Open an Online Shop in Indonesia

Updated on Tuesday 05th May 2020

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Indonesia is one of the largest economies in Southeast Asia and from here many products take the road of export not only to neighboring states but to countries all over the world. Starting a business in Indonesia has many advantages, among them the fact that companies here can first produce goods and then sell them all over the world. 

One of the best ways of setting up a company in Indonesia is to open an online shop which can reach every corner of the world. There are specific rules to respect when opening a company in Indonesia, especially when it comes to foreign entrepreneurs.

Below, our company incorporation agents in Indonesia explain these requirements. We can also help foreign investors interested in setting up online stores in Indonesia.
 

How to register a company for starting an online store in Indonesia


Foreign investors who want to open online shops in Indonesia must respect the provisions of the Company Law and the requirements of the Investment Coordinating Board which provides for the following:
 
  • a foreign entrepreneur must deposit at least 2,5 million RP in a local bank account;
  • for full foreign ownership, the limited liability company is most suited for an online store;
  • the company must be registered with the Companies Register in Indonesia;
  • specific licenses must be obtained in order to open a company in Indonesia;
  • as an online store, the company must operate on a website registered in Indonesia.

Our company formation consultants in Indonesia can help with the registration procedure of a business form which will be used for establishing an online store.
 

Website creation and domain name registration in Indonesia


The two most important steps for opening an online shop in Indonesia is to have a website created and a domain name registered with one of the accredited registrars. The domain name should be unique and should use the top country domain name .co.id which is usually used by e-commerce companies.

The website can be created by one of the many companies offering IT services, among which website creation is widely spread in Indonesia. It should also be noted that there are many e-commerce platforms operating in Indonesia and on which online stores can sell their products and services.
 

Setting up a merchant account for an online store in Indonesia

One of the most important steps in starting an online shop in Indonesia is to have a merchant account set up. This type of bank account will enable the company to process payments from clients. It must be noted that having a merchant account attached to an online company is a mandatory requirement in Indonesia.

Our local advisors can offer full information on all the requirements related to the special requirements for opening an online store in Indonesia. We can also help with the incorporation of the company which will be used for setting up an online shop in this country.
 

Registering the online shop’s name as a trademark in Indonesia

Even if this not a compulsory requirement, having the domain name of the Indonesian online store registered as a trademark is highly recommended because of a large number of such businesses operating on the local market.

The registration can be done with the Intellectual Property Office in Indonesia. The registration will grant the applicant the right to use it for 10 years. This right can be extended for another period of 10 years based on a new application.

It is important for online shop owners to register their domain names as trademarks in Indonesia in order to avoid having their business names used for deceiving the company’s clients.
 

Why open an online store in Indonesia?

 
Opening an online shop in Indonesia has many advantages. Among these, we mention the fact that many of the products reaching the global market are manufactured in Indonesia, therefore having locally-produced goods and sold directly from Indonesia is a great advantage.

Also, starting an online shop in Indonesia implies the following benefits:
 
  • a large number of products which can be sold all over the world;
  • many types of online shops which can be set up here;
  • operating on one of the most important markets in Southeast Asia;
  • taking advantage of one of the most numerous workforces in the world;
  • various tax incentives offered by the Indonesian government to foreign investors;
  • the possibility of setting up a small business which can later be expanded.


Steps in registering an e-commerce business in Indonesia


In order to start an e-commerce company, a local or a foreign investor must first follow the traditional company registration procedure through the Trade Registry in Indonesia.

The following procedure must be followed in order to register an e-commerce company in Indonesia:
 
  • choosing the right business structure (a sole proprietorship or limited liability company);
  • registering the company with the Companies Register and tax authorities in Indonesia;
  • registering a domain name and having a website created for the e-commerce platform;
  • obtaining the necessary license for selling goods at a distance with the competent authorities.

Our Indonesia company incorporation specialists can help with the registration of a business form for creating an online store.
 

Types of e-commerce companies in Indonesia


E-commerce is highly regulated in Indonesia, which is why starting such type of business here is very safe. The government has even categorized e-commerce companies and those who want to start such a company can choose between the following forms:
 
  • business to customer (B2C) e-commerce companies;
  • business to business (B2B) e-commerce companies;
  • business to government (B2G) e-commerce companies.

The first type of e-commerce company is the most popular in Indonesia and has registered a spectacular growth in the last few years. The second type of company is also popular as local e-commerce platforms act as distribution channels for foreign companies all over the world.

When it comes to foreign investors interested in starting e-commerce companies here, they should know that they can operate in most industries with a few exceptions.
 

Foreigners opening e-commerce companies in Indonesia


Foreign entrepreneurs relocating to Indonesia can open various types of e-commerce companies which they can also fully own. These are web portals through which they can sell user rights to those who want to publish content, marketplaces which can sell goods or can allow other buyers and sellers to meet and reservation websites.

With respect to the restrictions applied to foreigners, these can own 49% in e-commerce companies in the publishing sector, marketplaces created for advertising purposes and distribution e-commerce platforms.

Our local agents can provide full information on the rights and obligations of foreign investors setting up any type of company in Indonesia, including e-commerce companies.
 

Legislation imposed on e-commerce companies in Indonesia


Considering most e-commerce companies are established as online stores in Indonesia, they must respect a few laws which relate to:
 
  • electronic transactions which fall under the provisions of the Electronic Information and Transactions Act, last amended in 2016;
  • the use of authorized electronic services providers which is regulated by the Procedures for the Registration of Electronic System Providers;
  • the protection of personal information on the customers which is regulated by the Protection of Private Data in Electronic Systems Act;
  • the use of accredited registrars when creating websites which are regulated by the Management of Domain Names Law;
  • the E-Commerce Roadmap which provides for the facilities offered to e-commerce companies registered in Indonesia – this law was introduced in 2017;
  • e-commerce companies must also observe the Anti-Money Laundering Regulations.

All e-commerce companies in Indonesia must respect the Requirements for Licensing Services of E-Commerce Trading and Digital Signatures and the Contract Law imposed by the Ministry for Trade in Indonesia.

Online shops must respect certain requirements which can be explained by our team of professional consultants in company formation in Indonesia. Do not hesitate to contact us for assistance in registering any type of company in Indonesia.