Foreign E-commerce Activities in Indonesia

Indonesia E-Commerce Rules (MOT 50/2020 to MOT 31/2023)

In 2020, the Minister of Trade of the Republic of Indonesia (“MOT”) issued the implementing regulation of Government Regulation No. 80 of 2019 on E-commerce that had been issued a year before.

This implementing regulation is called MOT Regulation No. 50 of 2020 concerning the Provisions on Business Licensing, Advertisement, Development, and Supervision of Business Players in Trading through Electronic System (“MOT Regulation No. 50/2020”), and it came into force on November 19, 2020.

MOT Regulation No. 50/2020 changes the requirements for foreign e-commerce companies’ practices in doing business in Indonesia as it obliges foreign e-commerce platform providers, intermediary online service providers, and foreign online merchants to comply with certain requirements, including licensing and registration requirements

However, MOT Regulation No. 50/2020 has since been revoked.
The revocation was carried out through MOT Regulation No. 31 of 2023 concerning the Provisions on Business Licensing, Advertisement, Development, and Supervision of Business Players in Trading through Electronic Systems, which was effective from 26 September 2023 (“MOT No. 31/2023”).

MOT Regulation No. 31/2023 is essentially an enhanced and updated version of the revoked MOT Regulation No. 50/2020. It provides clearer rules that reflect current market conditions and the evolving types of e-commerce businesses. For example, it formally recognizes marketplaces, introduces more specific regulations of social-commerce activities, and addresses new digital business models, as discussed below:

Foreign E-Commerce Platform Provider^[1]

Like the MOT Regulation No. 50/2020, MOT Regulation No. 31/2023 provides that any Foreign E-Commerce Platform Provider that meets the following criteria must establish or appoint a local representative office in Indonesia, known as the Representative Office of a Foreign Trading Company in the Electronic Commerce Sector (Kantor Perwakilan Perusahaan Perdagangan Asing Bidang Perdagangan Melalui Sistem Elektronik or “KP3 Bidang PMSE”). The appointed local representative must also obtain a Foreign Trading Company Representative Business License in the Electronic Commerce Sector (Surat Izin Usaha Perwakilan Perusahaan Perdagangan Asing di Bidang PMSE or “SIUP3A”).

There is an update to the criteria, with the addition of point (c) below:

(a) sales to more than 1,000 consumers^[2] within a period of one year; or
(b) shipped more than 1,000 packages to consumers within a period of one year; and/or
(c) has a traffic volume or number of users amounting to at least 1% of domestic internet users within a one-year period.

In addition to the above, both foreign and domestic e-commerce platform providers must register their electronic systems with the Minister of Communications and Informatics and comply with other requirements provided in the regulations such as import and export and regulations regarding information and electronic transactions, as applicable.

Foreign Online Merchants^[3]

Previously MOT Regulation No. 50/2020 only required foreign online merchants who conduct trading via third-party domestic e-commerce platform providers to file their business licenses (issued by the authorities in their originating country) with their associated Indonesian e-commerce platform providers.

However, under the MOT Regulation No.31/2023 the requirements have been expanded and made in more detail for Foreign merchants conducting Electronic Commerce (PMSE) activities through a Domestic Electronic Commerce Operator (PPMSE) that provides facilities for foreign merchants, as follows:

(1) Required submissions

a. The identity of the foreign merchant, consisting of the name and country-of-origin address;

b. A business license issued by the competent authority in the merchant’s home country, legalized by:

1. the competent authority of a country that is a party to the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (Apostille Convention); or
2. an official representative of the Republic of Indonesia in the merchant’s home country for countries not party to the Apostille Convention;

c. Evidence of compliance with mandatory standards or technical requirements for the relevant Goods and/or Services, which consists of; and

1. Compliance with Indonesian National Standards (SNI) or other mandatory technical requirements for goods/services that are subject to mandatory SNI or technical regulations;
2. Compliance with home-country standards or technical requirements for goods/services that are not yet subject to mandatory Indonesian standards; and
3. A halal certificate for goods/services required to be halal under applicable laws.

d. The bank account number used for transactions,

which must be submitted to the domestic PPMSE that provides facilities for such foreign merchants.

(2) Additional obligations

In addition to the requirements above, foreign merchants conducting PMSE through a PPMSE must:

a. Use clear Indonesian language in the product/service descriptions of the goods and/or services traded; and
b. Display information regarding the country of origin of shipment for the goods and/or services.

---

The submissions under paragraph (1)(a) and (1)(b) must be supported by a certificate or inspection report verifying the accuracy of the data, issued by an independent surveyor in the merchant’s home country.

If a foreign merchant fails to meet the above requirements, the PPMSE providing facilities for foreign merchants must reject the merchant’s registration request.

There is no explicit local business licensing requirement for Foreign Online Merchantsthat conduct e-commerce activities via self-managed/operated e-commerce platform or a local third-party e-commerce platform providers.

Intermediary Service Providers^[4]

Pursuant to MOT Regulation No. 50/2020, any non-exempted^[5] Foreign Intermediary Services Providers are required to obtain a License in in the Electronic Commerce Sector (Perizinan Berusaha Bidang PMSE).

Major Changes in the MOT Regulation No.31/2023

The following highlights the major changes introduced by the MOT Regulation No.31/2023 regulation.

Aspect / Topic	MOT Regulation No. 50/2020	MOT Regulation No.31/2023 (revised regulation)
Objective / Purpose	Regulate business licensing & supervision for e-commerce.	Update and strengthen regulation to reflect current market conditions: protect consumers, support domestic MSMEs, ensure fair competition in PMSE sector.
Definitions & Scope	More generic / less-detailed definitions of what constitutes electronic trading and platforms.	Introduces clearer, more detailed definitions — e.g. defines business models such as “marketplace (lokapasar)”, “social-commerce”, and distinguishes types of PMSE actors for better regulation and oversight.[6]
Social-commerce / Social media sales	Less clarity / fewer restrictions on social media-based selling or integrated social-commerce models.	Sets explicit rules and restrictions: for example, “social-commerce” platforms are prohibited from facilitating payment transactions in their electronic system (i.e. cannot function as a full e-commerce payment gateway).
Cross-border / Foreign merchants importing goods	Basic regulation of foreign merchants but fewer specific thresholds or stricter requirements.	Introduces stricter measures: sets a minimum price of US$ 100 per unit for finished goods sold directly to Indonesia by Foreign Merchants via cross-border e-commerce. Requires foreign merchants to provide legal business proof from country of origin, comply with Indonesian standards (e.g. SNI, halal if required), label products in Indonesian, and declare origin/shipping origin.
Marketplace / Platform obligations	Obligations to register as PMSE business actor, but weaker obligations on data control and business fairness.	Stronger obligations — platforms must facilitate business licensing registration (linked to OSS system), ensure fair competition, prevent abuse of user data, and cannot act as producers themselves.

For further information on the above, please contact this form.

---

[1] E-commerce Platform Provider means E-commerce players which provide a platform to facilitate the electronic communication/transaction used in E-Commerce.

[2] A consumer is any person who uses goods and/or services available in the community for the benefit of themselves, their family, another person, or another living being, and not for commercial resale – Article 1 paragraph 22 of MOT Regulation No.31/2023.

[3] A party that carries out E-Commerce using (i) its own facilities they themselves create and operate, (ii) facilities owned by an e-commerce platform operator, or (iii) other electronic systems that facilitates E-Commerce.

[4] Intermediary Service Provider means those who facilitate electronic communication (except for telecommunication operator). This party merely serves as an intermediary, which includes search engine, hosting or caching provider.

[5] Intermediary services providers (both domestic and foreign) that meet the following criteria are exempted from the requirement to obtain a Trading Business License through Electronic System:
- do not receive any direct benefit from the transactions; or
- are not directly involved in the contractual relationship between the e-commerce transacting parties.

[6] Source: https://www.antaranews.com/berita/3746568/kemendag-sebut-enam-aturan-utama-dalam-permendag-31-2023 .

---

The information provided in this article does not, and is not intended to, constitute legal advice and is for general informational purposes only. Readers of this article should contact an attorney to obtain advice with respect to any particular legal matter.