Opening Company in Indonesia – E-commerce is a modern non-face business model or a business that does not physically bring a businessperson, and non-sign or not using original signatures. The trading system used in e-commerce is designed to sign electronically.
Electronic signing is designed starting from the time of purchase, inspection and delivery. Therefore, the availability of correct and accurate information about consumers and companies in e-commerce is an absolute requirement. For opening company in Indonesia must follow all procedures that have been determined by the government of Indonesia.
Advantages in E-commerce
e-commerce offers Many advantages that are difficult or cannot be obtained through conventional transactions. The advantages of using e-commerce can be divided into two parts, namely profit for traders and profits for buyers. The advantages for traders include:
- Expand the reach (global reach). If a merchant previously has only a physical store, then the sale transaction is limited by an accessible geographic area. As the emergence of E-Commerce, that is, e-commerce on mobile devices, has resolved any geographical limitations.
- Minimize operational costs. Communication between merchants and buyers over the internet can save paper and phone costs, no need to set up outlet spaces, large operational staff, large warehouses and so on;
- Shorten product cycle and supplier management. Companies can order raw materials or supplier products directly when there is order, so the goods turn over faster and do not need a large warehouse to store those products;
- Unlimited operating time. Business over the internet can be done for hours per day, 7 days per week;
- Service to customers is better. Because communication is done through the internet network, customers can convey the needs and complaints directly so that the company can improve its services.
- Reduce the use of paper in various activities ranging from design stages, production, packing, delivery, distribution to marketing.
- Since the issuance of Presidential Decree number 44 of 2016, Foreign Investors Can Now Open an E-Commerce Business with 100 Percent Full Ownership for Foreigners. This Condition Opens Opportunities for E-Commerce Business to Fully Flourish in Indonesia.
Corporate E-Commerce Restrictions
There are various restrictions on E-commerce companies in Indonesia. There are also procedures for opening company in Indonesia. Here’s an example of what kind of e-commerce business a hundred percent foreign ownership can have:
- A website for bookings that allows users to book a service (hotel or restaurant).
- Web portals that publish content such as articles, audio, and video but the content is provided or created by users or visitors.
- Website buying and selling websites that enable sellers to enable sellers and buyers to meet.
- 2. Below are the types of E-commerce businesses that foreigners cannot own 100% (maximum 49% of foreign ownership).
- Publishing content created by the company: the sites that publish and also make the contents, in written form, audio, or video, but the contents are made by the company itself.
- Website buying and selling websites that allow sellers to advertise their products or services.
- Website distribution services that enable companies to provide services to deliver content.
Regulation for E-Commerce Business
Opening company in Indonesia has all the requirements. Similarly, in terms of the amount of capital. You can still open a business in Indonesia with capital of less than 100 billion rupiah based on the regulations of micro, small and medium enterprises mentioned in Government Regulation No. 17 of 2013. However, foreign ownership can only reach a maximum of 49 percent. Here is the explanation:
- Micro, Investment less than 50 million rupiahs, excluding land and building, with income of 300 million rupiahs per year.
- Medium Enterprises, Investment 500 million rupiahs to 10 billion rupiahs, excluding land and building, with income from 2.5 billion rupiahs to 50 billion rupiahs per year.
- Small Business, Investment from 50 million rupiahs to 500 million rupiahs, excluding land and building, with income from 300 million rupiahs to 2.5 billion rupiahs per year.
Building E-Commerce Business in Indonesia
Here are the legal steps to build an E-commerce business in Indonesia, whether large, micro, small and medium enterprises:
- Register your Company. In this process, you need to obtain a deed of incorporation and consult a notary. Then, the notary will help you to check the availability of your company name by accessing the data in the Ministry of Justice and Human Rights. Then, the notary will provide some documents necessary for further processing of the company registration.
- Getting Certificate of Domicile. Domicile certificates can be obtained in the local government where your business is located.
- Getting Tax Id. The domicile letter is also useful as a requirement document for making a tax card. You will get a tax ID (NPWP) and tax card from your local tax office.
- Submit Online Application to The Ministry of Law and Human Rights. The submission of this application is done online and is useful for registration of your company to the Minister of Law and Human Rights. You must submit an application with all documents previously stated, plus your bank statement and transaction report.
- Get SIUP and TDP. SIUP is a permanent trade license while TDP is a list of companies stating that your business has been officially registered by the Minister of Law and Human Rights. After you submit all the terms and documents, you can get both at one-stop-service offices in the region.
- Registration to the Department of Labor. This is only done if your business has more than 10 staff or has workers with at least 1 million IRD salaries. By registering your company with the Department of Labor, you have certain obligations to include your workers into some health insurance and job insurance.
- Setting Up Your E-Commerce Business Legally. Once all the legal requirements are resolved, you can now start to set up your E-commerce business legally. You must follow all rules for opening company in Indonesia.