Securing an Import License via OSS in Indonesia

Indonesia is a critical trading hub in Southeast Asia for both export and import. The nation is bordered by countries such as Singapore, Thailand, Malaysia, the Philippines, Vietnam, and Australia. Therefore, trading plays a pivotal role in Indonesia’s economic growth.

Exports and imports contribute to 37% of GDP. In 2016, Indonesia imported US$ 132 billion worth of goods, with major imports from China, Singapore, Japan, Malaysia, and South Korea.

Securing Import License with OSS

Before the implementation of Online Single Submission (OSS), individuals or companies wanting to import goods legally to Indonesia were required to obtain a General Import License (API-U) or a Producer Import License (API-P) based on the products they dealt with.

The processing time for these licenses was often daunting, taking up to five months. However, with the OSS licensing system and unnecessary procedures canceled by the Ministry of Trade, the securing import license process has become more convenient and faster, encouraging more investors to start trading businesses in Indonesia.

Difference between API-U and API-P before OSS

The two main licenses, API-U and API-P, had distinct purposes. API-U allowed trading companies to import goods for general trade and commerce. At the same time, API-P was used for importing items for personal or internal use in a company, such as raw materials or capital goods.

Import License Process Requirement before OSS

Before OSS, obtaining an import license in Indonesia involved a lengthy process, including incorporation, obtaining permanent business licenses, import license application, customs identification number, and additional approvals from relevant authorities depending on the item group or category.

Import License Process Requirement with OSS

Since implementing the OSS system in July 2018, all permit and licensing processes, including import licenses, have been streamlined under OSS. The new Business Identity Number (NIB) replaces the need for API and NIK (Customs Registration), simplifying the import license process. Importers still need to ensure compliance with technical import requirements with relevant authorities.

Advantages of NIB over API/NIK

The NIB does not have a validity period, unlike API and NIK, and it allows for easier data changes without necessitating license updates. Integration of the OSS with the Indonesian customs and excise system has further facilitated the import license process.

Changes in Authorized Person under OSS

Under OSS, only directors are permitted to be registered for signing import documents, invalidating the previous practice of allowing anyone stated as an authorized person in API to do the signing.

Starting a Trading Company in Indonesia

Foreigners often opt for a foreign-owned company (PT PMA) as Indonesia’s most common trading company. To set up a trading company, foreign investors should ensure compliance with local laws, such as the Positive Investment List, and complete the incorporation process at the Ministry of Law and Human Rights (MOLHR) through AHU Online before proceeding with OSS registration.

Apply with a Local Agent

Securing an import license in Indonesia has become more straightforward and efficient with implementing the OSS system. The new Business Identity Number (NIB) has replaced the need for separate API and NIK licenses, streamlining the process for traders and investors.

By starting a trading company in Indonesia and leveraging the advantages of the OSS system, businesses can access new markets and contribute to Indonesia’s thriving trade economy. Working with a reputable local agent like InCorp Indonesia is advisable to navigate the import license application process effectively. Our expert advisors stay updated with the latest regulations, ensuring a smooth application process and minimizing the risk of rejection.