July 28, 2020 | Regulatory Updates

With the objective to monitor and orchestrate the operations of business practitioners of trades in Indonesia through the use of electronic systems, and respectively to implement Government Regulation No. 80 of 2019 on Commerce through Electronic Systems; 


The Ministry of Trade has established the Minister of Trade Regulation No. 50 of 2020 concerning the Requirements of Business Licensing, Advertising, Development, and Supervision of Businesses in Commercial sector through the usage of Electronic Systems (“MoT No. 50/2020”). This regulation became effective as of May 19th 2020. 

Business practitioners are now required to obtain their respective business licenses for trade transactions through electronic systems (Surat Izin Usaha Perdagangan melalui Sistem Elektronik/SIUPMSE) by way of the Online Single Submission portal. 

As an exception however, intermediary service providers are not required to obtain SIUPMSE if they are not the party that 'directly benefit' off the transaction, or are not directly involved in any contractual relationship between parties that conduct the trades through said electronic systems.

Additionally; For business practitioners domiciled abroad who actively transact with consumers domiciled in Indonesia; It is also a requirement for them to appoint corresponding representatives in Indonesia to act on their behalf should the business be doing or have made transactions with more than 1,000 customers in an one year period and/or has shipped more than 1,000 packages to consumers throughout the aforementioned one year period.

MoT No. 50/2020 also regulates electronic advertisements for marketing and promotional purposes. These electronic advertisements can be published by the business practitioners themselves or through a third party of electronic commerce providers;

Regardless of the approach employed, both methods shall still be subject to Indonesia’s regulations on broadcasting, personal data, consumer protection and business competition principles and rules.

Such said representative offices shall be established as e-commerce representative offices (Kantor Perwakilan Perusahaan Perdagangan Asing di Bidang Perdagangan melalui Sistem Elektronik/KP3A), and in turn will be required to obtain representative office trade business license (Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing/SIUP3A). 

Moreover, whilst carrying out their activities in Indonesia, a KP3A is only allowed to fulfill consumer protection obligation, improve competitiveness of its products, and also settlement of disputes within the national borders of Indonesia.

In accordance with this latest implementation of the government’s guidance and supervision, business practitioners will be required to submit their updated data and/or information to the government's database. 

In the event that the government uncovers any violation of the implementation of trade transaction through the electronic systems by business practitioner, they will then impose administrative sanctions; Firstly, in the form of written warnings, and depending on the severity of the violation, may also include placing the involved business practitioners onto the country's black list, in addition to a termination of all business activities.