Video-streaming service provider Netflix Inc said subscribers will, in a few weeks, no longer be able to use proxies to watch content not available in their home country. (Reuters Photo/Steve Marcus)

Jakarta. A week after Netflix launched its online service in Indonesia, Minister of Communications and Information Technology Rudiantara says that the video-streaming company must obtain a license as a permanent business establishment in order to legally operate in the country.

"[Netflix] must become a permanent business establishment in Indonesia, as it operates in Indonesia," the minister said on Tuesday, as quoted by Kompas.com, a local news portal.

To do that, the company would need to apply for a license known as or BUT (Badan Usaha Tetap).

If Netflix wants to obtain a BUT, the company must obey local regulations, such as opening an office and hiring employees. Furthermore, it must also obey tax regulations, which means every transaction with Netflix in Indonesia will be taxed.

According to Kompas.com, the obligation to have a business license also applies to other over-the-top Internet-based services, such as Google and Facebook.

These permanent businesses are required to pay corporate income tax and value added tax for every transaction made in Indonesia.

Netflix's video-streaming service went live in more than 130 countries, including Indonesia, last Wednesday as chief executive Reed Hastings aimed to counter slowing growth in the US.

Indonesian users can choose from three monthly subscription plans on Netflix, with the basic plan priced at Rp 109,000 ($8) per month.