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Online storefronts now required to have business permit, prioritize local products

Jakarta Post - December 5, 2019

Jakarta – President Joko "Jokowi" Widodo has issued a regulation that requires online storefronts to apply for an official business permit from the government, among other things, in an effort to bolster the country's e-commerce ecosystem.

As stipulated in the newly ratified Government Regulation No. 80/2019, all business owners that engage in online trade through e-commerce platforms and related channels are required to have an official permit. Meanwhile, storefronts that only serve as middlemen and do not benefit directly from transactions are exempt from this rule.

Business owners may apply for such permits through the online single submission (OSS) system, according to the regulation.

Other key provisions include prioritizing locally made products and/or services, improving the competitiveness of such products and/or services and providing a special section dedicated to showcasing such products and/or services.

In addition, Article 14 of the regulation stipulates that online shops are required to conduct business through a "certified electronic system".

The regulation also serves as an official tether that legally binds online storefronts based outside the country to the government's more stringent terms.

In accordance with the regulation, overseas business enterprises that actively make offers to and conduct transactions with customers based in Indonesia are considered entities that operate within the country and are thus subject to the government's regulations and laws, including those related to taxation.

Furthermore, online storefronts that offer cross-border delivery are now obligated to comply with the government's export and import regulations. Whereas online storefronts that offer products and services that may pose a risk to national security must first be vetted and issued a security clearance by related agencies, in accordance with the established law.

As part of an effort to improve e-commerce security in the country, the regulation also stipulates that online enterprises at home and abroad are obligated to register their storefronts using high-priority Indonesian commercial domain.id, as well as to store information in data centers and servers in accordance to the prevailing laws for certain periods of time.

Online storefronts that fail to comply with the regulation, as well as related terms and conditions will be subject to sanctions. (rfa)

Source: https://www.thejakartapost.com/news/2019/12/05/online-storefronts-now-required-to-have-business-permit-prioritize-local-products.html