Managing Import Company in Indonesia · 2. API Produsen (API-P) Importer Identification Number for...

Managing

Import

Company in

Indonesia Collection of articles from Indosight blog

This e-book is a collection of most popular articles picked by our readers and

editors that give a comprehensive overview to a foreign investor or business leader

seeking to start or manage an import company in Indonesia

Read more: www.indosight.com/blog

http://www.indosight.com/blog/

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www.indosight.com E: [email protected] P: (+62) 21 8378 1725 Wisma Laena 702, Jl. KH Abdullah Syafi'i No.7, Casablanca - Tebet. Jakarta Selatan 12860

Table of Contents

Import licenses in Indonesia ______________________________________________________ 2

API (Angka Pengenal Importir) – Importer Identification Number _______________________ 2

NPIK (Nomor Pengenal Importir Khusus) – Special Importer Identification Number _____ 3

Importing Goods To Indonesia Without Licenses And Incorporating _______________ 4

Import licenses ________________________________________________________________________ 4

Undername importer as a solution _____________________________________________________ 5

Setting Up An Import Company In Indonesia ______________________________________ 7

1# Preparations for establishing import company ______________________________________ 8

2# General registration _______________________________________________________________ 10

3# Licensing specific products _________________________________________________________ 13

Examples of additional requirements for import companies ___________________________ 13

What to avoid when importing goods to Indonesia ____________________________________ 15

The Bottom Line ______________________________________________________________________ 16

EXAMPLE – Mr. Wong’s Cell Phone Import Business ______________________________ 16

Importing Animal Products To Indonesia _________________________________________ 19

What products are classified under animal products? _________________________________ 19

List of licenses required for importing animal products to Indonesia___________________ 20

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Import licenses in Indonesia

In case your business is about importing goods to Indonesia, you will have to obtain

licenses to be eligible to do that. We have a thorough guide on how to set up an

import company.

In this post we explain in more details the different types of import licenses and

how to get them.

API (Angka Pengenal Importir) – Importer Identification Number

In order to be able to import, you will need API. This serves the purpose of keeping

a database of importers and regulating the import activities. There are four types of

API:

1. API Umum (API-U)

General Importer Identification Number.

This type of import license given to a trade company to import goods in order to be

traded in Indonesia.

2. API Produsen (API-P)

Importer Identification Number for producers.

This type of import license given to industrial companies need to import goods for

capital and raw material in order to support operational activities and production.

3. API Terbatas (API-T)

Limited Importer Identification Number. Given to direct investment company to

import goods in order to support production with BKPM facility

4. API Khusus (API-K)

Importer Identification Number for contractor.

Having an API doesn’t make your company automatically able to import goods. For

some commodities to be imported need additional import license or even should

passed some test and get certification from specific departments and ministries.

Below we explain further about special importer identification number.

http://www.indosight.com/blog/setting-up-import-company-in-indonesia/


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NPIK (Nomor Pengenal Importir Khusus) – Special Importer Identification

Number

NPIK or else Special Importer Identification Number is needed if your company

importing one out of 8 the goods below:

Rice

Corn

Soybean

Sugar

Textile and textile products

Shoes and other foot apparel

Electronics and its components

Toys

NPIK can only be obtained if you already hold an API.

The journey of obtaining import license is not stopping until API and NPIK. For

specific goods you need to check in the certain ministries to get recommendation

and certificate.

For example, for all electronic and telecommunication devices, you need to get

certificate from Ministry of Communications and Information Technology. Getting

certificate means that all devices you wish to be imported should be tested in their

laboratory. This also applies to other specific commodities or goods.

We would be more than welcome to assist you figure out what type of licenses you

need for your import.

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Importing Goods To Indonesia Without

Licenses And Incorporating

photo credit

Becoming an importer in Indonesia is time consuming and complicated

process. Given the huge domestic demand it can be well worth the struggle.

The good news though- in this article I will tell you about an alternative, legal,

method to get your goods to Indonesia without import license or even

incorporating your company.

Import licenses

According to Ministry of Trade regulation (No.45/M-DAG/PER/9/2009), every

importer in Indonesia must hold General Import License (API-U) or the Producer

Import License (API-P). Notably a company is not permitted to have both licenses,

so you basically need to choose to be either trader or producer.

http://www.flickr.com/photos/58847482@N03/6885489621/

http://rulebook-jica.ekon.go.id/english/4389_45_M-DAG_PER_9_2009_e.html

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Bureaucracy of becoming importer

Many investors we talk with are put off by the extensive bureaucracy involved in

becoming an importer. I recently advised a European food manufacturer who

wants to sell their products in Indonesia. Here is how their process looks like (I skip

some details for the sake of simplicity):

1. Incorporating limited liability company in Indonesia – 10

weeks

2. Permanent business license (IUT) – 1-2 weeks

3. General import license (API-U) - 2 weeks

4. Customs identification number (NIK/SRP) – 1-2 weeks

5. Recommendation form Ministry of Agriculture (Deptan) – ~4

weeks

6. Approval from National Agency of Drug And Food Control –

~3weeks

7. Ministry Of Trade approval – 2 weeks

As you can see, it can take 6 months to become an importer in Indonesia. If you are

lucky, you might need couple of weeks less. But more often than not things in

Indonesia take more time than expected.

So, what if you want to start selling right now and not wait for months to get your

papers done?

Undername importer as a solution

Undername importer is a company that already has the import licenses for the

product you want to bring to Indonesia. Usually their main line of business is freight

forwarding and customs clearance. This means they have experience handling the

entire import-export process and they know exactly how to get goods passed the

customs and to Indonesia.

How it works

It is very simple actually – you have a product you want to send to Indonesia and

undername importer has the license to do it. You pay a certain percentage of the

transaction value to the company as commission.

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Exact commission rates depend on the company and industry, but they should not

be higher than few percentages.

How to find undername importer

There are a lot of companies offering the service in Indonesia, but you need the one

who already has license in your industry. You can try Google as some of them have

basic websites with a contact form.

Second source would be to ask your buyers since they are already in your industry

and might know some importers.

Or you can – self promotion alert – contact us and we will use our network to get an

undername importer for you. Just recently we signed a contract with a huge

electronics manufacturer for the exact same service.

Risks involved using undername importer

The good thing is that you won’t be breaking the law, so no risk regarding that.

Your biggest risk is ending up with wrong company. For example, a company that

(un)intentionally claims to have the type of import license they don’t actually have.

In that case you either just waste time or in worst case have containers stuck in the

Indonesian port.

So be wise when choosing undername importer. Make sure that this company can

give you their client references and know exactly which types of licenses you need.

Note that for different industries the import licenses and approvals required can be

quite different.

That’s it, I hope this article helps you to get your trading business started faster. I

suggest you to use undername importer as a temporary measure and in the same

time start the process of becoming an importer yourself.

https://www.google.com/search?q=define+undername&ie=utf-8&oe=utf-8&aq=t&rls=org.mozilla:en-US:official&client=firefox-a#hl=en&client=firefox-a&tbo=d&rls=org.mozilla:en-US%3Aofficial&biw=1366&bih=664&sclient=psy-ab&q=undername+import+indonesia&oq=undername+import+indonesia&gs_l=serp.3...189384.194175.1.194357.26.26.0.0.0.2.815.5870.5j13j5j5-1j2.26.0.les%3B..0.0...1c.1.BprShWvifbE&pbx=1&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.&bvm=bv.41524429,d.bmk&fp=24b126b35605e78a

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Setting Up An Import Company In

Indonesia inSh are

This article will give an overview for

anyone interested in importing to

Indonesia and starting an import

company.

We will make it simple enough that

anyone without prior background

knowledge can get an idea of how to get

started with import company in Indonesia.

Here are three steps to get your import company started.

Process of setting up an import company



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So let us break it down for you further and go into detail about each step. If you are

not interested in a very detailed description we suggest you skip down to our

fictional example.

1# Preparations for establishing import

company

The Indonesian government has put in place several laws to protect the local

market and entrepreneurs. Because of this, when wanting to start an importing

company you need to have a clear idea what the product(s) will be.

So first things first, this article assumes that you:

-Know what products you will be importing into

Indonesia

There are 21 different sections to classify your products in a government system

that has the dragged out designation of Harmonized Commodity Description and

Coding System. We will call it the System of Classification for short, and one

company can only declare one section on this list. So yes, if you want to import

products from a different section, you need to establish another legal entity.

“One company can only have license for one product section”

The System of Classification is also the basis of the import customs tariff for

Indonesia. The tariffs are changed every few years and rates can be checked on the

Directorate General of Customs and Excise website.

http://www.indosight.com/blog/assets/List-of-items-in-the-System-of-Classification1.pdf

http://www.beacukai.go.id/?page=apps/browse-tarif-dan-lartas.html

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-Meet the requirements of the Negative Investment

List

The negative investment list gives specific sectors or types of business that cannot

be owned by non-Indonesians. Foreign citizens are only allowed to have shares in

limited liability companies (PT PMA) and certain types of businesses also have

restrictions as to the percentage of foreign ownership.

Fortunately trading companies – regardless of the products they are handling – can

almost all be owned fully by foreign citizens.

For an overview of what are the restrictions to foreign ownership and if your

potential business is on the Negative Investment List go see Indosight’s article on

the subject.

photo credit

http://www.indosight.com/blog/foreign-ownership-restriction-negative-investment-list/

http://www.flickr.com/photos/lain32/8321828310/

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2# General registration

1. Get approval for Investment license and register

a Foreign Direct Investment (PMA) Limited Liability

(PT)

- For this step, you first need to make sure you meet the requirements for minimal

capital for setting up a company.

While a 10 billion IDR investment plan and 25% (but min. 300,000) of paid up capital

are required by law, in reality you will not be asked for a payment slip or a

statement from your bank. All you need is the statement letter from the

notary during the registration process.

To clear up some of the questions you might have about the subject we have

written an article and made a short video. Make sure to check out the comments

under these to see if others have had similar problems or questions that you might

currently be facing.

- Secondly, make sure that required documentation has been gathered before

filling applications.

We are not going to list all the documents required in each sub-step of registering a

company because this article means to provide a quick overview. However, it is

important to remember that it saves time and money to be ahead of the

bureaucratic process and try to have documentation ready for your next

application.

To establish a Foreign Direct Investment Limited Liability (PT PMA) company you

need the following:

1. Investment Coordination Board Principal License / Approval to your investment

2. Notary Article of association

3. Ratification from Ministry of Justice

http://www.indosight.com/blog/minimum-capital-requirement-for-setting-up-pt-pma/

http://www.indosight.com/blog/minimum-paid-up-capital-for-pt-pma/

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4. Domicile Letter from local government

5. Tax registry and Tax Card

6. TDP (business registry to local trade department)

2. Get a Permanent Business Permit (IUT)

This is issued by the Investment Coordinating Board and can be applied for only

when your company is ready to operate.

For example, during the application for getting an IUT, a distributor company needs

to present a copy of office and warehouse agreement to the Investment

Coordination Board. A documented location will be included to the Investment

Coordination Board Principal License and Notary Deed of Establishment.

Virtual offices are acceptable option for getting the domicile letter but they are

mostly available in Jakarta. Indosight consultants can help you with the virtual

office.

3. Register a General Importer Identity Number

(API-U) or a Producer Importer Identity Number

(API-P) at the Investment Coordinating Board

So an importing PMA PT needs to specify what type of product it will be dealing

with. Again, for one company you are assigned one API-U or API-P and that

particular company can only deal with that type of product.

Importation without an API can only be done after obtaining approval from the

Director of Import in the Indonesian Minister of Trade. Permission is only granted

for certain goods and/or infrequent importation, such as temporary importation,

promotional goods, goods for research and development purpose, self-consumed

goods (not for trading purposes), etc.

An API-U/P has to be renewed every 5 years.

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4. Customs Identification Number (NIK) at the

Directorate General of Customs and Excise (DGCE)

To enable fulfilling customs obligations, an importer company must register with

the DGCE to obtain NIK and it will remain valid unless it is cancelled by the DGCE.

An importer’s NIK may be blocked by the DGCE in case:

- no customs activity is performed in a consecutive 12 month period;

- a change in data goes unreported to the DGCE;

- importer is under investigation related to customs issue; or

- the business licence of the importer has expired.

This is the end of the second step and after completing this, a company is entitled

to apply for specific products to be brought into the country.

photo credit

http://www.flickr.com/photos/earlg/163755542/

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3# Licensing specific products

The Ministry of Trade has the assignment to oversee and guarantee the quality of

products coming into the country. To get licences for your products you need to

classify your merchandise from their System of Classification list, as mentioned

before. At this stage however, you need to be more specific and find your product

from product code (HS) list .

For example if you want to import cell phones, you would search for ‘phone’ on the

product code list. This will tell you that the HS code for ‘telephones for cellular

networks’ is 8517120000 and possibly up to 7 different types of licences for import

are needed.

The Ministry of Trade will require you to launch licence applications for the

appropriate codes for import before your products can be brought to Indonesia

and through customs.

Examples of additional requirements for

import companies

The variety of products that can be imported to Indonesia is vast and the area is too

heavily regulated for most nuances to be explored in our short article. We can

however include some relatively common issues that we have come into contact.

Advice one – Product Conformity Assessment

Be aware of the products subject to the Product Conformity Assessment (PCA)

requirements – these will involve pre-shipment inspection of the goods.

Importers can benefit from a faster customs clearance process because verification

activities have been completed prior to shipment. In addition, they do not risk

having their goods rejected because of non-compliance with requirements.

http://inatrade.kemendag.go.id/index.php/layanan

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Advice Two – Special Importer Identification

Number (NPIK) and Registered Importer Number

(ITPT)

Importation of certain products requires the importer to have the NPIK or the ITPT.

Companies that import commodities such as rice, electronic products, sugar, corn,

soybeans, toys, footwear, and textiles should obtain NPIK.

ITPT is required for electronic products, ready-made garments, toys, footwear, food

and drink products, cosmetic products, and traditional and herbal medicines.

These two become important not in the general registration step, but when starting

to import specific products.

Advice Three – storage charges

Cargo shipped to Indonesia that cannot be imported promptly will incur storage

charges, and perhaps fines. The consignee maybe left with no choice but to

abandon the cargo.

‘Cargo shipped to Indonesia that cannot be imported promptly

will incur storage charges, and perhaps fines’

To avoid this, double check to make sure all procedures, which need to be followed

prior to your merchandise reaching Indonesia, are complete. This is meant as a

general warning due to the multitude of different bureaucratic procedures that

different products incur.

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What to avoid when importing goods to

Indonesia

Avoid spending extra time and energy – it might be possible to skip almost the

entire described process.

There are ways you can have legal presence in Indonesia as an importer under

certain conditions without starting a PMA PT or possibly even carry out importing

activities without licenses and incorporating.

Advice one – use an undername importer

You might be able to use an undername importer that already has a license for the

product you want to import. They usually know the ins and outs of getting your

product to the country and through customs.

This option would however only be wise if you going to be importing to Indonesia

for a few times or are in a hurry.

There are some dangers involved in using an undername importer and we

recommend that you read Indosight’s article on the subject.

Advice two – open a representative office

If your company wants to test the market before the registration process, it is

possible to open a representative office. This is the fastest way to get legal presence

in Indonesia, although there are certainly more limitations on a representative

office as opposed to a PMA PT.

As always, we have more detailed information for you in an article on the benefits

and downsides of a representative office in our blog.

http://www.indosight.com/blog/import-indonesia-without-licenses-incorporating/

http://www.indosight.com/blog/representative-office-indonesia-benefits/

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The Bottom Line

In case you find that establishing a PMA PT import company is what works for

you,time and cost are likely to be the two key aspects.

Unfortunately, we cannot estimate an approximate cost that would be universal in

any sense of the word. The specifics of product licenses alone can differ hugely in

terms of price. The registration and licencing procedure needs to be looked at as a

whole before any price quotes can be made. Be careful with consultancies that tell

you different.

In terms of time, we estimate that setting up a PMA PT import company can take 6

months and getting specific licences for products can take upwards of 2 months. So

8 months would be the optimal time as limited by the official bureaucracy in

Indonesia.

We admit that 8 months can seem long, however it should not be a big deterrent

asrewards can be huge in this booming consumer country.

EXAMPLE – Mr. Wong’s Cell Phone

Import Business Now, let us take a theoretical example of the time and financial costs that a specific

importer can face when starting a company with us.

So our fictional character is Mr. Wong – he wants to import two specific types of cell

phones to Indonesia.

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photo credit

After a discussion with our consultants, he will have an overview of the upcoming

process, which will look something like this :

http://im.rediff.com/business/2012/jul/26chi3.jpg

http://www.indosight.com/blog/assets/Mr-Wong1.png

http://www.indosight.com/blog/assets/Mr-Wong1.png

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In the case that Mr. Wong decides to use Indosight to start his company in

Indonesia, he will send us a list of required documents and we will go through the

bureaucratic process on his behalf.

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Importing Animal Products To Indonesia

In this article we’ll go more into details with one of the most challenging products –

importing animal products to Indonesia.

First of all, do not try to import anything to Indonesia without an import approval

(PI). Unless you have good ties in the Indonesian customs this will have only two

possible outcomes:

1. The goods become the property of Republic Of Indonesia

2. Goods need to be re-exported

Every week we get emails from foreigners who were not aware of it and

unfortunately there’s not much that can be done once the goods are already stuck

in customs. So play safe and get license first or use an undername importer who

has the right license (remember the one company one classification rule that

applies since this year).

What products are classified under animal products?

Any product derived from animals will be an animal product. Most common ones

are all sorts of meat, milk, yoghurt, whey, butter, dairy spreads, ghee, cheese, eggs

and many more. Consult Indosight in case you are not sure what is your product

classification.

http://www.indosight.com/blog/importing-animal-products-to-indonesia/

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List of licenses required for importing animal products to Indonesia

Needless to say, importing animal products to Indonesia is not the easiest thing to

do in this country. But all of the hassle might be well worth it once you get all your

documents in order and enjoy the benefits of Indonesia’s optimistic consumers.

The list of licenses you are required to obtain:

API-U (general importer identification number)

NIK (

IT-Produk Hewan Olahan

PI (import approval)

Let’s see how to get all of those licenses.

Incorporate import/trading company first

In order to be able to apply for import licenses, you will need to have a company in

Indonesia that has importing or trading stated as its activities. In case you don’t

have one yet, start as soon as possible because it will take around 8-10 weeks to get

company registered. Here’s our company registration service.

API-U and NIK

Once your company is set up, you will need to obtain API-U (general importer

identification number) and NIK (customs identification number). Since in this article

we talk about importing animal products, getting those licenses will however not be

sufficient and you need to be registered as importer of animal products (IT-Produk

Hewan Olahan).

http://www.indosight.com/inc/company-registration-indonesia

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Image credit

Becoming importer of animal products (IT-Produk Hewan Olahan)

Becoming an importer of animal products is a very bureaucratic process (or you

might ask what isn’t bureaucratic in Indonesia?). Here are the documents you need

to prepare for your application:

1. All company’s legal incorporation documents

2. Request Letter

3. Proof of ownership of: Cold Storage

4. Proof of ownership of: Transporter with cold storage

5. API-U and NIK

If you could take only one thing out of this article then take this – fulfill ALL of those

requirements and you will be fine. Often foreign entrepreneurs find some of those

criteria ridiculous and try to find ways around them. It’s not a good idea and will

only delay the whole process. Be prepared from the beginning.

Import approval (PI)

Prior to every shipment you will need to get approval EVERY TIME from Ministry of

Trade. In order to receive it, you’ll need the following:

1. Letter of request

2. Import plan for 6 months

http://www.flickr.com/photos/chiotsrun/4255041466/

http://www.indosight.com/blog/assets/ghee-import-animal.jpg

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3. Recommendation from Agricultural Ministry (Dirjen Peternakan dan Kesehatan

Hewan)

4. Recommendation from BPOM (Direktur Inspeksi sertifikasi Pangan) (We can help

you get no. 3 and 4)

5. All company incorporation documents

6. API and NIK

7. IT – Produk Hewan

That’s it – I hope this was structured enough to give you an idea of what you will

need to go through to start importing animal products to Indonesia. If you need

assistance, we’ll be happy to help you with both setting up the company and

obtaining import licenses.

Contact us also if you have any other products you want to import. Remember –

you can save a lot of time and money by being well prepared prior to your first

shipment.

Featured image credit

http://www.flickr.com/photos/sliceof/370534118/

Managing Import Company in Indonesia · 2. API Produsen (API-P) Importer Identification Number for...

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