New laws to watch out for if you’re running a tech company in Southeast Asia

Updated: 16 August

Photo: Mark Fischer

Southeast Asia has diverse markets and legal jurisdictions. So, if you’re running an internet company in the region, understanding each market’s peculiarities is important. To help you out, here’s the latest on Southeast Asia’s regulations that might affect your organization.

Indonesia: Upcoming new laws may make e-commerce more challenging

Indonesian sites may soon need an .ID domain name

The country’s Ministry of Communications and Informatics has submitted a proposal for new laws that will force e-commerce companies to register with the ministry. To register, they must use an .id domain name. The rationale for this law is to “protect Indonesian market from fraud by unregulated e-commerce sites,” according to DailySocial.

Indonesia based entrepreneur Remco Lupker has looked at the wording of the law and suggested that it may apply not just to e-commerce sites, but also platforms like Facebook, Twitter, and Path, as well as individual sellers peddling their wares on the forums. Further, the new regulations will require site owners to obtain certificates to prove “expertise”, “airworthiness”, and “reliability”, without any indication of how to obtain these stamps of approval.

The Indonesian government is expected to reveal more details about the new regulations soon.

Foreign investment and ownership in online retail companies may be banned

According to Remco, Indonesia’s Secretary General of the Ministry of Trade has sent instructions for an existing law forbidding retail businesses from receiving foreign investment or having foreign ownership to be applied to e-commerce businesses as well.

While this does not apply immediately to existing companies, they would have two years to comply. While there are potential ways to go around this — mostly revolving around playing with company structure — it certainly makes running a business more complicated.

These proposed changes are part of a worrying trend of introducing protectionist measures in the run up to the 2014 elections. In July last year, Indonesia’s central bank announced a 40 percent single ownership cap of domestic banks. This followed another law in March 2012 that limited foreign ownership in the mining industry to 40 percent from 80 percent.

Singapore: Data protection laws to govern the use of personal information

The island state is slated to follow the examples set by the European Union, United States, and Hong Kong by introducing its own data protection regime. The main data protection rules will take effect from 2 July 2014. Companies still have time to ensure that they conform to the new regulations.