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DC Market – Set Up a Data Centre in Indonesia
Get the edge on the data economy and set up a data centre in Indonesia with 3E Accounting’s essential read.
Digital adoption has occurred worldwide, catalysed by the pandemic. This has given rise to a data economy, which is driving a surge in the data centre market growth. Having Southeast Asia most robust digital economy, Indonesia is poised to capitalise on this lucrative sector. Global giants such as Facebook have already established several data centres here. The new digital environment is taking over, and it is now time to set up a data centre in Indonesia.
A Sunrise Sector in the Making
Indonesia’s digital economy is projected to hit USD$125 billion by 2025. The Indonesian Government is working towards making the country more amenable to investors. This includes opening data centre businesses to total foreign investment. Indonesia also offers tax incentives and skilled resources while working on establishing uninterrupted energy supply and more stable network connectivity.
Without data centres, it would not be possible for e-commerce to thrive. Data centres enable businesses to store, manage and share their data such as Customer Relation Management (CRM) systems, communications, etc. Data centres physically store hardware and software that is needed for these critical applications. Types of data centres include:
- Hyperscale DCs: extremely huge, wholly owned and operated by the company it supports.
- Colocation DCs: owned and managed by a third party who rents out the service.
- Enterprise DCs: built on-site, owned and operated by the company it supports.
- Managed Services DCs: built on-site and owned by the company, but services are managed by a third-party.
- Cloud-based DCs: online, owned and managed by public online providers
- Telecom DCs: owned and operated by telco service providers
To get the ball rolling, incorporate your company with the Trade Register or Company Registry. The most suitable type of company to set up a data centre in Indonesia is one with legal entity status. These need government approvals to operate and are:
- Locally-owned Local Limited Liability Company (Perseroan Terbatas or PT)
- Foreign-owned Limited Liability Company (Perseroan Terbatas Penanaman Modal Asing or PT PMA) and needs a Permanent Business License from the Capital Investment Coordinating Board (BKPM).
All company registration and licensing are done via the Online Single Submission (OSS) system. Upon successful registration, OSS will issue a Business Identification Number (NIB) which allows you to conduct business legally. You will also need to get tax registration done and acquire a tax registration number. This number will be required for licensing purposes.
Data protection and data centres are stringently regulated in Indonesia. Initially, all electronic system operators were obliged to have localised centres for data and recovery. While the law now allows private sector data to be stored abroad, this is in the process of changing again.
The Indonesian Government’s Data Localization laws are constructed to enable better control, avoiding data theft and data breach in the country. Approvals and licenses are numerous and ambiguous. Your best option would be to engage professional consultants, such as 3E Accounting, to ensure a smooth process from start to finish.
An Alliance With Excellence
To set up a data centre in Indonesia can be quite a process-driven endeavour. Regulations on incorporation and licensing are not yet as clearly established as other countries. 3E Accounting has the professional expertise to offer suitable business solutions for all your needs. With a proven track record for success, rest assured that your start-up process is in the hands of dedicated professionals.
Contact 3E Accounting today for professional advice on best business practices and solutions.