Starting an eCommerce Business in Indonesia: New Requirements You Must Know About

The Ecommerce market of Indonesia is booming, and anticipated to grow at a CAGR of 9.3%, and valued at $16,338 million by the year 2023, Statista reported.

Another report says, about 11 million Indonesian people became first-time online shoppers in 2017.

A survey of 1000 urban consumers revealed that 63% shop for products online at least once in a month.

In a nutshell, Indonesia’s eCommerce market’s potential is enormous, with an array of possibilities. Thus, investors and entrepreneurs from all parts of the world are investing heavily in the eCommerce segment of Indonesia.

But, what has fostered the e-commerce growth in the country? The answer—well-equipped digital infrastructure, supportive government, thickly-populated nation, and forward-thinking citizens.

How to Setup an Ecommerce Business in Indonesia?

Here Are the Critical Steps for Setting Up an Ecommerce Company in Indonesia:

Step 1: First of all, you’ve to register your imported or foreign products.

Step 2: If you want complete ownership of your eCommerce business in Indonesia, you need a minimum capital of IDR 100 billion, and anything less would mean 49% foreign investment.

Step 3: You’ll have to obtain the eCommerce license by applying through the Online Single Submission System.

Step 4: Finally, you’ll have to ensure that you comply with all the requirements such as taxes, company registration in Indonesia, code of practices, standardization of goods, etc.

New Requirements in November 2020

The Ministry of Trade of Indonesia (MOT), on May 19, 2020, has issued a new regulation, new regulation MOT Reg. 50/2020.

For already running eCommerce companies will come into effect from November 2020.

As the Mot Reg. 50/2020, There Are Three Categories of Ecommerce Business in Indonesia. These Are

• Local and Foreign Ecommerce Organisers (PPMSE)
• Local and Foreign Ecommerce Merchants
• Local and Foreign Intermediary Services Organisers (PSP)

Local and Foreign Ecommerce Merchants

• They must obtain a proper trade business license to do eCommerce business in Indonesia.
• If they have their eCommerce platform (or facilities), then they need to obtain SIAMESE.

Local and Foreign Ecommerce Organizers (PPMSE)

• Obtain eCommerce Trade Business License (SIUPMSE)
• They’ll have to elect a representative that will act as an office of foreign trade.

Local and Foreign Intermediary Services Organizers (PSP)

• Obtain eCommerce Trade Business License (SIUPMSE)
• If you are not involved in the direct eCommerce transaction, then you don’t need the SIUPMSE.

Other Important Requirements & Changes Worth Knowing

• Every eCommerce business has to market products & services, which are locally-made.
• Ecommerce businesses in Indonesia can promote their products/services via direct or third-party electronic advertisement.
• Every representative office has to provide an Electronic Service Provider Registration Certificate ( ESP Certificate)
• If you have an eCommerce business before the MOT Reg. 50/2020, it will stay validated.

How Can A Local Business Consultant Assist?

A qualified business consultant can help you successfully run your eCommerce business in Indonesia, right from guiding with the initial setup requirements to strategic advice on marketing your business.

Each legal entity in Indonesia has its own set of legal & tax obligations; a credible business consultancy firm will advise you on what to opt for, based on your present and future goals.

Moreover, they are well aware of MOT’s latest regulations and assist you in complying with them to avoid any legal troubles later on.