fulfilled: a) Annual transaction is more than 1,000 consumers in Indonesia; b) Annual delivery of more than 1,000 packages to consumers in Indonesia. The KP3A PMSE must obtain a representative office trade business license (“SIUP3A”). SIUP3A remains valid as long as the office still perform its representative activities. 2. The representative office must obtain an ESO registration certificate from the MOCI. 3. Foreign PPMSE must submit data and information to BPS. |
| 3. | Intermediary service organizer (PSP) | Intermediary service organizers comprise any individuals or business entities that provide search engine services, permanent information storage space (hosting) services and temporary information storage space (caching) services. | 1. Must obtain SIUPMSE, which will become valid upon the fulfillment of commitments. 2. The SIUPMSE remains valid as long as the PSPs still perform their business activities. 3. PSPs are exempted from licensing requirements if one of the following criteria have been fulfilled: a) They are not direct beneficiaries of the e-commerce transactions; b) They are not directly involved in a contractual relationship between parties to e-commerce activities. |
ESTABLISH FOREIGN TRADE REPRESENTATIVE OFFICE FOR FOREIGN E-COMMERCE ORGANIZERS (KP3A PMSE)
Representative Office of a Foreign Trading Company in the field of Trading through electronic systems, hereinafter referred to as KP3A PMSE, is an office headed by 1 (one) or more individual Indonesian citizens or foreign nationals appointed by overseas PPMSE as representatives in Indonesia.
The representative office can only represent one foreign PPMSE, only permitted to conduct the following activities:
- Fulfilling consumer protection obligations;
- Developing the competitiveness of products and/or services; and
- Settling the disputes.
The KP3A PMSE must be located in provincial capital cities or districts or cities in the entire Indonesian territory. The KP3A PMSE can also open a branch office with the approval of the foreign PPMSE that is being represented.
The business license of the KP3A PMSE is called SIUP3A. To obtain the SIUP3A, the applicant shall prepare the required documents such as articles of association/incorporation of the foreign PPMSE, the website address and/or the phone application of the foreign PPMSE, and so on (the complete requirements are available by submitting your inquiry below).
Within 14 (fourteen) working days of the issuance of the SIUP3A, the KP3A PMSE shall submit a registration certificate under the name of the represented PPMSE.
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