Everything You Need to Know about Setting Up an Import Company in Indonesia

Setting up a trading and/or an import company in Indonesia should not be overwhelming. As long as you get help from the right party, setting up an import company will be easier. They will help you to understand the requirements you need to comply and the processes you need to follow.

Again, we will try to make things simple on how to establish an import company in Indonesia. We will give you a complete overview on the process.

Step No.1: Map out preparations on establishing your import company

Luckily, non-Indonesians can fully own import companies, regardless of the products they will be trade.

>Obviously, Indonesian government has set out several laws to protect the local market and entrepreneurs. As such, when planning to put up an importing company in Indonesia, it’s critical to have the list of products you will be importing clearly outlined beforehand as the country has around 21 different sections of production classification.

Note that in Indonesia, one company can only have one license for one product section, which means that if you should establish a different legal entity for every product you intend to import that falls under a different section. This means you may want to set up another entity (a child company) to import another product.

The Harmonized Commodity Description and Coding System, or the Harmonized System (HS) for short, also serves as the basis of the country’s import customs tariff that are changed every after few years. The system is also a critical stage you need to consult before determining your product’s classification, import duty, or for checking if there are any restrictions.

Next step: Check the requirements of the Negative Investment List by providing the HS Code or the description of the product, depending on the sector or nature of business that you’re in and make sure to comply with those.

To get more information, you can read in Indonesia National Single Window

Step No.2: Register your business

After meeting the requirements for the least capital for establishing a company, which is US$250,000 you may now acquire approval for Investment license  and process the foreign direct investment limited liability (PT PMA)registration for your business.

By law, you have to pay 25% of your US$1 million investment plan as the minimum capital payment. In reality, presenting a statement letter from the notary will be enough to proceed with the registration process.

Being one step ahead of the country’s bureaucratic process definitely saves your time, money, and effort.

You will need to prepare the following documents to set up a PT PMA company in Indonesia:

• An approval on your investment or principal license from the Investment Coordination Board
• Notary article of association
• Ratification from the Ministry of Justice
• Domicile letter from local government
• Tax registry and tax card
• TDP (business registry to local trade department)

Next up, when your company is ready to operate, apply for a permanent business permit (IUT) from the Investment Coordinating Board (BKPM). BKPM will requires you to present a copy of your office & warehouse agreement, record of your location for submission to the Notary Deed of Establishment, and the principal license from BKPM.

For virtual offices, you will need a domicile letter from the local government where you will be operating. Cekindo and its staffs of professional consultants will be able to help you with these requirements for virtual offices.

Back at the Investment Coordinating Board, you will now have to register for identity numbers as a general importer (API-U) or as a producer importer (API-P), both of which are renewed every 5 years.

As an importing  PMA PT, you will need to specify the type of product you will be handling and you will be assigned only one API-U or API-P and be able to deal only with that type of product you have specified.

The Director of Import of Indonesian Minister of Trade may allow you to import without an API. But, its only valid for certain goods or for infrequent importation transactions. This condition also holds true for goods for research and development purpose, promotional goods, temporary importation, and goods for self-consumption only, among others.

Once you are able to obtain an API, you may now register with the Directorate General of Customs and Excise (DGCE) get your customs identification number (NIK) that will remain valid unless DGCE cancels it.

The DGCE may block an importer’s NIK in any of the following cases:

• A change of data about the importer goes unreported to the DGCE
• The importer has no customs activity performed and reported in a consecutive 12-month period
• The importer’s business license has expired
• The importer is under investigation for a customs issue

Step No.3: Get a license for your products

The Indonesian Ministry of Trade is in charged to oversee and ensure that products imported are of good quality. After you finished classify your merchandise under the HS list, you will need to be more specific and identify your product in detail from the product code (HS) list. Once you already know the classification of your product, you will need to ensure that there are no restrictions apply. If there are restriction, then you should promptly apply for the additional appropriate license.

For instance, a cellphone importing company will find under the “phone” category and get 8517120000 as HS code. This code is a sign for “telephones for cellular networks”. There are more license for importing other types of product. The Trade Ministry will require you to register for the appropriate license applications for the right codes for import.  After that, then you will be able to bring your products in the country and pass through customs.