The Ultimate Guide to Shipping Goods into Indonesia

Indonesia’s new Omnibus Law has heralded a new era of business reforms for import Indonesia process, aiming to attract foreign investment and stimulate economic growth. As part of this initiative, the government has taken significant steps to streamline the process of importing to Indonesia.

The improved initiatives of the import and export landscape are paving the way for Indonesia’s aspiration to become the fourth-largest economy by 2045. This article provides a comprehensive guide to navigating Indonesia’s import permit and procedure.

The Latest Regulation Update for Import to Indonesia

Prior to the Omnibus Law, businesses had to apply for one of three types of import licenses:

• API-U (General Import License)
• API-P (Producer Import License)
• API-T (Limited Import License)

However, under Government Regulation No. 29 of 2021 (GR 29/2021), businesses now only require a Business Identification Number (NIB) to commence their import or export activities. The NIB can be obtained through the Online Single Submission (OSS) system, streamlining the application process and reducing administrative burdens.

However, businesses should check with the Indonesian Harmonization System (HS) code, which is used to classify and calculate tax and customs rates on all types of items, before importing or exporting them. The classification is done because some items may require additional permits or registrations.

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Understanding the process of Importing Goods into Indonesia

Required Documents

The following documents are required for shipment in Indonesia:

• Invoice
• Commercial Invoice
• Certificate of Origin
• Bill of Lading
• Packing List
• Insurance Certificate
• HS Code
• Material Safety Data Sheet

Note that not all may be required at once, but it’s better to know about them in case the customs brokers or immigration authorities inquire about them.

Choosing The Right Freight Forwarder for Import to Indonesia

An appropriate shipping partner may greatly affect the delivery experience when it comes to international shipment. However, different shipping partners excel at different stages of the supply chain, so it’s better to look for the one that fits the requirement. For import to Indonesia, it is recommended to seek partners who possess the following qualities:

• Has local expertise
• Knows what can and cannot be shipped into the country
• Knows how to collect payment for the products.

READ MORE:

• Importer of Records in Indonesia – A Legal & Inexpensive Way to Import

The Complete Guide on How to Import to Indonesia

To successfully import into Indonesia, follow these key steps:

Prepare Mandatory Import Documents

Have your Tax ID, Single Business Number (NIB), purchase orders, packing lists, commercial invoices, bills of lading (BL), and any additional permits required by the Harmonized System (HS) codes. For example, tricycles require a survey report and SNI certificate, while multifunction printers might require import restrictions and extra surveys.

Identify Correct HS Codes

Determine the accurate HS code for your goods, as this determines the tariffs, duties, and required permits. Misclassification can lead to penalties, delays, or seized goods.

Know Your Consignee/Importer of Record

The consignee or Importer of Record (IOR) is responsible for the imported goods’ compliance and for paying tariffs and fees. Establish clear communication with the IOR to understand timelines and costs.

Ensure Transport Schedule Visibility for Manifest Submission

In Indonesia, the cargo manifest must be submitted to customs before the arrival of the vessel or aircraft. Failure to do so can result in fines starting from US$700 (€641) per document. Ensure your carriers or Non-Vessel Owning Common Carriers (NVOCC) submit the manifest on time to avoid penalties.

Ensure All Documents Match Goods Received

Ensure all import documents, permits, and licenses align with the goods you receive. Discrepancies can lead to penalties or cargo detainment.

Understand Incoterms for Buyer-Seller Responsibilities

Incoterms define the division of costs and risks between buyer and seller. They also impact how duties and taxes are calculated. Clarify the applicable Incoterms to avoid misunderstandings.

Appoint a Compliant Logistics Partner

Select a logistics partner who understands Indonesian import regulations to manage your supply chain efficiently and minimize delays.

These steps will help streamline the customs brokerage process when importing into Indonesia.

Import to Indonesia: Understanding The Journey of The Goods

A package’s journey involves many steps in cross-border/international shipping:

• The First Mile – The shipment goes from the merchant’s warehouse to the port.
• Origin Customs Clearance – Clearing goods for export from the origin country.
• The Freight – The shipment moves from the origin country’s port to the destination port.
• Destination Customs Clearance – Clearing goods for import in the destination country.
• Distribution – Before the last mile delivery step, parcels arrive at a warehouse or distribution center to be processed and allocated to the appropriate vehicles.
• The Last Mile – The package is transported from the origin port to the customer’s residence.

Import to Indonesia: Tariffs and Taxes

In Indonesia, customs charges range from 0-170%, with most imported products receiving tariffs between 0% and 15%. The amount of tax is determined by the kind of goods imported and the HS code of the product. Moreover, it is necessary to pay customs charges and import taxes in advance and notify customs of arriving freight.

Imports are subject to an import sales tax at the point of entry (save for products deemed necessary by the government), with rates ranging between 5% and 30%. Furthermore, Indonesia is a signatory to the ASEAN Free Trade Agreement, which stipulates that tariffs on imports from ASEAN member nations vary from 0-5%.

READ MORE:

• How Omnibus Law Liberated Shipping Industry in Indonesia for Foreign Investment

What Types of Imports and Exports Goods are prohibited by Indonesia?

Indonesia maintains a list of goods that are prohibited from being imported or exported to safeguard its national interests, protect its environment and public health, and preserve its cultural heritage. These prohibitions are outlined in Regulation of the Minister of Trade No. 18 of 2021 on Export Prohibited Goods and Import Prohibited Goods.

Prohibited Imports in Indonesia

Certain categories of goods are strictly prohibited from entering Indonesia. These include:

• Hazardous and toxic materials: Substances that pose a threat to human health or the environment, such as chemicals, pesticides, and hazardous waste.
• Cultural heritage goods: Artifacts, antiques, and other items of significant cultural value to Indonesia, including those from archaeological sites or historical periods.
• Used clothing, bags, and sacks: These items are prohibited to prevent the spread of diseases and maintain hygiene standards.
• Certain types of sugar and rice: To protect domestic production and ensure food security, certain types of sugar and rice are prohibited from import.
• Ozone-depleting substances: These substances contribute to the destruction of the ozone layer, and their import is banned to protect the environment.

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Prohibited Exports in Indonesia

Indonesia also restricts the export of certain goods to protect its natural resources, conserve biodiversity, and promote sustainable development. These include:

• Scrap metal: To prevent the depletion of domestic resources, scrap metal exports are prohibited.
• Certain agricultural products: To ensure domestic food security and support local farmers, certain agricultural products, such as raw palm oil and unprocessed rubber, are prohibited from export.
• Subsidized fertilizers: To control the availability and pricing of fertilizers for domestic farmers, subsidized fertilizers are prohibited from export.
• Mining products: To manage natural resources sustainably, certain mining products, such as nickel ore and unprocessed bauxite, are prohibited from export.
• Forestry products: To protect Indonesia’s rich biodiversity and prevent deforestation, certain forestry products, such as raw logs and unprocessed rattan, are prohibited from export.

Applicability of Prohibitions

The prohibitions on import and export apply to both commercial and non-commercial activities. Individuals are also subject to these restrictions when bringing goods into or out of Indonesia.

It is essential to consult the relevant regulations and obtain necessary permits before attempting to import or export any goods into or out of Indonesia. Failure to comply with these restrictions can result in penalties, including confiscation of goods, fines, and even legal action.

Ship your Product with an Ease Through Importer of Records

An Importer of Record is a legal service that allows firms to import items into the country through an import partner. An importer of record simplifies and fastens the customs clearance process. They have extensive local knowledge and are handy in tracking your goods’ export/import process. With an IOR by your side, you can focus on your core business activities without having to worry about costly delays.

Let InCorp Make it Easy for You

If you plan to ship goods into Indonesia, you should be aware of the procedures and bureaucratic requirements. InCorp, as an Importer of Record, offers an end-to-end import service for a wide variety of items, from medical equipment to cosmetics and food and beverage.

Incorp registers your company with the least amount of fuss while you focus on the main business aspects. Our consultants can assist you in obtaining the appropriate product registration as well as licenses such as business and import licenses in Indonesia.

Our accounting and tax reporting services provide competent guidance and ensure you stay on top of all legal compliances.