General Guideline of Electronic System Operator Registration in Indonesia for Private ESOs
The Indonesian government through the Ministry of Communication and Information (“MoCI”) has long required registration of electronic systems. Based on Government Regulation No. 71 of 2019 on Implementation of Electronic Systems and Transactions (“GR 71/2019”), an ESO is any person (Indonesian, foreign natural person, or legal entity), state organizer, business entity, or organization that provides, manages, and/or operates an electronic system individually or jointly for the users, for purposes of their own and/or other parties (Article 1 (4) of GR71/2019).
It is important to note that an ESO must be registered at MoCI (Article 6 (1) of GR 71/2019). This mandatory registration classifies ESOs into Public and Private ESOs.
In this article, we provide the general guideline for the registration of Private ESOs in Indonesia, including their obligations, the registration process, and the legal implications of ESO Registration.
- ESO Registration Requirements
Under GR 71/2019, ESOs are classified into:
a. Public ESOs: a Public ESO can be a government institution or other institutions appointed by the government institution.
b. Private ESOs: a Private ESO can be any private individual, business entity, or community organization. In this regard, the Electronic Systems categorized as Private ESOs are those that provide:
- manage, and/or operate offers and/or trading of goods and/or services;
- manage, and/or operate financial transaction services;
- the delivery of materials or paid digital contents through data networks by downloading through portals or sites, and delivery through e-mails or other applications into the users’ devices;
- manage, and/or operate communication services, including text messages, voice calls, video calls, e-mails, online chats in the form of digital platforms, networking services, and social media;
- search engines of electronic information in the form of text, audio-visual data, animation, music, videos, films, and games, or any combination of them (partly or wholly); and/or
- the processing of personal data for public services related to electronic transactions.
(Article 2 (5) of GR 71/2019)
Please note that both Private and Public ESOs must complete the ESO Registration before the relevant Electronic Systems are utilized by the end users.
- ESO Registration for Offshore Private ESO
It is important to note that ESO Registration is mandatory to entities, which are established under the laws of Indonesia. Offshore-operated Electronic Systems ("Offshore Private ESO") accessible to the Indonesian general public are also required to obtain ESO Registration. This would be particularly applicable if such Offshore Private ESOs are:
- procuring services in the Indonesian territory;
- commencing business in Indonesia; and/or
- having Electronic Systems that are utilized and/or offered in the Indonesian territory.
During the registration process, an Offshore Private ESO must submit additional information on:
- Identity of the Offshore Private ESO;
- Identity of the management team and/or persons in charge;
- Domicile and certificate of incorporation of the Offshore Private ESO;
- Number of users from Indonesia;
- Total transaction value originating from Indonesia.
The above information must be delivered and submitted with the supporting documents and translated into Bahasa Indonesia.
(Article 4 of MoCI 5/2020 by MoCI Regulation No. 10 of 2021 (“MoCI 5/2020”))
- Procedure of an ESO Registration
Application of an ESO Registration is made through the Online Single Submission ("OSS”) system, a business licensing service supervised and managed by the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal or “BKPM”). Accordingly, the relevant Private ESO must have an OSS Account to carry out ESO Registration.
After the application is made in the OSS system, the OSS would require several documents and/or information on:
- Principal Data;
- Responsible Persons’ Data; and
- Electronic System Registration.
Upon completion of the ESO Registration, the OSS system will provide an ESO registration number (Tanda Daftar Penyelenggara Sistem Elektronik or “TDPSE”), evidencing that the relevant Electronic System has been formally registered. The registered Private ESO will appear on MoCI’s website in the list of Private ESOs (Article 6 of MoCI 5/2020). TDPSE has no validity period.
- Obligations for Private ESO
A registered Private ESO is subject to the following obligations. The ESO has to:
- provide the instructions or guidance in Bahasa Indonesia (Article 9 (2) of MoCI 5/2020);
- ensure its Electronic System does not facilitate the dissemination of prohibited or illegal electronic information and/or documents (Article 9 (3) of MoCI 5/2020);
- have good governance regarding the Information and/or Electronic Documents, and provide the reporting tools (Article 10 (1) of MoCI 5/2020);
- take down illegal contents (Article 13 (1) of MoCI 5/2020); and
- cooperate with the competent authority by opening access to its online platform and/or electronic data for the purpose of monitoring and criminal law enforcement; (Article 21 of MoCI 5/2020).
- Legal Implications of Incompliance with the ESO Registration Obligation
MOCI would impose administrative sanctions against ESOs that have yet to fulfill the mandatory ESO Registration including blocking their access to the electronic systems (Article 7 (2) of MoCI 5/2020).
ESOs that have carried out the ESO Registration prior to the enactment of MoCI 5/2020 need to amend their data in the OSS system to adjust to the new regulation. Such amendment must be reported to MoCI. If the Private ESOs do not make the required adjustments, MoCI would also impose an administrative sanction against the ESOs in the form of a written warning on the possible blocking of access to the Electronic Systems (Article 7 (3) of MoCI 5/2020).
The article above was prepared by Marshall S. Situmorang (Partner) and Audria Putri (Senior Associate).