For any business conducting operations online within Bali or Indonesia, obtaining the PSE License is crucial. This article delineates the procedure for acquiring the PSE license. It covers the importance in meeting data protection standards, and how it supports your online company to comply with Indonesian regulations.
- The PSE License is vital for online businesses operating in Indonesia, ensuring the electronic system is secure and compliant with data protection standards set by the Indonesian Ministry of Information and Communication.
- Acquiring a PSE License involves a multi-step process including preparing documentation.
- Holding a PSE License offers substantial business benefits such as customer trust and compliance with the regulations.
Understanding the PSE License in Indonesia
Having the PSE License is crucial for any online business within Indonesia. It verifies that an online company complies with Indonesian standards and laws regarding data protection.
Granted by Indonesia’s Ministry of Information and Communication, this PSE certification ensures that a company’s electronic system is secure.
Read Also: Steps to Open Your Company and Business in Bali and Indonesia
The Importance of Having a PSE License
Obtaining a PSE License is essential for an e-commerce business, as it represents a mark of trustworthiness. It signals to customers that the security of your electronic system and their data privacy are taken seriously. Consequently, this certification is instrumental in boosting consumer confidence, engaging users more effectively, and securing the operations of successful commerce over the internet.
Who need a PSE License in Indonesia
All type of business having an activity online offering a range of service and collecting payment online or storing information need to apply for the PSE license. The license is mandatory for:
- e-commerce
- mobile application
- website having electronic transaction or collecting form or data from leads
- platform collecting information or payment
Scope of Electronic Systems Covered by the PSE License
The PSE Certificate covers an extensive array of electronic systems, encapsulating everything from e-commerce platforms to mobile applications and web portals. For operations within the jurisdiction of Indonesia, acquisition of a PSE License is compulsory. In other words, each company operating in Indonesia, having clients and the object of the business in Indonesia have to comply with the regulation.
This comprehensive approach effectively safeguards Indonesia’s digital ecosystem against various threats.
Get professional legal advice for Indonesia
Indonesia’s legal system is complicated, with its many regulations, licences, and special rules for foreigners. Don’t make the mistake of trying to navigate it alone, and get the help of experienced consultants instead.
At ILA, we can help you with intellectual property, corporate law, drafting, reviewing and managing legal documents, navigating commercial transactions and much more.
You’re not alone. Reach out today to schedule a free consultation or read more about our legal service.
Steps to Acquire Your PSE License
Preparing Documentation for PSE Application
In the beginning phase of acquiring a PSE License, document preparation is key. This stage sets the groundwork for establishing your online business in Indonesia, including formalizing your company as an authorized entity. You’ll need to secure a business license (NIB) and obtain a Taxpayer Identification Number (NPWP). Foreigners need to set up a PT PMA in regards to have a legal entity in Indonesia in order to get the NIB and NPWP.
During this initial step, it’s crucial to work with us to understand the strcturure of your business. Completing this phase involves submitting comprehensive profiles that detail both the Electronic System Provider and its associated electronic system. These overviews present critical information about your online enterprise and form an important base to prepare the next steps.
Read Also: 12 Things To Know To Create A Company In Indonesia
OSS Platform for PSE Registration
After assembling all necessary documents, the next phase is to proceed with the Online Single Submission (OSS). This electronic system represents the only channel for acquiring a PSE license. Businesses aiming to register must first accurately identify their business classification in line with their specific e-commerce operations. The company needs to have the proper NIB.
During this phase:
- Identify and specify your sector
- Pinpoint your sub-sector
- Detail your system type, highlighting details of your company’s electronic system
- State where your server is hosted
- Elucidate on how the electronic system facilitates and manages business processes
Post submission of registration through ‘PB-UMKU’ selection on the online single submission platform, you will receive in this phase an electronically PSE registration certificate.
Verification and Approval by MOI Verification Team
Securing the PSE License hinges on the final endorsement from the MOI Verification Team. They will evaluate your business’s risk profile and classifies it accordingly as low, medium or high. The approval will detail the range of services allowed.
This step is essential for legitimizing your online platform or website in Indonesia, marking it as compliant and fit to partake in online transactions.
Legal Framework Surrounding the PSE License
Operating an online business in Indonesia requires understanding the intricate legal framework, specifically governed by Regulation No. 5 of 2020. Acquiring a PSE license is crucial as it demonstrates your commitment to user data protection and adherence to industry standards.
Consequences of Operating Without a PSE License
In Indonesia, conducting business without a PSE License can lead to strong consequences. The risks include facing administrative penalties such as being blocked from access, temporarily suspended, and at worst permanently barred from offering services within the country.
E-commerce platforms and other businesses utilizing private electronic systems must adhere to PSE license regulations or face severe repercussions. Sanctions for non-compliance with PSE certificate requirements are enforced vigorously by the Indonesian authorities who may either directly impose through internet service providers to limit or completely cut off access to those operating illegally.
Updates to PSE Regulations and Compliance Requirements
Businesses operating within the Indonesian e-commerce sphere must remain alert and adaptable to retain their foothold in this constantly evolving market, especially when it comes to securing investment from foreign entities. As technological progress and shifts in market conditions occur, the Indonesian government routinely adjusts its PSE regulations accordingly. It’s crucial for businesses to stay abreast of these legislative modifications.
Setting Up Your E-commerce Business with a PSE License
Following the guidelines of acquiring an e-commerce business license, setting up your e-commerce enterprise in Indonesia can be a smooth and successful venture. This entails making pivotal choices regarding your commerce model, determining the type of legal entity for your business, and incorporating PSE (Private Service Electronic). License requirements into the strategic planning for your commerce operation.
Choosing the Right Business Model and Entity Type
PT PMA is the only legal structure for a foreigner to open a e-commerce company in Indonesia. Local PT is not a protective way to start your business as nominee shareholder is illegal in Indonesia.
Integrating PSE License Considerations into Business Planning
Ensuring that your business strategy accounts for the requirements of a PSE License is akin to preparing thoroughly for an upcoming voyage. This includes evaluating when it becomes necessary to engage a local representative and making arrangements to adhere to regulations.
Adopting this forward-thinking attitude guarantees that your e-commerce venture not only meets Indonesian regulatory standards, but is also well-prepared for thriving within the local commerce scene.
Frequently Asked Questions
How to register small business in Indonesia?
In order to establish a small business in Indonesia, it is necessary to select an appropriate structure. You must provide the shareholders, define a resident director and commissioner. ILA can accompany you to register a small business in Indonesia.
Read Also: Your Guide for Product Registration in Indonesia [2024]
Can foreigners start a business in Indonesia?
Indeed, individuals from other countries are able to establish a business in Indonesia. The particular rules and prerequisites can differ depending on the business category and the country of origin of the foreigner. Typically, this includes creating a PT PMA (Foreign Owned Company) or forming an alliance with an Indonesian counterpart.
What is PSE license in Indonesia?
Issued by the Ministry of Information (MOI) in Indonesia, the PSE license attests to a company’s electronic system complying with data protection standards, thereby enhancing trust among the public regarding online services.
Contact us if you want to get your PSE license or register your online or e-commerce business in Indonesia. You can also book an online meeting with us.
