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Navigating the landscape of Indonesian imports

Navigating the landscape of Indonesian imports

Indonesia imports play a crucial role in economic development. The industry facilitates access to essential goods and fosters international trade for better and sustainable economic growth.

However, navigating the import process in Indonesia can be complicated. Investors need a thorough understanding of the applicable regulations and procedures before optimizing their business operations in the said circumstances.

Key regulations for importing to Indonesia

Indonesia’s new Omnibus Law marks a significant step towards business reform. Government Regulation No. 29 of 2021 grants the Ministry of Trade (MoT) the authority to streamline import-export activities by issuing approvals, verifications, obligations, and licenses.

The regulation also simplifies the process for importers and exporters to obtain business licenses. Now, only a Business Identification Number (NIB) is required through the Online Single Submission (OSS) system.

Previously, businesses had to navigate through different types of import licenses, but now the NIB covers all necessary authorizations, including API-U, API-P, and API-T licenses.

Types of prohibited and restricted goods

Some products are subject to import regulations based on the Restricted and Banned Goods List, also known as the “LARTAS list.”

Indonesia’s Ministry of Trade Regulations 18 (MoT Regulation 18/2021) provides an updated list of goods that cannot be imported to or exported from Indonesia.

The regulation introduces new categories of prohibited import goods, including:

  • finished hand tools
  • sugar
  • ozone-depleting substances
  • certain drugs and foods
  • hazardous and toxic materials, among others

Categories of goods prohibited for export include:

  • scrap metal
  • cultural heritage goods
  • subsidized fertilizers
  • mining products
  • forestry
  • certain agriculture products

Read more: Navigating import duties and taxes in Indonesia

Documentation and licenses

Indonesia imports: requirements and regulations

Importing goods into Indonesia necessitates various licenses and permits to ensure compliance with the country’s regulations. Those are:

Importer Identification Number (API)

To facilitate the import process, you’ll need an API to manage a database of importers and supervise import activities. There are four distinct types of API:

  • General Importer Identification Number (API-U)
  • Importer Identification Number for Producers (API-P)
  • Limited Importer Identification Number (API-T)
  • Importer Identification Number for Contractors (API-K)

Special Importer Identification Number (NPIK)

The Special Importer Identification Number, or NPIK, is crucial for importing specific goods such as rice, corn, soybean, sugar, textiles, footwear, electronics, and toys. To obtain an NPIK, you first need an API (Importer Identification Number).

The process of importing goods into Indonesia

Step Description Additional Notes
1 Determine your product and gather your paperwork
  • Ensure your product isn’t subject to any import restrictions or prohibitions.
  • Identify your products’ relevant HS code (Harmonized System code).
  • Collect all essential documents, including: 

purchase order, packaging list, commercial invoice, bill of lading, and any other licenses or permits as needed.

2 Acquire your NIB (Single Business Number)
  • The NIB is compulsory for all businesses importing goods into Indonesia.
  • Register for your NIB conveniently via the Indonesia Investment Coordinating Board (BKPM) website.
  • The registration procedure is cost-free and can be finalized in just a few minutes.
3 Acquire your SIUP (Business Permit for Trade)
  • The SIUP is obligatory for all businesses involved in trading operations in Indonesia.
  • Apply for your SIUP conveniently online via the Ministry of Trade (Kemendag) website.
  • The application process incurs a fee and may require up to 5 working days.
4 Acquire your NPWP (Taxpayer Identification Number)
  • The NPWP is a compulsory requirement for all businesses operating in Indonesia.
  • Register for your NPWP conveniently via the Direktorat Jenderal Pajak (DJP) website.
  • The registration process is free and can be completed within minutes.
5 Employ the services of a customs broker
  • A customs broker is a certified expert who can aid you in the customs clearance process.
  • They can assist you in preparing essential documentation and navigating customs regulations and requirements.
  • Their services are especially beneficial if you need to become more familiar with the import process or lack the time and resources to manage it independently.
6 Complete your import declaration
  • An import declaration is a formal document containing details about your shipment, including information about the importer, exporter, product description, quantity, and value.
  • You can submit your import declaration digitally via the Indonesia Customs and Excise (DJBC) website.
  • This submission process involves a fee and can typically be finalized within a few minutes.
7 Pay your import taxes and duties
  • All goods brought into Indonesia are subject to import taxes and duties.
  • The specific amount of these taxes and duties is determined by the HS code assigned to your product and its country of origin.
  • You can digitally make your import tax and duty payments via the DJBC websites.
  • This payment process typically involves a fee and can be finalized within a few minutes.
8 Complete customs clearance and receive your shipment
  • After your import declaration is successfully processed and import taxes and duties are settled, you can clear customs and retrieve your shipment.
  • Present your customs clearance documents to the customs officer at the designated port of entry.
  • Upon verifying your documentation and ensuring everything is in order, your shipment will be released for collection.
9 Adhere to post-importation obligations
  • Following the importation of your goods into Indonesia, there might be supplementary obligations that must be met.
  • These obligations can differ based on the nature of the imported goods.
10 Consider professional support if necessary
  • Consider seeking professional support if you need to become more familiar with the import procedures or lack the time and resources to manage them independently.
  • Custom brokers and freight forwarders can offer the expertise to facilitate a seamless and compliant import process.

Customs clearance and duties

Customer clearance is an administrative process for sending or releasing goods from a cargo area. Simply put, it’s the process of unloading goods related to customs or government administration. The steps include the following:

Pre-clearance (Initial stage)

Pre-clearance is the initial administrative process in customs clearance for goods. Two main aspects of importing goods are legality processes and import restrictions (LARTAS).

Clearance

The second stage is the clearance process, which consists of three main steps: customs notification, tax payment, and goods release.

Post-clearance

The final stage is post-clearance, which occurs after completing the first and second stages. It occurs before the release of goods.

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Streamline your imports with InCorp Indonesia

Importing into Indonesia can be a simple maze. InCorp Indonesia takes the hassle out of the process with our comprehensive import solutions:

  • Import licenses: We help you obtain the necessary permits to import your goods and avoid delays legally.
  • Importer of record: We act as your official importer, ensuring compliance with local regulations and minimizing risk.

Ready to simplify your imports? Contact our experts today, and let’s discuss your needs.

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    Pandu Biasramadhan

    Senior Consulting Manager at InCorp Indonesia

    An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Frequently Asked Questions

    Under Indonesian Company Law, shareholders can hold shares with various preferential rights, such as voting rights, nomination rights for board members, priority dividend or liquidation proceeds, and options for conversion or withdrawal after a set period.

    You will need to register your products with the BPOM (National Agency of Food and Drugs) and MoH (Ministry of Health) before you can distribute them in Indonesia. It can only be registered with an Indonesian legal entity. Your local distributor will register your product in Indonesia under their entity and become the license holder if you distribute via the entity you choose.

    Indonesian Company Law establishes a two-tier governance system with Directors managing day-to-day operations and representing the company, while the Board of Commissioners supervises and advises them. The articles of association may empower board of Commissioners to provide consent or assistance to Directors for specific legal acts.

    Yes, submitting monthly and annual tax reports is mandatory even if your company does not have any business activities, thus owing zero taxes.

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