Communications and Information Minister Rudiantara said his ministry had urged foreign OTT digital companies such as Facebook, Twitter, Google and Yahoo to form legal business entities in Indonesia.
"The form of the business entities is still being discussed. They can establish a permanent establishment, joint venture or cooperation with local operators," Rudiantara said in Jakarta on Thursday.
Twitter and Facebook currently only have representative offices in the country, while Google and Yahoo are registered as limited companies. However, the four companies act as dependent agents of their Southeast headquarters in Singapore.
As a result, the companies' earnings from Indonesia, such as from advertising services, serve as income for their headquarters in Singapore.
"Google’s business structure is somewhat different. The local office doesn’t handle the digital advertising, its headquarters does. We will discuss with them whether the digital advertising will be handled by their office in Indonesia or whether they will establish another form," he explained.
According to ministry data, digital advertising in the country stood at more than US$800 million last year, 70 percent of which was enjoyed by Facebook and Google.
The ministry also urged OTT providers to implement content filtering, use the national payment gateway and provide access for legal tapping.
A week after the warning, Rudiantara said several foreign content providers – such as messaging services, social media, games, video streaming sites and data cloud services – had consulted with the ministry on cooperating with local providers, including LINE, which has 60 million customers in Indonesia.
"In addition, the government will allow for a transition period. We have to be realistic. We also have to accommodate their concerns about licensing and permits," he went on. (bbn/thejakartapost)
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