How to Sell on E-Commerce Marketplaces in Indonesia as a Foreigner

Indonesia’s e-commerce market has shown significant growth in recent years. As per latest market projections, the sector is expected to reach US$168.10 billion by 2029, with a compound annual growth rate (CAGR) of 15.5%.

However, foreign entrepreneurs looking to sell on E-Commerce Marketplaces in Indonesia face specific regulatory challenges since the case of Mr. Hu (discussed in the next section). The Indonesian government has implemented regulations aimed at protecting local businesses and ensuring compliance with national standards.

In this article, we will take a look at these restrictions and how you can sell on E-commerce platforms in Indonesia as a foreigner.

Restrictions for Foreign E-commerce Sellers in Indonesia

Mr. Hu was a foreign cross-border seller on Shopee, one of the biggest e-commerce platforms in Indonesia. He sold goods from China way below Indonesia’s market price. This caused anger for the price difference from local online sellers.

As a result, the case went viral on social media and caused the Indonesian government to step in. It eventually led to changes in Shopee’s regulations and a stigma for Indonesians to shop from local sellers only. 

Given the situation, The Ministry of Trade Regulation implemented several restrictions for foreign merchants which were later revised in 2023.

According to the Ministry of Trade Regulation No. 31 of 2023 (MOT 31/2023), following are the restrictions on foreign e-commerce merchants in Indonesia:

• Minimum Pricing: A minimum price of USD 100 (FOB) per unit applies for finished goods imported directly into Indonesia.
• Language Requirement: Product descriptions must be in simple, easily understood Indonesian.
• Product Compliance: All products must meet Indonesian standards and obtain necessary certifications (e.g., SNI, Halal certificates).
• Origin Disclosure: The country of origin for all goods and services must be clearly displayed.
• Identity Verification: Foreign merchants must provide detailed personal and business information from their country of origin.
• Business Licensing: A properly legalized business license from the merchant’s home country must be submitted.
• Social Commerce Limitations: Restrictions exist on payment facilitation and manufacturing roles for social commerce platforms.
• Legal Compliance: Adherence to Indonesian regulations on consumer protection, data privacy, and competition is mandatory.

All E-commerce platforms in Indonesia are required to actively monitor foreign merchants to ensure compliance with these requirements.

In addition to these restrictions, Foreign e-commerce operators (PPSMEs) must establish a representative office in Indonesia if they meet any of the following criteria:

• Complete over 1,000 transactions with Indonesian consumers within a year
• Deliver over 1,000 packages to Indonesian consumers within a year
• Traffic to their platform constitutes at least 1% of total local internet traffic in Indonesia within a one-year period

How to Sell on E-commerce Marketplaces in Indonesia as a Foreigner

1. Set up a Foreign-owned Company in Indonesia

Considering the restrictions in place for foreign merchants for selling on e-commerce platforms in Indonesia and the requirements to have an Indonesian ID card (KTP) and an Indonesian phone number (+62), it is advisable for foreigners to sell as a legal entity instead of selling as an Individual.

You can register a foreign owned company (PT PMA) in Indonesia as it allows 100% foreign ownership and limited liability.

Keep in mind that you are required to have a minimum paid-up capital of IDR 2.5 billion (USD 150,000) for a PT PMA. Moreover, you must have a commercial address for your business suitable for your business activity.

Emerhub’s business advisors in Indonesia will handle the company registration on your behalf and help you obtain the necessary permits to start selling on e-commerce platforms in Indonesia.

You can discuss your plans and needs with our experts by filling out the form below.

2. Choose the Right E-commerce Marketplaces and Your Product niche

Before you start selling your products in Indonesia using E-commerce platforms, you need to identify the right marketplaces and product niche for your business.

Shopee is the most visited e-commerce platform in Indonesia, with more than 150 million monthly visitors. Other significant players in the market include Lazada (backed by Ali Baba), Blibli, and Bukalapak.

There are now many marketplaces to choose from in Indonesia. You will need to understand how each marketplace operates, how prices differ, and the best-selling products.

For instance, Tokopedia leads the sales for gadgets, heavy equipment, medical supplies, and household needs. On the other platform, Shopee leads for fashion, accessories, beauty products, and home decor.

3. Submit the Required Documents to Sell as an Official Store on E-commerce Marketplaces

An official store is an exclusive service provided by marketplaces. It shows the buyers that the seller of an official store is the rightful owner of the brand and has legal rights to sell the products on the marketplace.

Selling as an official store instead of a regular merchant allows you to gain more credibility and trust from customers. It also allows you to get special features and promotions that are different on each marketplace.

The term for official store service also differs on different marketplaces, such as below.

Tokopedia	Shopee	Bukalapak	Lazada
Official Store	Shopee Mall	BukaMall	Official Store

To start selling as an official store with a legal entity on marketplaces, it is mandatory to attach the following company documents:

• Company tax card (NPWP)
• Company deed (Akta Perusahaan)
• Business license (SIUP/NIB)
• Domicile certificate of the company (SKDP)
• Trademark rights (HAKI)
• Taxable company confirmation letter (SKPPKP)

In some cases, you will also need to attach the documents below:

• BPOM certificate only for sales of food and beverages, health and beauty products
• Distributor appointment letter only for distributors
• SNI only for specific products that require an SNI certificate
• SDPPI only for telecommunications equipment
• SIA/SIPA only for pharmacies
• Indonesian ID card (KTP) of the official signing the contract (only on Tokopedia)

4. Start selling as an official store on e-commerce marketplaces in Indonesia

After you registered for an official store application, you must wait for approval from the marketplaces. Soon after, you will be ready to sell your products on the marketplaces in Indonesia.

Make sure to have good product photos and copywriting in the product description. Buyers tend to be more interested in products with good visuals on the marketplaces.

Besides, you need to ensure your products are original and available with competitive pricing. Marketplaces will evaluate your official store if you don’t. 

And, you would not want to end up like Mr. Hu for selling products for a meager price.

5. Report and Pay Taxes to Indonesia

As an official store seller, marketplaces such as Tokopedia and Shopee will impose 10% VAT on the final administration fee per product. The administration fee depends on the product category (2-12%).

Tokopedia and Shopee will report and bear the value-added tax. You are also entitled to report and pay income tax from selling online to Indonesia since your company owns an Indonesian Tax Card (NPWP).

E-commerce Account Holder – An Alternative to Company Registration for E-commerce Selling

For those who are looking for a faster mode of entry to Indonesian E-commerce market without setting up a company, using an e-commerce account holder is a recommended option.

An e-commerce account holder like Emerhub can provide the documents and register you for a regular merchant or official store as they already have the necessary license and permits. You can create accounts on E-commerce platforms and start selling your products right away.

This option is particularly suitable for those who want to test the waters before making significant investments. Or if the requirements for a PT PMA are too costly and time-consuming for you.

With our E-commerce account holder service, Emerhub also helps you stay compliant with Indonesian rules and regulations. The support services include bookkeeping and monthly to annual tax services as per Indonesia’s tax law.

Fill out the form below to reach out to one of our experts and discuss the most suitable options for you to sell on e-commerce marketplaces in Indonesia.