ANNOUNCEMENT 12 Jan 2016In January 2016, the government of Indonesia announced altered domestic business conditions for foreign investors.
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On 12 January 2016, after the American company Netflix announced it would enter the Indonesian market, the Indonesian Minister of Information announced in the media that the company will be required to apply for a license as a permanent business establishment in the country ("Badan Usaha Tetap", BUT).
This requirement implies that Netflix will need to open up an office in the country, employ Indonesian staff and pay Indonesian taxes.
Earlier, on 8 January 2016, the Minister was quoted saying "We must study further the implications of Netflix for the Indonesian public (..) If the disadvantages outweigh the advantages, then something must be done to fix that. We have to study the Netflix entrance carefully as we do not want to hinder technology for the sake of the public".
On 19 January 2016, the Indonesian Ministry of Communication and Information Technology announced Netflix has one month to obtain the BUT license as well as a license as a content provider.
On 27 January 2016, the state-owned telecommunications company Telkom Indonesia (140 million customer base) blocked the Netflix services to its customers. Telkom's head announced in the media that "We block Netflix because they don't have the permit to operate and many of their contents are forbiddenin Indonesia. We must give them an example o f doing the business in Indonesia. (...) Netflix is working with local operators in foreign countries, why not here? A partnership with a local operator will be beneficial for both parties.
"Us blocking Netflix will not affect our customers, Netflix still has a small presence in this country, so we are teaching them how to follow our regulation".
Later that day, the government proposed to lift the block, if Netflix would engage in a partnership agreement with the telecommunications company.