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Establishment restrictions

INDONESIA

Since 2014

Chapter Intellectual Property Rights  |  Sub-chapter Copyright
Copyright Law (2014)
There is no explicit fair use/fair dealing clause in Indonesia. The Copyright Law (2014) provides a broad exception under Article 43(d) for “making and disseminating copyright content through information and communication technology media that is non-commercial and/or non-profit in its effect on the author or related parties, or in which the author has expressed no objection to such making or disseminating.”
Coverage Horizontal
Establishment restrictions

INDONESIA

Since 2016

Chapter Intellectual Property Rights  |  Sub-chapter Patents
Indonesian Patent Law No.13/2016
Indonesia's patent law has a local manufacturing requirement. The patent holder is obliged to manufacture the patented product or use the patented process in Indonesia. The law also lays down that non-compliance with the requirement within 36 months from the grant of the patent triggers the possibility to issue a compulsory license or the abolishment of the patent. This provision could prevent the patenting of products, produced by any industry, that are not manufactured in Indonesia.
Coverage Horizontal
Establishment restrictions

INDONESIA

Since 2001

Chapter Intellectual Property Rights  |  Sub-chapter Patents
Indonesian Patent Law No.14
The Patent Law promotes the local production by requiring the patent holder to make the patented products or use the patented process in Indonesia. He/she can be exempted from this obligation only if the making of the product or the use of the process is suitable to be implemented on a regional scale.
In the patent application process, applications filed by an inventor/applicant who does not reside or does not have a fixed domicile in Indonesia must be filed through his/her proxy in Indonesia, which is defined as a consultant of intellectual property rights registered at the Directorate General.
Coverage Horizontal
Establishment restrictions

INDONESIA

Since 2014

Chapter Investment  |  Sub-chapter Other restrictive practices related to foreign investment
Requirement to form a joint operation
Consultancy services related to the installation of computer hardware and software implementation services are required to form a joint operation through a representative office in Indonesia.
Coverage ICT services
Source
  • APEC STAR database: http://www.servicestradeforum.org/Indonesia.aspx?country=10&serviceIndustry=8
Establishment restrictions

INDONESIA

Reported in 2012

Chapter Investment  |  Sub-chapter Other restrictive practices related to foreign investment
Prohibition to own base stations/cellular towers
Foreign investors are not allowed to own base stations/cellular towers. Given this regulation, foreign companies could be forced to exit the market as in the case of Singapore Singtel.
Coverage Telecommunication sector
Establishment restrictions

INDONESIA

Reported in 2018

Chapter Investment  |  Sub-chapter Other restrictive practices related to foreign investment
Licensing requirement
Foreign investors are required to register with the Indonesia Investment Coordinating Board (BKPM) and obtain a license.
Coverage Horizontal
Establishment restrictions

INDONESIA

Since 2007

Chapter Investment  |  Sub-chapter Screening of investment and acquisitions
Law No. 25 of 2007 Concerning Investment
To date, there are no reports of foreign investments in the telecom or ICT sectors that were blocked by the Indonesian governement based on national interest considerations. However, the Indonesian government is allowed to block investments on these grounds.
Morevover, the concept of national interest is defined in a broad sense including economic considerations: the protection of natural resources, protection of micro, small and medium-sized enterprises, as well as cooperatives, supervision of production and distribution, increase of technological capacity, participation of domestic capital and joint venture with companies appointed by the government.
Coverage Horizontal
Source
  • WTO Trade Policy Review, Indonesia (2013). P. 25 ; https://www.wto.org/english/tratop_e/tpr_e/s278_e.pdf
Establishment restrictions

INDONESIA

Since 2012

Chapter Investment  |  Sub-chapter Restrictions on board of directors and managers
Appendix of Ministry of Manpower and Transmigration Decree 40/2012
There are nationality requirements for the manager of limited liability companies, while the position of chief executive officer is reserved only to Indonesian nationals. However, in this case there are no residency requirements.
Coverage Limited liability companies
Establishment restrictions

INDONESIA

Since February 2017

Chapter Investment  |  Sub-chapter Restrictions on ownership
Regulation 6/2017
Regulation 6/2017 introduces the requirement that any consortium providing Internet Protocol Television (IPTV) must consist of at least two Indonesian entities (Art. 4). Furthermore, Article 6 of the regulation explicitly points to the fact that any foreign investor must comply with Article 4. Every consortium providing IPTV must seek approval from the Communications Ministry. The letter seeking approval shall also provide information on all company shares belonging to foreign investors (Art. 25(7)h).
Coverage Telecommunication sector
Establishment restrictions

INDONESIA

Since 2003

Chapter Investment  |  Sub-chapter Restrictions on ownership
State-owned Enterprises Act 19/2003
There is a limit of 49% on the shares that can be aquired by foreign investors in government controlled firms.
Coverage Telecommunication sector
Establishment restrictions

INDONESIA

Since 2013

Chapter Investment  |  Sub-chapter Restrictions on ownership
Regulation No. 15/2013
There are limitations on foreign ownership in the express delivery services, which could affect e-retailers. Foreigners are now allowed to own more than 49% of these services. Moreover, foreign suppliers are required to limit their activities to provincial capitals with international airports and seaports.
Coverage Foreign delivery services
Establishment restrictions

INDONESIA

Since 2014

Chapter Investment  |  Sub-chapter Restrictions on ownership
Negative Investment List (DNI), as governed by Presidential Regulation No. 39 of 2014
Online retailing and post retailing was formerly closed to foreign ownership. Foreign investors could not participate in e-commerce activities, although there were no foreign investment restrictions for intermediary e-commerce.

Following Presidential Decree No. 44/2016, effective in May 2016, full foreign ownership is allowed for foreign investors who invest at least IDR 100 billion (approx. USD $7.4 million) for the establishment of an e-commerce company in Indonesia.
Coverage E-retailing and post retailing
Establishment restrictions

INDONESIA

Since 2014

Chapter Investment  |  Sub-chapter Restrictions on ownership
Regulation No. 39/2014

List of Business Fields Open with Conditions to Investment. and President Regulation No. 36/2010
In Indonesia, caps on foreign equity shares for investment are applied as follows:
- 49% for certain telecommunication network providers, including fixed network providers, for multimedia service, internet service providers and mail providers and lastly for value added services, including content service, information service centers, communication data service and internet interconnection services;
- 65% for closed fixed network providers and mobile network providers (cellular and satellite).
Coverage Telecommunication sector
Fiscal Restrictions

INDONESIA

Since 2012

Chapter Public Procurement  |  Sub-chapter Requirement to surrender patents, source codes, trade secrets
Government Regulation No. 82 of 2012 regarding the Provision of Electronic System and Transaction (Regulation 82)
Indonesia's Regulation No. 82 requires that providers of bespoke software provide or escrow the source codes associated with their service.
Coverage Software
Fiscal Restrictions

INDONESIA

Since 2012

Chapter Public Procurement  |  Sub-chapter Preferential purchase schemes covering digital products and services
WTO Government Procurement Agreement (GPA)
Indonesia is currently only an observer to the WTO Agreement on Government Procurement.
Coverage Horizontal