managing import company in indonesia · 2. api produsen (api-p) importer identification number for...
TRANSCRIPT
Managing
Import
Company in
Indonesia Collection of articles from Indosight blog
This e-book is a collection of most popular articles picked by our readers and
editors that give a comprehensive overview to a foreign investor or business leader
seeking to start or manage an import company in Indonesia
Read more: www.indosight.com/blog
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Table of Contents
Import licenses in Indonesia ______________________________________________________ 2
API (Angka Pengenal Importir) – Importer Identification Number _______________________ 2
NPIK (Nomor Pengenal Importir Khusus) – Special Importer Identification Number _____ 3
Importing Goods To Indonesia Without Licenses And Incorporating _______________ 4
Import licenses ________________________________________________________________________ 4
Undername importer as a solution _____________________________________________________ 5
Setting Up An Import Company In Indonesia ______________________________________ 7
1# Preparations for establishing import company ______________________________________ 8
2# General registration _______________________________________________________________ 10
3# Licensing specific products _________________________________________________________ 13
Examples of additional requirements for import companies ___________________________ 13
What to avoid when importing goods to Indonesia ____________________________________ 15
The Bottom Line ______________________________________________________________________ 16
EXAMPLE – Mr. Wong’s Cell Phone Import Business ______________________________ 16
Importing Animal Products To Indonesia _________________________________________ 19
What products are classified under animal products? _________________________________ 19
List of licenses required for importing animal products to Indonesia___________________ 20
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Import licenses in Indonesia
In case your business is about importing goods to Indonesia, you will have to obtain
licenses to be eligible to do that. We have a thorough guide on how to set up an
import company.
In this post we explain in more details the different types of import licenses and
how to get them.
API (Angka Pengenal Importir) – Importer Identification Number
In order to be able to import, you will need API. This serves the purpose of keeping
a database of importers and regulating the import activities. There are four types of
API:
1. API Umum (API-U)
General Importer Identification Number.
This type of import license given to a trade company to import goods in order to be
traded in Indonesia.
2. API Produsen (API-P)
Importer Identification Number for producers.
This type of import license given to industrial companies need to import goods for
capital and raw material in order to support operational activities and production.
3. API Terbatas (API-T)
Limited Importer Identification Number. Given to direct investment company to
import goods in order to support production with BKPM facility
4. API Khusus (API-K)
Importer Identification Number for contractor.
Having an API doesn’t make your company automatically able to import goods. For
some commodities to be imported need additional import license or even should
passed some test and get certification from specific departments and ministries.
Below we explain further about special importer identification number.
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NPIK (Nomor Pengenal Importir Khusus) – Special Importer Identification
Number
NPIK or else Special Importer Identification Number is needed if your company
importing one out of 8 the goods below:
Rice
Corn
Soybean
Sugar
Textile and textile products
Shoes and other foot apparel
Electronics and its components
Toys
NPIK can only be obtained if you already hold an API.
The journey of obtaining import license is not stopping until API and NPIK. For
specific goods you need to check in the certain ministries to get recommendation
and certificate.
For example, for all electronic and telecommunication devices, you need to get
certificate from Ministry of Communications and Information Technology. Getting
certificate means that all devices you wish to be imported should be tested in their
laboratory. This also applies to other specific commodities or goods.
We would be more than welcome to assist you figure out what type of licenses you
need for your import.
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Importing Goods To Indonesia Without
Licenses And Incorporating
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Becoming an importer in Indonesia is time consuming and complicated
process. Given the huge domestic demand it can be well worth the struggle.
The good news though- in this article I will tell you about an alternative, legal,
method to get your goods to Indonesia without import license or even
incorporating your company.
Import licenses
According to Ministry of Trade regulation (No.45/M-DAG/PER/9/2009), every
importer in Indonesia must hold General Import License (API-U) or the Producer
Import License (API-P). Notably a company is not permitted to have both licenses,
so you basically need to choose to be either trader or producer.
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Bureaucracy of becoming importer
Many investors we talk with are put off by the extensive bureaucracy involved in
becoming an importer. I recently advised a European food manufacturer who
wants to sell their products in Indonesia. Here is how their process looks like (I skip
some details for the sake of simplicity):
1. Incorporating limited liability company in Indonesia – 10
weeks
2. Permanent business license (IUT) – 1-2 weeks
3. General import license (API-U) - 2 weeks
4. Customs identification number (NIK/SRP) – 1-2 weeks
5. Recommendation form Ministry of Agriculture (Deptan) – ~4
weeks
6. Approval from National Agency of Drug And Food Control –
~3weeks
7. Ministry Of Trade approval – 2 weeks
As you can see, it can take 6 months to become an importer in Indonesia. If you are
lucky, you might need couple of weeks less. But more often than not things in
Indonesia take more time than expected.
So, what if you want to start selling right now and not wait for months to get your
papers done?
Undername importer as a solution
Undername importer is a company that already has the import licenses for the
product you want to bring to Indonesia. Usually their main line of business is freight
forwarding and customs clearance. This means they have experience handling the
entire import-export process and they know exactly how to get goods passed the
customs and to Indonesia.
How it works
It is very simple actually – you have a product you want to send to Indonesia and
undername importer has the license to do it. You pay a certain percentage of the
transaction value to the company as commission.
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Exact commission rates depend on the company and industry, but they should not
be higher than few percentages.
How to find undername importer
There are a lot of companies offering the service in Indonesia, but you need the one
who already has license in your industry. You can try Google as some of them have
basic websites with a contact form.
Second source would be to ask your buyers since they are already in your industry
and might know some importers.
Or you can – self promotion alert – contact us and we will use our network to get an
undername importer for you. Just recently we signed a contract with a huge
electronics manufacturer for the exact same service.
Risks involved using undername importer
The good thing is that you won’t be breaking the law, so no risk regarding that.
Your biggest risk is ending up with wrong company. For example, a company that
(un)intentionally claims to have the type of import license they don’t actually have.
In that case you either just waste time or in worst case have containers stuck in the
Indonesian port.
So be wise when choosing undername importer. Make sure that this company can
give you their client references and know exactly which types of licenses you need.
Note that for different industries the import licenses and approvals required can be
quite different.
That’s it, I hope this article helps you to get your trading business started faster. I
suggest you to use undername importer as a temporary measure and in the same
time start the process of becoming an importer yourself.
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Setting Up An Import Company In
Indonesia inSh are
This article will give an overview for
anyone interested in importing to
Indonesia and starting an import
company.
We will make it simple enough that
anyone without prior background
knowledge can get an idea of how to get
started with import company in Indonesia.
Here are three steps to get your import company started.
Process of setting up an import company
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So let us break it down for you further and go into detail about each step. If you are
not interested in a very detailed description we suggest you skip down to our
fictional example.
1# Preparations for establishing import
company
The Indonesian government has put in place several laws to protect the local
market and entrepreneurs. Because of this, when wanting to start an importing
company you need to have a clear idea what the product(s) will be.
So first things first, this article assumes that you:
-Know what products you will be importing into
Indonesia
There are 21 different sections to classify your products in a government system
that has the dragged out designation of Harmonized Commodity Description and
Coding System. We will call it the System of Classification for short, and one
company can only declare one section on this list. So yes, if you want to import
products from a different section, you need to establish another legal entity.
“One company can only have license for one product section”
The System of Classification is also the basis of the import customs tariff for
Indonesia. The tariffs are changed every few years and rates can be checked on the
Directorate General of Customs and Excise website.
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-Meet the requirements of the Negative Investment
List
The negative investment list gives specific sectors or types of business that cannot
be owned by non-Indonesians. Foreign citizens are only allowed to have shares in
limited liability companies (PT PMA) and certain types of businesses also have
restrictions as to the percentage of foreign ownership.
Fortunately trading companies – regardless of the products they are handling – can
almost all be owned fully by foreign citizens.
For an overview of what are the restrictions to foreign ownership and if your
potential business is on the Negative Investment List go see Indosight’s article on
the subject.
photo credit
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2# General registration
1. Get approval for Investment license and register
a Foreign Direct Investment (PMA) Limited Liability
(PT)
- For this step, you first need to make sure you meet the requirements for minimal
capital for setting up a company.
While a 10 billion IDR investment plan and 25% (but min. 300,000) of paid up capital
are required by law, in reality you will not be asked for a payment slip or a
statement from your bank. All you need is the statement letter from the
notary during the registration process.
To clear up some of the questions you might have about the subject we have
written an article and made a short video. Make sure to check out the comments
under these to see if others have had similar problems or questions that you might
currently be facing.
- Secondly, make sure that required documentation has been gathered before
filling applications.
We are not going to list all the documents required in each sub-step of registering a
company because this article means to provide a quick overview. However, it is
important to remember that it saves time and money to be ahead of the
bureaucratic process and try to have documentation ready for your next
application.
To establish a Foreign Direct Investment Limited Liability (PT PMA) company you
need the following:
1. Investment Coordination Board Principal License / Approval to your investment
2. Notary Article of association
3. Ratification from Ministry of Justice
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4. Domicile Letter from local government
5. Tax registry and Tax Card
6. TDP (business registry to local trade department)
2. Get a Permanent Business Permit (IUT)
This is issued by the Investment Coordinating Board and can be applied for only
when your company is ready to operate.
For example, during the application for getting an IUT, a distributor company needs
to present a copy of office and warehouse agreement to the Investment
Coordination Board. A documented location will be included to the Investment
Coordination Board Principal License and Notary Deed of Establishment.
Virtual offices are acceptable option for getting the domicile letter but they are
mostly available in Jakarta. Indosight consultants can help you with the virtual
office.
3. Register a General Importer Identity Number
(API-U) or a Producer Importer Identity Number
(API-P) at the Investment Coordinating Board
So an importing PMA PT needs to specify what type of product it will be dealing
with. Again, for one company you are assigned one API-U or API-P and that
particular company can only deal with that type of product.
Importation without an API can only be done after obtaining approval from the
Director of Import in the Indonesian Minister of Trade. Permission is only granted
for certain goods and/or infrequent importation, such as temporary importation,
promotional goods, goods for research and development purpose, self-consumed
goods (not for trading purposes), etc.
An API-U/P has to be renewed every 5 years.
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4. Customs Identification Number (NIK) at the
Directorate General of Customs and Excise (DGCE)
To enable fulfilling customs obligations, an importer company must register with
the DGCE to obtain NIK and it will remain valid unless it is cancelled by the DGCE.
An importer’s NIK may be blocked by the DGCE in case:
- no customs activity is performed in a consecutive 12 month period;
- a change in data goes unreported to the DGCE;
- importer is under investigation related to customs issue; or
- the business licence of the importer has expired.
This is the end of the second step and after completing this, a company is entitled
to apply for specific products to be brought into the country.
photo credit
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3# Licensing specific products
The Ministry of Trade has the assignment to oversee and guarantee the quality of
products coming into the country. To get licences for your products you need to
classify your merchandise from their System of Classification list, as mentioned
before. At this stage however, you need to be more specific and find your product
from product code (HS) list .
For example if you want to import cell phones, you would search for ‘phone’ on the
product code list. This will tell you that the HS code for ‘telephones for cellular
networks’ is 8517120000 and possibly up to 7 different types of licences for import
are needed.
The Ministry of Trade will require you to launch licence applications for the
appropriate codes for import before your products can be brought to Indonesia
and through customs.
Examples of additional requirements for
import companies
The variety of products that can be imported to Indonesia is vast and the area is too
heavily regulated for most nuances to be explored in our short article. We can
however include some relatively common issues that we have come into contact.
Advice one – Product Conformity Assessment
Be aware of the products subject to the Product Conformity Assessment (PCA)
requirements – these will involve pre-shipment inspection of the goods.
Importers can benefit from a faster customs clearance process because verification
activities have been completed prior to shipment. In addition, they do not risk
having their goods rejected because of non-compliance with requirements.
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Advice Two – Special Importer Identification
Number (NPIK) and Registered Importer Number
(ITPT)
Importation of certain products requires the importer to have the NPIK or the ITPT.
Companies that import commodities such as rice, electronic products, sugar, corn,
soybeans, toys, footwear, and textiles should obtain NPIK.
ITPT is required for electronic products, ready-made garments, toys, footwear, food
and drink products, cosmetic products, and traditional and herbal medicines.
These two become important not in the general registration step, but when starting
to import specific products.
Advice Three – storage charges
Cargo shipped to Indonesia that cannot be imported promptly will incur storage
charges, and perhaps fines. The consignee maybe left with no choice but to
abandon the cargo.
‘Cargo shipped to Indonesia that cannot be imported promptly
will incur storage charges, and perhaps fines’
To avoid this, double check to make sure all procedures, which need to be followed
prior to your merchandise reaching Indonesia, are complete. This is meant as a
general warning due to the multitude of different bureaucratic procedures that
different products incur.
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What to avoid when importing goods to
Indonesia
Avoid spending extra time and energy – it might be possible to skip almost the
entire described process.
There are ways you can have legal presence in Indonesia as an importer under
certain conditions without starting a PMA PT or possibly even carry out importing
activities without licenses and incorporating.
Advice one – use an undername importer
You might be able to use an undername importer that already has a license for the
product you want to import. They usually know the ins and outs of getting your
product to the country and through customs.
This option would however only be wise if you going to be importing to Indonesia
for a few times or are in a hurry.
There are some dangers involved in using an undername importer and we
recommend that you read Indosight’s article on the subject.
Advice two – open a representative office
If your company wants to test the market before the registration process, it is
possible to open a representative office. This is the fastest way to get legal presence
in Indonesia, although there are certainly more limitations on a representative
office as opposed to a PMA PT.
As always, we have more detailed information for you in an article on the benefits
and downsides of a representative office in our blog.
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The Bottom Line
In case you find that establishing a PMA PT import company is what works for
you,time and cost are likely to be the two key aspects.
Unfortunately, we cannot estimate an approximate cost that would be universal in
any sense of the word. The specifics of product licenses alone can differ hugely in
terms of price. The registration and licencing procedure needs to be looked at as a
whole before any price quotes can be made. Be careful with consultancies that tell
you different.
In terms of time, we estimate that setting up a PMA PT import company can take 6
months and getting specific licences for products can take upwards of 2 months. So
8 months would be the optimal time as limited by the official bureaucracy in
Indonesia.
We admit that 8 months can seem long, however it should not be a big deterrent
asrewards can be huge in this booming consumer country.
EXAMPLE – Mr. Wong’s Cell Phone
Import Business Now, let us take a theoretical example of the time and financial costs that a specific
importer can face when starting a company with us.
So our fictional character is Mr. Wong – he wants to import two specific types of cell
phones to Indonesia.
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photo credit
After a discussion with our consultants, he will have an overview of the upcoming
process, which will look something like this :
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In the case that Mr. Wong decides to use Indosight to start his company in
Indonesia, he will send us a list of required documents and we will go through the
bureaucratic process on his behalf.
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Importing Animal Products To Indonesia
In this article we’ll go more into details with one of the most challenging products –
importing animal products to Indonesia.
First of all, do not try to import anything to Indonesia without an import approval
(PI). Unless you have good ties in the Indonesian customs this will have only two
possible outcomes:
1. The goods become the property of Republic Of Indonesia
2. Goods need to be re-exported
Every week we get emails from foreigners who were not aware of it and
unfortunately there’s not much that can be done once the goods are already stuck
in customs. So play safe and get license first or use an undername importer who
has the right license (remember the one company one classification rule that
applies since this year).
What products are classified under animal products?
Any product derived from animals will be an animal product. Most common ones
are all sorts of meat, milk, yoghurt, whey, butter, dairy spreads, ghee, cheese, eggs
and many more. Consult Indosight in case you are not sure what is your product
classification.
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List of licenses required for importing animal products to Indonesia
Needless to say, importing animal products to Indonesia is not the easiest thing to
do in this country. But all of the hassle might be well worth it once you get all your
documents in order and enjoy the benefits of Indonesia’s optimistic consumers.
The list of licenses you are required to obtain:
API-U (general importer identification number)
NIK (
IT-Produk Hewan Olahan
PI (import approval)
Let’s see how to get all of those licenses.
Incorporate import/trading company first
In order to be able to apply for import licenses, you will need to have a company in
Indonesia that has importing or trading stated as its activities. In case you don’t
have one yet, start as soon as possible because it will take around 8-10 weeks to get
company registered. Here’s our company registration service.
API-U and NIK
Once your company is set up, you will need to obtain API-U (general importer
identification number) and NIK (customs identification number). Since in this article
we talk about importing animal products, getting those licenses will however not be
sufficient and you need to be registered as importer of animal products (IT-Produk
Hewan Olahan).
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Image credit
Becoming importer of animal products (IT-Produk Hewan Olahan)
Becoming an importer of animal products is a very bureaucratic process (or you
might ask what isn’t bureaucratic in Indonesia?). Here are the documents you need
to prepare for your application:
1. All company’s legal incorporation documents
2. Request Letter
3. Proof of ownership of: Cold Storage
4. Proof of ownership of: Transporter with cold storage
5. API-U and NIK
If you could take only one thing out of this article then take this – fulfill ALL of those
requirements and you will be fine. Often foreign entrepreneurs find some of those
criteria ridiculous and try to find ways around them. It’s not a good idea and will
only delay the whole process. Be prepared from the beginning.
Import approval (PI)
Prior to every shipment you will need to get approval EVERY TIME from Ministry of
Trade. In order to receive it, you’ll need the following:
1. Letter of request
2. Import plan for 6 months
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3. Recommendation from Agricultural Ministry (Dirjen Peternakan dan Kesehatan
Hewan)
4. Recommendation from BPOM (Direktur Inspeksi sertifikasi Pangan) (We can help
you get no. 3 and 4)
5. All company incorporation documents
6. API and NIK
7. IT – Produk Hewan
That’s it – I hope this was structured enough to give you an idea of what you will
need to go through to start importing animal products to Indonesia. If you need
assistance, we’ll be happy to help you with both setting up the company and
obtaining import licenses.
Contact us also if you have any other products you want to import. Remember –
you can save a lot of time and money by being well prepared prior to your first
shipment.
Featured image credit