Selling Motor Vehicles in Indonesia: How to Start This Business?

Starting a business in Indonesia is not as challenging as you would have thought. It is actually viable for foreign investors as the Indonesian government has been pushing for foreign business in recent years to advance the country’s economy.

After you have chosen the industry that you want to start a business in and you have your investment plan ready, the consecutive incorporation process will become relatively straightforward.

One of the most suitable industries for foreigners to invest in and start a company is the automotive sector, such as selling motor vehicles in Indonesia.

Selling motor vehicles in Indonesia is a lucrative business, especially in the last 5 years, because the country actually imports many of their motor vehicles instead of relying on their own motor vehicle manufacturing industry. For this reason, foreigners can start automotive dealerships in Indonesia by acting as importers and distributors.

If you are considering starting your own business in the sale of motor vehicles, it helps to have some knowledge about the local regulations and requirements.

In this article, Cekindo will take you along to understand how you can start a motor vehicle dealership business in Indonesia. And if you need further assistance, our specialists have all the right tools in our arsenal to successfully incorporate your business in Indonesia.

Incorporating Your Motor Vehicle Selling Business In Indonesia

Your company formation of the sale of motor vehicle in Indonesia must comply with the Indonesian Company Law and the Investment Coordinating Board (BKPM).

Firstly, you need to select an entity that fits your business. For motor vehicle dealerships in Indonesia, a local company (PT) and a foreign-owned company (PT PMA) are the most common types for foreign investors.

Selling Motor Vehicles in Indonesia

You can either set up a new motor vehicle dealership or a used motor vehicle dealership business in Indonesia.

Due to the large population in Indonesia, you can sell various types of motor vehicles in Indonesia and make a profit out of them:

• Automobiles for personal use
• Premium cars from popular manufacturers
• Automotive vehicles and passenger cars for tourist transportation
• Other motor vehicles such as motorbikes

Special Requirements for Motor Vehicle Dealership in Indonesia

Regardless of what automotive vehicles you are selling, new or used, special requirements apply and it is compulsory for all business owners to follow. The most prominent one is Regulation No. 22 related to the automotive vehicles distribution in Indonesia.

Regulation No. 22 categorises motor vehicles companies into the following:

• Distributors
• Sub-distributors
• Agents
• Sub-agents

If you have a foreign-owned limited liability company, you are required to have a local agent to sell your motor vehicles. If you register your company with a local partner, you can then act as the direct distributor in Indonesia based on the distribution agreement.

Since most foreign investors import their automotive vehicles to Indonesia for sale, you will also need to acquire the general import license (API-U). Besides, you must obtain certain paperwork to show that the automotive vehicles you sell are in compliance with the local emission regulations.

Sale-purchase agreements signed by the buyer and the seller are also required and the price of the auto vehicle must include the retail price and government service tax.

Starting a Business in Indonesia is Easier with Cekindo

Setting up your motor vehicles selling company in Indonesia is simple with Cekindo.

First of all, we will give you advice on the type of entity suitable for your undertaking, and then we will deal with all the paperwork and bureaucratic aspects of the process for you. Last but not least, once your business is legally incorporated, we can even provide your business with daily operational and administrative support.

Cekindo has extensive presence across Indonesia. Together with our expert market specialists, we will ensure that your company is correctly set up with full compliance with Indonesia Law.

Discuss your motor vehicle selling business setup with one of our professional advisors today by filling in the form below first.