Social networking giant Facebook has received an in-principle approval to set up a domestic unit in Indonesia and the government is now processing the details, the country’s investment chief said on Wednesday (21/06).
Indonesia has been pushing multinational technology firms to be locally incorporated, arguing that companies such as Alphabet’s Google set up small business entities to provide “auxiliary” services and get away with minimal taxation, while booking most of their revenue from the country elsewhere.
Facebook currently operates in Indonesia through an office in central Jakarta.
“I see good intention and spirit from Facebook,” said Thomas Lembong, chairman of the Investment Coordinating Board (BKPM).
“What we care about are taxes and responsible content.”
The investment board and the communications ministry are currently looking at the type of business unit that Facebook will establish, Thomas said.
There are several ways to be locally incorporated in the country, including setting up a limited liability company, locally known as a PT (Perseroan Terbatas).
Facebook did not immediately respond to a request for comment.