Jakarta. If Indonesia wishes to be a tech investment magnet, Jakarta needs to ensure smooth and safe cross-border flow of data, according to an American business advocacy group.

Marc Mealy — the executive vice president of research and chief policy officer at the US-ASEAN Business Council — recently spoke with the Jakarta Globe on Indonesia’s investment opportunities. Mealy admitted that Indonesia is home to “some of ASEAN’s most important startups”. But to American companies, the decision to invest in a foreign country’s information and communications technology (ICT) sector hinges on the “regulatory piece”.

“Governments around the region are trying to put in place things like data localization requirements and keeping certain data in a country’s jurisdiction,” Mealy told the Globe in Jakarta.

“The best way is to actually do both, where you are promoting innovation, and also you are allowing data to flow across borders safely. This is the ecosystem that will be most successful in attracting the [ICT] investments,” Mealy said.

Indonesia’s concessions under the upcoming US tariff deal include Jakarta agreeing to address barriers impacting digital trade and investment. According to a preliminary document published mid-July 2025, Jakarta has committed to providing certainty surrounding cross-border personal data transfer to Washington. The clause immediately precipitated public outcry. Communications Minister Meutya Hafid said at the time the pact would “provide legal basis for personal data protection of Indonesians who use American digital services” in an attempt to placate the angry public. She listed examples of legitimate data transfer activities, including those taking place in Google, Bing, WhatsApp, and Amazon.

“The cross-border personal data transfer is allowed if it is for legitimate, limited, and legally justifiable purposes,” Meutya said in late July 2025.

The 2022 Data Protection Law will act as the legal framework for such transfers. The law demands that the US have a regulatory framework that is at least on par with what Jakarta has. 

Indonesia reported that it had amassed nearly $3 billion in US investment throughout 2025, with the lion’s share of the money, or about $2.2 billion, going into the mining sector.

As the calendar flips, US firms are also waiting in anticipation for the ASEAN Digital Economy Framework (DEFA) set to be signed within this year. The regionwide pact covers cross-border data flows, electronic payments, and digital identities, among others. Estimates show that the agreement will double ASEAN’s digital economy to $2 trillion by 2030.

“If ASEAN members can do that [DEFA] this year, that will be a potential, further game-changer to make this part of the world [Southeast Asia] the place that all the digital companies want to do business with,” Mealy said to the Globe.