Import/Export License

Import/export licensing authorises regulated trading activities, granted by Indonesia’s central government. As certain commodities cannot be freely traded, licences are mandatory for their movement to and from Indonesia.
Indonesia, with aspirations of becoming the world’s fourth-largest economy by 2045, has made significant strides in improving its import and export procedures. The recent implementation of the Omnibus Law aims to streamline business processes, promote investment, financial inclusion, and simplify import and export activities.

 

Ministry of Trade Authority

Under Government Regulation No. 29 of 2021, the Ministry of Trade (MoT) holds the authority to issue approvals, verifications, obligations, and licenses for import and export activities. Importantly, the MoT can grant importers and exporters with a ‘good reputation’ greater autonomy and license ease, with specific criteria to be further regulated in a ministerial decree.
 

Business Identification Number (NIB) Simplification

Regulation 29/2021 simplifies the process for businesses, as they now only require a Business Identification Number (NIB) to engage in import or export activities. The NIB can be obtained through the Online Single Submission (OSS) system, eliminating the need for separate import licenses (API-U, API-P, API-T) and streamlining the process for exporters.
 

Additional Licensing Requirements

However, certain goods may necessitate additional import or export licenses. Importers might require licenses like importer registration, import approval, or general import approval, while exporters may need export registration or export approval licenses, depending on the circumstances.
 

HS Code Classification

Before proceeding with import or export, businesses must verify the Indonesian Harmonization System (HS) Code for their products. Specific products may demand additional licenses or registration, and the HS code also determines tax rates, customs duties, and any specific requirements.
 

Selecting a Freight Forwarder

Importers must work with professional freight forwarders to manage logistics and customs clearance efficiently. These experts handle the intricacies of international trade, ensuring goods flow seamlessly.
 

Import Documentation

When importing into Indonesia, businesses need essential documents such as a commercial invoice, bill of lading, certificate of insurance, packing list, NIB/import permit, and customs import declaration. Customs duties vary depending on the HS code and range from 0 to 170 percent.
 

Import Tariffs and Taxes

Import duties in Indonesia vary widely but mostly fall between 0 to 15 percent. Payment of customs duties and import taxes must occur before customs clearance. Additionally, an import sales tax applies, ranging from five to 30 percent. Indonesia’s commitment to the ASEAN Free Trade Agreement often results in lower duties for imports from member countries.
 

Export Process

Exporting goods from Indonesia entails establishing a sales contract between exporters and importers, facilitating payment via a letter of credit (L/C) or non-L/C methods. Only Indonesian incorporated legal entities can engage in exports, such as limited liability companies, public companies, or cooperatives.
 

Export Documentation and Taxes

Exporters must provide various documents, including a bill of lading, commercial invoice, customs export declaration, packing list, export declaration of goods (PEB), insurance certificate, export permit, and certificate of origin. Exporters generally enjoy exemptions from export duties and VAT, except for specific items like untreated skin, tanned leather, and coal, which incur duties of 25 percent, 15 percent, and five percent, respectively.