This post is also available in: Indonesia (Indonesian)
A Guide to the Import and Export Process in Indonesia as an Investor
Whether you’re a local or foreign company in Indonesia, if you plan to do business, you need to understand the import and export regulations and processes in the country.
A foreign company is known as a PMA here. If a foreign company (or a local one) plan to send their goods overseas, they will need to abide by the local regulations in the country. The provisions of doing business in Indonesia are primarily within the following documents:
- Law No. 17 of 2006 on Amendment to Law No. 10 of 1995 on Customs.
- Minister of Finance Regulation No. 145/PMK.04/2007 on Customs Provisions for Exporting.
- Minister of Finance Regulation No. 148/PMK.04/2011 (the amendment to the provision above).
- Several Directorate General of Customs and Excise regulations.
What You Need to Know About Exporting
The export regulations stipulate that you need a taxpayer identification number (NPWP) before you can proceed. You will also need one of the following licenses for your business:
- Manufacturing license from the Ministry of Industry, or other licenses issued by the relevant authority.
- Trade license (SIUP) from the Ministry of Trade.
- Exporter identification number (APE).
- PMA license issued by the Investment Coordinating Board (BKPM).
You must also determine if your goods are eligible for export. The industry-specific type of products that can be exported can be found in the Minister of Trade Regulation No. 97/M-DAG/PER/12/2014 on Export Provisions for Forestry Products as an example. It is important to check this because there could be a restriction quota or restrictions that prohibit a certain type of product from being exported.
The export regulations in Indonesia also states that all exported items must have a Pemberitahuan Ekspor Barang (PEB). This must be submitted to the Customs and Excise Office. There will be several documents that must be submitted to the relevant technical bodies involved too. The documents must be available when required to obtain your final approval. Your PEBs must be submitted at least seven days before your scheduled export.
Financing services are available for businesses that want to export their good. Financing is available from the Indonesia Eximbank or Lembaga Pembiayaan Ekspor Indonesia (LPEI). Financing for risk management is available from the Asuransi Ekspor Indonesia.
Some exported goods will be subject to a mandatory inspection physically before it departs the country. It is very important to understand that there could be legal consequences if these regulations and processes are not complied with. For example, failure to provide a PEB can carry a sentence of up to 10 years in prison and a fine of 50 million – 5 billion IDR.
What You Need to Know About Importing
As with exporting, you must obtain a Customs Identification Number (known locally as a NIK) before you can import goods into the country. This number will be assigned by the Directorate General of Customs and Excise. Besides your NIK, you will also need an Importer Identification Number (Angka Pengenal Import, API). Your API is your database record for your activities.
Three types of licenses are available for the import sector:
- API-U (General Import License).
- API-P (Producer Import License).
- Limited Import License (API Terbatas (API-T).
These licenses are only limited to a certain industry. You cannot import goods that are not related to that sector. When importing into the country, you need the following documents:
- Commercial invoice.
- Packing list.
- Import permit.
- Bill of lading.
- Certificate of insurance.
- Customs import declaration.
- Truth Examination Report (if receiving products from the Bapeksta facility or subject to PE (Export Tax) or PET (Export Supplemental Tax).
The import tariffs in the country will vary. It can be anywhere from 0-170%. It would depend on your item and how much of the goods are imported into the country. Unless your goods are considered essential, you will be subject to an import sales tax at the entry point.
Need Legal Advice?
We’re here to help. If you’re not sure about the regulations and processes in Indonesia when it comes to imports and exported goods, we’ve got the insight that can assist. For more information about our services, contact the 3E Accounting team today.