INVESTMENT IN BLOCKCHAIN, ARTIFICIAL INTELLIGENCE (AI), AND INTERNET OF THINGS (IOT)

Business activities related to Blockchain, Artificial Intelligence (AI), and Internet of Things (IOT) were not listed on the Indonesian Standard Business Classification (KBLI) version 2017 but, they are now admitted in KBLI version 2020. Under Government Regulation No. 5/2021 on Risk-Based Licensing (GR 5/2021) all of these business sectors are stipulated as Medium-low risk, which require only a Business Registration Number (NIB) and completion of certain standards stipulated by Government.

The foreign investment in these business sectors requires the minimum amount of more than Rp 10 billion excluding value for land and building, except if (i) they are conducted in a Special Economic Zone (Kawasan Ekonomi Khusus/”KEK”) and (ii) engaged in tech-based startups.

Definition under KBLI version 2020

1. Blockchain business activity is listed under KBLI No.62014 and described as blockchain technology development, such as activity of smart contract application, designing of  public and private blockchain infrastructure. This group does not include commodity futures trading of crypto asset (6615).

2. Programming activity on Artificial Intelligence (AI) is listed under KBLI No.62015 and described as consulting followed by analysis and programming utilizing AI technology including AI subset such as machine learning, natural language processing, expert system and other AI subsets.

3. Internet of Things (IoT) activity is listed under KBLI No.62024  and described as activities of consulting, designing and making an integrated system solution based on order  (not ready to use) by modification of hardware such as censors, microcontrollers and other hardware. Such modification is carried out on the IoT’s hardware and/or software implanted inside it. This group does not include activity of manufacturing chip (26120) and development of IOT software (58200 and 62019).

Business License Requirements

Based on GR 5/2021 and the Ministry of Communication and Informatics Regulation No.3/2021 on Standards of Business Activities and Products on Postal, Telecommunication, Electronic System and Transaction Sectors, in order to conduct the business activities mentioned above, some requirements below should be fulfilled.

1. The Blockchain business activity:

   a. To submit to the Ministry of Communication and Informatics (“MOCI”) the roadmap of the development of the blockchain
       technology, including its application to business activity
   b. At least to have 1 expert/professional  in accordance with SKKNI (the Indonesian National Work Competency Standard
      /Standar Kompetensi Kerja Nasional) under category of computer programming and/or IT security certification and
      personal data protection
   c. To submit annual report regarding business activities  to MOCI
   d. To follow international standards ISO 22739:2020 (blockchain and distributed ledger technologies) 

2. The Artificial Intelligence business activity:

   a. To make and apply internal policy regarding data and internal ethics of AI
   b. To publish innovation and development of AI to public through activities, demo or events accessible to public
   c. To submit annual report regarding business activities to MOCI 
   d.  
At least to have 1 expert/professional  in accordance with SKKNI  under category computer programming, computer
       consultation, and activities related to data science

3.  The Internet of Things (IOT) business activity:

    a. At least to have 1 expert/professional  in accordance with SKKNI  under category of IO
    b. To submit annual report regarding business activities  to MOCI 

 

Disclaimer: This article is intended as general information only and it does not constitute a legal advice. We accept no responsibility for any loss that may arise from reliance on this information. Please contact us if you need full legal advice.

 

Business activities related to Blockchain, Artificial Intelligence (AI), and Internet of Things (IOT) were not listed on the Indonesian Standard Business Classification (KBLI) version 2017 but, they are now admitted in KBLI version 2020. Under Government Regulation No. 5/2021 on Risk-Based Licensing (GR 5/2021) all of these business sectors are stipulated as Medium-low risk, which require only a Business Registration Number (NIB) and completion of certain standards stipulated by Government.

The foreign investment in these business sectors requires the minimum amount of more than Rp 10 billion excluding value for land and building, except if (i) they are conducted in a Special Economic Zone (Kawasan Ekonomi Khusus/”KEK”) and (ii) engaged in tech-based startups.

 

Definition under KBLI version 2020

1. Blockchain business activity is listed under KBLI No.62014 and described as blockchain technology development, such as activity of smart contract application, designing of  public and private blockchain infrastructure. This group does not include commodity futures trading of crypto asset (6615).

              

2. Programming activity on Artificial Intelligence (AI) is listed under KBLI No.62015 and described as consulting followed by analysis and programming utilizing AI technology including AI subset such as machine learning, natural language processing, expert system and other AI subsets.

 

3. Internet of Things (IoT) activity is listed under KBLI No.62024  and described as activities of consulting, designing and making an integrated system solution based on order  (not ready to use) by modification of hardware such as censors, microcontrollers and other hardware. Such modification is carried out on the IoT’s hardware and/or software implanted inside it. This group does not include activity of manufacturing chip (26120) and development of IOT software (58200 and 62019).

 

Business License Requirements

Based on GR 5/2021 and the Ministry of Communication and Informatics Regulation No.3/2021 on Standards of Business Activities and Products on Postal, Telecommunication, Electronic System and Transaction Sectors, in order to conduct the business activities mentioned above, some requirements below should be fulfilled.

 

1. The Blockchain business activity:

a.       To submit to the Ministry of Communication and Informatics (“MOCI”) the roadmap of the development of the  blockchain technology, including its application to business activity

b.      At least to have 1 expert/professional  in accordance with SKKNI (the Indonesian National Work Competency Standard /Standar Kompetensi Kerja Nasional) under category of computer programming and/or IT security certification and personal data protection

c.       To submit annual report regarding business activities  to MOCI

d.      To follow international standards ISO 22739:2020 (blockchain and distributed ledger technologies)

 

2. The Artificial Intelligence business activity:

a.       To make and apply internal policy regarding data and internal ethics of AI

b.      To publish innovation and development of AI to public through activities, demo or events accessible to public

c.       To submit annual report regarding business activities to MOCI 

d.      At least to have 1 expert/professional  in accordance with SKKNI  under category computer programming, computer consultation, and activities related to data science

 

3.  The Internet of Things (IOT) business activity:

a.       At least to have 1 expert/professional  in accordance with SKKNI  under category of IOT 

e.      To submit annual report regarding business activities  to MOCI 

 

 

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