Indonesia Introduces New E-Commerce Regulations to Regulate Social and Cross-Border Trades

Get complete information regarding important aspects in MOT Regulation 31/2023 which applies to all business actors of PMSE, especially regarding social commerce and foreign PMSE.

1. Social Commerce and Marketplaces are only permitted to facilitate the promotion of goods and services, and are prohibited from acting as producers and carrying out payment transactions via electronic systems.
2. Overseas PMSEs that meet certain criteria must appoint representatives domiciled in Indonesian territory in the form of a KP3A in the PMSE sector.
3. Overseas PMSEs must also comply with the minimum Freight on Board (FOB) price for imported goods of US$ 100 per unit of goods.
   
   

Minister of Trade Regulation Number 31 of 2023 (“MOT Regulation 31/2023”) aims to create a trade ecosystem through an electronic system (“PMSE”) that is fair, healthy and beneficial. The MOT Regulation 31/2023 aims to support the empowerment of domestic MSMEs and PMSEs so they can compete with foreign business actors.

With the enactment of MOT Regulation 31/2023, the MOT Regulation 50/2020 is revoked and declared invalid. The main difference from the previous Trade Minister is regarding social commerce. Now social media which is included in the social commerce category is only permitted to facilitate the promotion of goods and services, and is prohibited from acting as a producer and carrying out payment transactions via electronic systems. This means that social commerce cannot sell goods or services directly to consumers, but only acts as an intermediary between sellers and buyers. Social commerce also cannot provide online payment services, but must direct consumers to other payment methods provided by sellers or third parties.

In the context of cross-border PMSE, overseas PMSE that meets the following criteria:

1. have carried out transactions with at least 1,000 (one thousand) consumers within a period of 1 (one) year;
2. has delivered at least 1,000 (one thousand) packages to consumers within a period of 1 (one) year; and/or
3. has had traffic or access of at least 1% (one percent) of domestic internet users within a period of 1 (one) year;

is required to appoint a representative domiciled in Indonesia in the form of a Foreign Trade Company Representative Office (Kantor Perwakilan Perusahaan Perdagangan Asing “KP3A”) of PMSE Sector to represent the interests of overseas PPMSE in matters of administration, licensing, taxation and dispute resolution.