Introduction

In the evolving digital economy, the Indonesian government enforces strict regulations on Electronic System Organizers (Penyelenggara Sistem Elektronik, “PSE”) through the Ministry of Communication and Digital Affairs of the Republic of Indonesia (“MOCDA”). Recognizing the rapid advancement of digital platforms and the increasing reliance of society on electronic services, these regulations aim to ensure that all digital activities operating within or impacting the Indonesian jurisdiction adhere to the nation’s legal and security standards.

All business entities, whether domestic or foreign, that operate electronic systems within Indonesian territory or provide services to users in Indonesia are obligated to register their systems. This mandatory registration serves as a critical foundation for building public trust, ensuring system reliability, enhancing cybersecurity measures, and safeguarding personal data protection in the digital ecosystem.

ET Consultant provides comprehensive assistance for businesses to understand, fulfill, and maintain compliance with these PSE regulations, offering strategic advisory, technical support, and end-to-end solutions tailored to the unique needs of each client. With extensive expertise and in-depth knowledge of regulatory requirements, ET Consultant is committed to facilitating a seamless registration process and helping businesses thrive within Indonesia’s dynamic digital market.

Definition of PSE

PSE refers to any individual, business entity, or public entity that manages, operates, and/or provides electronic systems individually or collectively for its users. An “Electronic System” encompasses a combination of electronic equipment, software, and procedures that function collaboratively to perform activities such as preparing, collecting, processing, analyzing, storing, displaying, announcing, transmitting, and/or disseminating electronic information and/or electronic documents.

The scope of an Electronic System is broad and includes, but is not limited to, systems supporting commercial transactions, digital communications, financial services, online platforms, and cloud computing services. The operation of such systems must ensure the confidentiality, integrity, availability, and authenticity of the data processed, in line with prevailing cybersecurity and data protection standards enforced in Indonesia.

Read More: SNI (Standar Nasional Indonesia)

Objectives of PSE Registration

The primary objectives of PSE registration are to:

1. Ensure transparency and accountability of digital services by mandating the disclosure of system operations, management policies, and responsible parties.
2. Protect the rights of electronic system users by guaranteeing their access to safe, secure, and reliable services that uphold their privacy and data protection rights.
3. Enhance the security and reliability of electronic systems by enforcing compliance with technical standards, cybersecurity protocols, and risk management practices.
4. Support lawful supervision by the Indonesian government through systematic oversight, facilitating government access to relevant data when necessary for regulatory, public safety, or national security purposes.
5. Promote fair competition within the digital economy by creating an equitable regulatory environment that applies to both domestic and foreign service providers.

Scope of PSE Obligations
PSEs operating within or targeting Indonesian users must:

1. Register their electronic systems with the MOCDA through the Online Single Submission Risk-Based Approach (OSS-RBA) platform, ensuring all required documentation and system descriptions are accurately and completely submitted.
2. Guarantee the security and protection of personal data in accordance with prevailing laws, including the obligation to implement adequate organizational and technical security measures, and to notify users and authorities in the event of a data breach.
3. Provide access to electronic systems and stored electronic data when lawfully requested by government authorities for law enforcement, national security, or public interest purposes, subject to due process under Indonesian law.
4. Ensure that the content, services, and operational procedures of their platforms fully comply with all applicable Indonesian regulations, including but not limited to content moderation, consumer protection, taxation, and anti-money laundering obligations.

Failure to register or comply with these obligations may result in administrative sanctions imposed by the MOCDA, including the issuance of warning letters, imposition of administrative fines, temporary suspension of operations, or permanent blocking of access to the unregistered or non-compliant services within Indonesian territory.

Read More: What is LKPM

Categories of PSE

PSEs are classified into two main categories:

1. Domestic PSEs:
   Domestic PSEs refer to business entities that are legally established under the laws of the Republic of Indonesia. These entities are headquartered and primarily operate within Indonesian territory, managing, operating, and providing electronic systems for users located within the jurisdiction. Domestic PSEs may include private companies, state-owned enterprises, non-profit organizations, or public agencies that utilize electronic systems as part of their services or operations.

   To qualify as a Domestic PSE, the entity must:

   • Be incorporated in accordance with Indonesian corporate regulations, such as the Company Law (Law No. 40 of 2007, as amended).
   • Possess valid corporate legal documents, including a Deed of Establishment legalized by the Ministry of Law and Human Rights and a Business Identification Number (NIB).
   • Operate electronic systems that are hosted, maintained, or accessible within Indonesian territory, either through their own infrastructure or through local third-party providers.
   • Comply fully with Indonesian data protection, cybersecurity, and content regulation laws in the development, deployment, and management of their electronic systems.

     Domestic PSEs bear the full spectrum of obligations under Indonesian law, including the requirement to protect user data, ensure the reliability and security of their systems, and facilitate lawful access by Indonesian authorities when necessary. Non-compliance may lead to administrative sanctions, reputational risks, or restrictions on their operational licenses.

2. Foreign PSEs:
   Foreign PSEs refer to entities established outside the jurisdiction of the Republic of Indonesia that operate electronic systems to provide services, information, or digital content accessible to users within Indonesian territory. Although they are based overseas, Foreign PSEs are subject to Indonesian regulations if their platforms, services, or systems have a significant impact on Indonesian users or the Indonesian digital ecosystem.

To qualify as a Foreign PSE, an entity must:

• • Provide electronic services or systems that are used, accessed, or targeted at Indonesian consumers, including platforms available in the Indonesian language, accepting transactions in Indonesian currency, or conducting marketing campaigns directed at Indonesian users.
  • Operate its electronic systems outside of Indonesian physical territory but maintain operational relevance and user engagement within Indonesia.

In compliance with Indonesian law, Foreign PSEs are required to:

• • Appoint a representative office, legal entity, or designated point of contact within Indonesia that acts as the liaison for all compliance, regulatory, and enforcement communications with the MOCDA and other Indonesian authorities.
  • Register their electronic systems with the MOCDA through the OSS-RBA platform, following the same procedures and providing the same level of documentation as required for Domestic PSEs.
  • Ensure full adherence to Indonesian data protection laws, cybersecurity regulations, and content management standards, irrespective of their country of origin.

Failure by Foreign PSEs to fulfill these obligations may result in administrative sanctions, including blocking access to their services within Indonesia, reputational damage, and potential legal actions under Indonesian law. Therefore, proactive compliance is essential for any Foreign PSE seeking to operate sustainably within the Indonesian digital market.

Read More: LKPM Report

Types of Activities Subject to PSE Registration

The applicable regulations meticulously define various types of activities that mandate registration as an Electronic System Organizer (PSE). Entities engaged in any of the following activities must comply with the registration requirements:

1. Electronic Commerce:
   Operation of e-commerce platforms facilitating online transactions between businesses, consumers, or both (B2B, B2C, or C2C models).
   
2. Financial Technology Services:
   Provision of fintech solutions, including digital payments, online lending, peer-to-peer financing, wealth management platforms, and other financial innovations utilizing electronic systems.
   
3. Social Media Platforms:
   Operation of platforms enabling user-generated content, social networking, public communication, or online community building, whether through text, images, audio, or video sharing.
   
4. Online Search Engines:
   Provision of services that allow users to search for information across the internet, including indexing, ranking, and displaying content results.
   
5. Cloud Computing Services:
   Delivery of cloud-based infrastructure, platform, or software services (IaaS, PaaS, SaaS) enabling data storage, computing power, software hosting, or development environments over electronic networks.
   
6. Online Communication Services:
   Facilitation of real-time or asynchronous electronic communications, including instant messaging applications, video conferencing tools, email services, and voice-over-internet-protocol (VoIP) platforms.

In addition to the specified categories, other activities involving the management, storage, transmission, or dissemination of electronic data, digital content, or online services may also be subject to PSE registration obligations. The determination of registration requirements depends on the nature of the services provided, the extent of their accessibility to Indonesian users, and their impact on public interests, national security, and regulatory oversight within the Indonesian jurisdiction.

Entities unsure about the applicability of the PSE registration requirement to their activities are strongly advised to seek professional legal consultation to ensure full compliance and to mitigate potential regulatory risks.

Requirements for PSE Registration

To register as a PSE, an entity must prepare and submit the following:

1. Corporate Documentation: Valid business licenses, such as a Business Identification Number (Nomor Induk Berusaha or “NIB”), and relevant company establishment documents.
2. Electronic System Description: A comprehensive and detailed description of the electronic system’s operation, purpose, technical specifications, data processing flow, and security measures implemented.
3. Privacy Policy: Clearly stated terms regarding the collection, management, use, protection, and disclosure of personal data, in compliance with Indonesian data protection regulations.
4. Security Standards Compliance: Declaration or evidence of conformity with Indonesian cybersecurity standards, demonstrating adequate risk management and protection of system integrity.
5. Contact Information: Designation of a responsible party or liaison officer within Indonesia who will act as the principal contact for regulatory communications and compliance matters.
6. Commitment to Lawful Access: Written agreement to provide lawful access to electronic systems and stored data to authorized Indonesian law enforcement agencies when required.

Upon submission, the MOCDA will review the registration. If approved, the entity will be issued a PSE Registration Certificate. This certificate must be visibly displayed on the PSE’s electronic platform and periodically updated to reflect any significant changes in the system’s operation, ownership, or compliance status.

Conclusion

In the rapidly evolving digital landscape, compliance with Indonesia’s Electronic System Organizers (PSE) regulations is crucial for businesses operating within the country or targeting Indonesian users. As a consulting firm, ET Consultant plays a pivotal role in guiding both domestic and foreign entities through the complex requirements of PSE registration.

By leveraging ET Consultant’s expertise, businesses can navigate the intricacies of registration with the Ministry of Communication and Digital Affairs (MOCDA), ensuring that they meet all necessary legal and cybersecurity standards. From strategic advisory to technical support and end-to-end compliance solutions, ET Consultant is committed to helping clients not only fulfill their PSE obligations but also enhance the security, reliability, and transparency of their electronic systems.

In conclusion, ET Consultant provides valuable assistance to ensure businesses can thrive in Indonesia’s dynamic digital economy while adhering to the regulatory requirements that protect users and support national security. By partnering with ET Consultant, companies can confidently operate within Indonesia, maintain regulatory compliance, and foster trust with their users.

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ET Consultant is a Business Consultant and Legal Consultant Expert that provides support for local and multinational clients to start and manage their business operations in Indonesia. ET Consultant specializes in Business Incorporation, Licensing & Legal, Accounting & Taxes, Immigration, and Advisory Services.

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