There is this whole thing about Internet investment in Indonesia that seems to be generating a lot of confusion. Most recently, TechInAsia picks up on the subject and went on with an extensive post. Allow me to stir the water a little bit…
[disclaimer] First off, it should be said that anyone who plan to invest 250k USD in the Internet Industry in Indonesia should not rely on bloggers and wanderers. Checking with a proper law firm won’t cost you much and generally should get you some reliable answer.
(I’m curious how a legal consultant work both for the ministry as well as for the’ foreign companies to work their way around the new regulation‘, maybe that’ll work, but I’d recommend you to work with a real law firm).
Regulation… What Regulation?
The TechInAsia post, like the DailySocial post before that, was not clear on what regulation are they talking about. I’m assuming that TechInAsia is referring to the DNI – Daftar Negatif Investasi/Negative Investment List – which is a Presidential Regulation and maintained by the BKPM (Foreign Investment Board), the gov’t agency in charge of approving each individual applicant.
Quite a surprise this morning, renowned tech blog TechInAsia apparently did some solid research that you might expect from a journalist, thumbs up! Well, at least for the effort. The headline is clear (and long): “Hold your horses: Indonesian government hasn’t approved any new regulation to halt foreign investments“. Raise the flags, we’re all saved! Honey, here’s my credit card, go shop whatever you want! Justice is done, we’re all gonna be rich.
Well, to quote TechInAsia: “HOLD YOUR HORSES”!! So, the source for this conclusion is Vichi Lestari, a lawyer working for Trias Consultant, who has handled numerous tech companies as her clients as well as being a legal consultant of Indonesia’s ministry of industry.
Newsflash! I’m not a journalist. This blog is not a newspaper. Really. I’m actually an entrepreneur doing some small investments here and there in Indonesia. Weird thing though. Apparently this blog was the first bringing the news that online retail in Indonesia is now closed for foreign investments. Weird because again, I’m not a journalist. Weird because this is actually not “news”, unless you consider changes to the interpretation of the law that came effective on june 28th 2013 is still regarded news more than 1.5 months later.
So what happened next? Well, Dailysocial contacted me asking for some “proof”. Well, I have the “proof” in the form of an official letter of intent from the BKPM but so far my legal adviser requested me not to publish this document as it was sent to him directly and not me. Now, even though I think this letter is an official and public document, I consider myself a smart person by never upsetting lawyers, period.
What happened next was Dailysocial writing a post with the title “Indonesia’s Ministry of Trade MAY Have Banned Foreign Investment for E-Commerce Companies“. “MAY have…”. What the hell do you mean with “MAY have..” ? Is any artcile with “MAY have” in the title even news? Followed by comments like “…but if what Lupker said is true…”. This was then soon reblogged or posted on sites like Yahoo and some tech blogs like SGE, because DS is “the authority”.
UPDATE: Anyone doubting what I write below please read this post and stop asking me for “proof” or quoting me as an unconfirmed souce! Much appreciated.
Wow, this is kind of a shock indeed. Coming home from summer holiday to find out that e-commerce, or online retail as you will, is now completely excluded from ANY foreign investment/ownership in Indonesia. This was already so for offline retail (unless the shop size is larger than 400m2, 1200m2 or 2000m2 depending on the kind of retail), but until now the online industry was excused for this regulation.
But this all changed on June 28th 2013 with a letter from the Secretary General of the Ministry of Trade with reference 689/SJ-DAG/SD/6/2013. Google it. You won’t find it. But basically all the rules that already applied to offline retail now apply to online retail as well. Check page 61 of Perpres 36 2010 where you find the DNI (list of negative investments) for retail businesses. Now if you think your company type is actually not listed there then don’t get your hopes up. Apparently, any company selling directly to consumers (as in private persons) is only allowed in case of 100% local ownership.
Remember the speech from Obama in 2007 in which he argued to stop spying on people who are not suspected of a crime? Probably you don’t, at least that’s what Obama and all other politicians generally assume when they make promises to get voters. Well, please REFRESH YOUR MEMORY.
An then a few years later Obama addressed questions about the US government disregarding all principles of privacy, how ironic. Basically the outcome was that the NSA is allowed without any warrant to access emails and all other digital information as it seems fit, as long as the targets are not living in the US. Nice! Companies like Google and Facebook providing any kind of info the NSA needs, straight from our email boxes.
Now don’t get me wrong, I’m all for security and that for that sacrifices have to be made. However, we’ve made many sacrifices already, such as airport
molestation security. Harassing new moms about their baby milk. Or what about this young girl bound to a wheelchair on her way to get medical treatment? Surely a serious bomb threat. Yep, the kids and the elderly fit the terrorist profile perfectl. Riiiight….. Just like those extremely dangerous women with prosthetic breasts.
You know what they say, once you’re lucky twice you’re good. And while everyone seems to be consistently negative about Indonesian digital entrepreneurs they tend to overlook the ones that are doing great, like Steve Christian. Steve is known from founding Kapanlagi.com together with Eka Wiharto and making it the largest entertainment portal in Indonesia.
Steve is a busy guy, being involved in multiple startups in different digital industries. One of them is news portal Merdeka.com which started early 2012 and has managed to become #6th biggest local site and #20th overall most visited site in Indonesia according to Alexa in just a matter of 14 months.
This is not luck, this is experience, dedication and pushing hard every day. This is not launching something and waiting for a miracle to happen, but knowing that to grow you need to take matters in own hand and enforce growth.
I don’t think I ever met Steve, he doesn’t seem to attend any of the many digital (startup) events and I like that because those events add basically nothing to the growth of your company. They’re more events to showcases ego’s. Anyway, here’s to Steven and his team, good for you guys and cheers to much more in the future. To other startup entrepreneurs, this is how you do it:
There has been a discussion about the definition of a “Public Service”. In the context now most agree with my definition of “a service that’s accessible for the public”. But I gotta agree that usually “Public Service” is defined as a government service such as gas, electricity and public transport. So probably they should change it to “Public Accessible Digital Service”.
For people who still disagree with this interpretation please read art 1 par 4:
Penyelenggara Sistem Elektronik adalah setiap Orang, penyelenggara negara, Badan Usaha, dan masyarakat yang menyediakan, mengelola, dan/atau mengoperasikan Sistem Elektronik secara sendiri-sendiri maupun bersamasama kepada Pengguna Sistem Elektronik untuk keperluan dirinya dan/atau keperluan pihak lain.
Electronic System Operator is any person, state officials, business entities, and community provider, manage and / or operate Electronic systems individually or together to Users for Electronic Systems her needs and / or needs of others.
Pretty clear in my opinion.
This week the long awaited and probably feared Indonesian E-commerce law PP 82 became public and even though I’m no longer (directly) involved in any e-commerce business I thought I would take some time to read it. Mind you, this law is just the beginning and will be followed by 10 government regulations which will provide more details.
My friends from Dailysocial already reported on this law yesterday highlighting the part that requires any e-commerce company doing business in Indonesia to register in Indonesia as well as running their platform on a .ID domain name. Already excisting e-commerce companies are excused from the last clause, for now they are allowed to continue running their service on a .com or any other top level domain name.
Though I agree that the need for a .ID domain name is weird to say the least, it seems that the law poses bigger worries for new and existing e-commerce players in Indonesia. I won’t be discussing the whole law but just highlight some things that attracted my attention.
This was for sure the best way I could have spend 80 minutes of my Sunday, watching the documentary about the founders of Pirate Bay called “Pirate Bay – Away From The KeyBoard”. If you’re a geek or even just have the slightest interest in Internet this is a definite MUST WATCH. If you enjoyed “The Social Network” you probably enjoy this documentary way much more.
Best way I can describe it is using the word “Surreal”. No script writer in Hollywood could possibly come up with the scenario and the characters of this story, it would be dismissed as “over-the-top” or “too far fetched”.
The documentary is about “freedom of speech” or “copyright infringement” depending on where you stand. It’s IT mixed with a little bit of ideology, intrigues, law suites, lots and lots of alcohol and drugs and a datacenter in an atomic bunker (so cool) resulting in the biggest p2p file sharing site in the world.
Opinion wise I’m totally against copyright infringement and the “Freedom of Speech” argument is total bullshit. On the other hand the movie and record industry should smarten up and realize times have changed. Instead of fighting and trolling they should realize the Internet made/makes people consume in different ways. Sticking to an old school approach will lead to more smarter and harder to fight “Pirate Bays” and not solve any issue at all.
But for me this documentary wasn’t so much interesting from the angle of the debate, it was more the story itself and even more the persons behind Pirate Bay. To see how naive highly intelligent people can be. Another example that being smart and being intelligent don’t always go hand in hand.
If you enjoyed this docu like I did, please help out the makers of this docu with a donation.
Yep, Jakarta is flooding, the city (read traffic) comes to a halt and many people have some serious problems due to the excessive rain and floods. In short, it’s a really shitty day in and for Jakarta. While the roof in one of Pacific Place, one of the biggest malls in Jakarta is leaking and elevators stop working someone in the social media dept of this mall saw his chance and made this tweet of the year. You might drown, your car might drown, your house might flood, it might be dangerous in the mall, but KEEP ON SHOPPING!!!