Indonesia, with its rapidly expanding digital economy and large population, has become an attractive market for foreign companies seeking to operate applications. However, foreign entities must carefully navigate Indonesia’s regulatory framework to ensure full compliance. This article outlines the key legal requirements that foreign-owned applications must adhere to when operating in Indonesia.
Foreign companies looking to operate applications in Indonesia must first understand the requirements outlined by Government Regulation No. 71 of 2019 (GR 71/2019) concerning the Implementation of Electronic Systems and Transactions, along with the Minister of Communication and Information Regulation No. 5 of 2020. One of the primary obligations is to register as an Electronic System Provider (TDPSE). This registration is crucial as it ensures that foreign application providers are recognized by Indonesia’s Ministry of Communication and Information. The certification demonstrates that the application meets all necessary technical, legal, and operational standards. Without TDPSE registration, foreign applications cannot lawfully operate in Indonesia.
Handling user data is another critical consideration for foreign companies. Although Indonesia does not strictly prohibit the cross-border transmission of personal data, data controllers are expected to comply with Law No. 27 of 2022 on Personal Data Protection (Law 27/2022). This law governs the management, transfer, and protection of personal data within and outside Indonesia. Article 56 of Law 27/2022 suggests that data controllers outside Indonesia should implement data protection measures that meet or exceed Indonesian standards. Therefore, it is highly recommended that foreign applications ensure their data privacy policies align with both Indonesian and international regulations to mitigate legal risks.
Content restrictions in Indonesia are strictly enforced, and foreign applications must ensure they do not facilitate or disseminate prohibited content. This includes several key types of content. First, under Law No. 44 of 2008 concerning Pornography (Law 44/2008), the dissemination and broadcasting of any pornographic material are strictly prohibited. GR 71/2019 further emphasizes that Electronic System Providers (PSE) are responsible for preventing the inclusion of pornographic content on their platforms. Second, Indonesia enforces laws to prevent content that incites hatred or hostility based on ethnicity, religion, race, and intergroup issues (SARA). Law No. 1 of 2024, which amends Law No. 11 of 2008 on Electronic Information and Transactions (Law 1/2024), prohibits the spread of information intended to incite hatred based on SARA. PSEs are accountable for ensuring their platforms are not used for such purposes. Third, Law No. 7 of 1974 on the Suppression of Gambling (Law 7/1974) strictly bans any form of gambling. According to GR 71/2019, foreign applications must prevent any form of gambling content from being disseminated or facilitated.
Foreign entities can operate applications in Indonesia, but they must adhere to local applicable regulations, beginning with registering as an Electronic System Provider (TDPSE). Additionally, companies should comply with personal data protection laws and ensure their platforms are free from prohibited content such as pornography, SARA, and gambling. For foreign companies considering entry into the Indonesian market, understanding and adhering to these legal obligations is crucial. By following the proper procedures, companies can safely and legally offer their applications to Indonesian users, capitalizing on the country’s fast-growing digital economy.
If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.
Author:
Dewi Susanti