Key Points about Import License in Indonesia

Foreign entrepreneurs who want to start a business in Indonesia and import goods into the country need an import license. Regardless of the size of your shipment, you must apply for this license before importing goods to Indonesia. With the proper authorization, your products can get through customs clearance.

As a business owner, taking one step ahead is advisable, especially knowing the import license requirements. Plus, you have to know in advance what sort of license suits your business and how you should go about getting one.

This article will walk you through applying for an import business license in Indonesia.

An Overview

As of 2017, Indonesia is the 8th largest economy in the world based on purchasing power parity. Annually for the last decade, it is growing at an average of 5%. With the help of this consistent economic growth, and natural resources such as natural gas, crude oil, fuels, and foodstuffs, Indonesia has pulled itself into the upper-middle-income status.

Trading plays a crucial role in economic growth in Indonesia, with the combined value of exports and imports equal 37% of GDP. Indonesia is also known for its large amounts of goods imported and then have them re-exported to the neighboring countries.

Read also: Opening a Trading Company in Indonesia

Therefore, if you want to start a business in Indonesia, trading from importing can be an excellent option. Foreign companies can do this by appointing an agent, distributor, or importer.

Also, the Indonesian government has launched a series of reforms to remove unnecessary requirements for several policies to further spur economic growth in Indonesia.

More than 31% of licensing and irrelevant examination procedures were canceled at the Ministry of Trade (MOT). This applies to more than 15 government entities and licensing ministries. This is good news for most ex-pats, including importers.

What is an Import License?

In general, an import license is used to keep control of import allowance, and also the imported items, to Indonesia. This special license is a non-tariff barrier for Indonesia to protect the local economy and producers by restricting the number of goods imported.

Many importers in Indonesia represent multiple foreign manufacturers and product companies. Often, overseas companies will form close relations with Indonesian importers that allow two entities to operate as one through the import business license.

Related article: Export Import License that Your Company Should Have

Different Types of Import Licenses in Indonesia

Following the Indonesian Minister of Trade (MoT regulations), an Import Identification Number (API) is mandatory for companies that import goods to Indonesia.

The API serves as a record in the database of importers and their import activities. All importers in Indonesia require an API, depending on the intended use of the imported items.

There are two major types of API: a General Import License (API-U) and a Producer Import License (API-P). The MoT issued two new import license regulations, with significant changes under MOT Reg 70/2015, effective January 1, 2016.

General Import License API-U (Angka Pengenal Impor Umum)

As its name applies, this import license allows a trading company to import goods for general trading purposes in Indonesia.

Previously, companies with API-U could only import one particular group of goods specified under the Trade Regulation (a section in Appendix 1). However, with the amendments, API-U holders can now import items under several other sections with the HS code.

In addition, importers with API-U do not need to have a special relationship with overseas suppliers like before. This unique relationship was formerly required and established through several agreements such as supplier agreements, agency or distributor agreements, shared control over economic activities, etc.

Producer Import License API-P (Angka Pengenal Impor Produsen)

API-P gives industrial companies the right to import goods that are only for their own internal use. The imported goods under API-P are raw materials, capital goods, and supporting materials for the support of production and operational activities.

Under the Trade Regulation, imported industrial goods or finished goods under API-P are strictly prohibited for direct sale or third-party transfer. Importers can only transfer these imported goods to other parties under an import duty exemption facility. There are two exceptions in any case.

Furthermore, companies must show evidence of its use for at least two years after the date of the Import Declaration Form. or specific industrial goods used for marketing testing or serve as complementary goods to develop the business in Indonesia.

Process Requirements for an Indonesian Import License

As mentioned, the Ministry of Trade regulates Indonesian trade and administers trade activities, including registration and market development.

Other players with essential roles in import and trade regulations include the Investment Coordinating Board (BKPM), the Ministry of Agriculture, and the Directorate General of Customs of Excise.

As an ex-pat, getting an import license, either API-U or API-P is complex and considerably challenging. The whole process can take up to four or five months, with a considerable effort of both time and money. The entry barrier can be even more complicated depending on the type of goods shipped into Indonesia.

Before InCorp Indonesia (formerly Cekindo) eases your process with our service, here is the process timeline breakdown.

Step 1: Incorporation of PT or PT PMA in Indonesia (6 weeks)

Step 2: Obtaining IUT permanent business license (only for API-U) (1 – 2 weeks)

Step 3: Obtaining import license API-U or API-P (1 week)

Step 4: Getting NIK/SRP customs identification number (4 weeks)

Step 5: Acquiring a recommendation from DEPTAN Ministry of Agriculture (only for a particular category such as food or children’s items)(4 weeks)

Step 6: Approval by other authorities depending on your product category (e.g. National Agency of Drug and Food Control for food products) (3 weeks)

Step 7: Approved by MoT Ministry of Trade

Update for an Import License Application

The government simplified the import license to encourage more foreign investments in Indonesia. Foreign investors can now apply for an import license online. This means quick, simple, and hassle-free.

Apply for an Indonesian import license through the newly implemented Online Single Submission (OSS) system.

This makes obtaining an API and a NIK (Customs Registration) unnecessary since a Business Identity Number (NIB) serves as the basic import license.

With this new system, all business entities must register themselves through it. After registration at the OSS, each business will get a Business Identity Number NIB (Nomor Induk Berusaha).

The NIB will only expire if the company is in operation. Consequently, the NIB number simplifies processes. It replaces the Company Registration Certificate, Importer Identification Number (for import license), and Customs Registration NIK (Nomor Induk Kepabeanan).

In other words, companies that engage in import activities do not have to acquire an API and NIK.

However, importers must still comply with technical import requirements with relevant authorities.

Import Restrictions in Indonesia

Special Importer Identification Number 

A special importer identification number (NPIK – Nomor Pengenal Importir Khusus) is a must for importing these items: rice, corn, soybean, sugar, textile and textile products, electronics and their components, and toys. Without NPIK, all these items are prohibited from being imported into Indonesia.

Besides the API and NPIK, you must determine which ministries process relevant certificates.

Prohibited Goods

The following goods are completely banned in Indonesia for import. Heavy sanctions apply to whoever breaks the law.

1. Pornographic materials
2. Drugs and narcotics
3. Any politically sensitive materials
4. Weapons, including sport and hunting guns (special permit required)
5. Explosives, firearms, and ammunition (special permit required)

Import Tax and Duties in Indonesia

The import tariff differs in Indonesia, ranging from 0 to 40%, depending on the product category with the HS code. The declaration of imported goods (PIB) includes 10% of value-added tax (VAT) and 2.5% of income tax.

Read also: Income Taxation System in Indonesia

Under-name Import

Don’t get put off by the import license process. In Indonesia, an under-name importer is extremely common to provide a complete solution for importers. This is because an under-name importer equips with all the correct import licenses and is ready to import goods you want to bring into Indonesia.

InCorp Indonesia (formerly Cekindo) can serve as an under-name importer to help reduce costs and waiting time. We also ensure that your products get through customs and arrive in Indonesia safely.