Facebook gets Indonesia nod for local unit, country's investment chief says

FILE PHOTO: Facebook logo is seen at a start-up companies gathering at Paris' Station F in Paris, France, January 17, 2017. REUTERS/Philippe Wojazer/File Photo

JAKARTA (Reuters) - Social networking giant Facebook Inc 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.

Indonesia has been pushing multinational technology firms to be locally incorporated, arguing that companies such as Alphabet Inc’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 Indonesia’s investment coordinating board. “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, Lembong 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.

Reporting by Cindy Silviana and Eveline Danubrata; Editing by Himani Sarkar