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
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 |
purchase order, packaging list, commercial invoice, bill of lading, and any other licenses or permits as needed. |
| 2 | Acquire your NIB (Single Business Number) |
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| 3 | Acquire your SIUP (Business Permit for Trade) |
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| 4 | Acquire your NPWP (Taxpayer Identification Number) |
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| 5 | Employ the services of a customs broker |
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| 6 | Complete your import declaration |
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| 7 | Pay your import taxes and duties |
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| 8 | Complete customs clearance and receive your shipment |
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| 9 | Adhere to post-importation obligations |
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| 10 | Consider professional support if necessary |
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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.
Guide to Doing Business in Jakarta
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.
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
- Import facilities
Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production. - Tax holiday
The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status. - Tax allowance
For companies in certain designated areas or regions, the government may provide the following tax concessions:
Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
Accelerated depreciation and/or amortisation deductions
An extension of tax losses carried forward for a maximum of ten years
A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
The applicant eligible has to meet high-level-criteria for the above tax facilities:
High investment value or for export purposes
High manpower absorption
High level of local content - Investment allowance
The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project. - Super deduction
This facility could be granted to certain businesses, such as:
60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia. - Entities gathering funds from the public (e.g., banks, insurance companies)
- Entities issuing debt instruments
- Publicly listed companies
- State-owned enterprises
- Companies with assets and/or turnover exceeding IDR 50 billion
- Entities mandated by legislation
The investment requirement for PMA companies in Indonesia varies based on their classification under the Indonesia Industrial Standard Classification (KBLI). Generally, a minimum investment of IDR 10,000,000,000 (ten billion Indonesian Rupiah), excluding investment in land and buildings, is needed to conduct one business activity in one location.
A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.
Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.
Audited financial statements are required for:
It is advisable to make a minimum paid-up capital deposit after the company completes its establishment process. Another option is after the company receives the Articles of Association and Deed of Establishment.
