How to start an Export-Import business in or with Indonesia?

Indonesia ranks 29th in terms of foreign trade value and 15th globally in terms of nominal GDP. China is the most important trading partner of the country for both imports and exports. Indonesia is the largest economy with GDP of 1.19 trillion USD in South Asia in 2021.

As per the Global Import Export Data, the exports of Indonesia reached a record high of USD 231.51 billion and the imports totalled USD 196.2 billion.

As per the Indonesia Import Data, the main imports of the country are refined petroleum, crude petroleum, petroleum gas, vaccines, blood, antisera, toxins and cultures and motor vehicles, parts and accessories. The leading countries from which Indonesia imported goods were China, Singapore, Japan, the United States and Thailand.

Similarly as per the Indonesia Export Data, the main exports of the country are oil and gas, minerals, crude palm oil, electrical appliances and rubber products. The main export partners are China, the United States, Japan, India, Malaysia, Singapore and South Korea.

How to start import business in/with Indonesia?

1. The business can set up a 100% foreign-owned import-export company in Indonesia. The stocking of products is not allowed in the country and as soon as the goods arrive, they must be transferred to a distributor.

2. If you plan to distribute imported products the company can have a maximum of 67% of foreign ownership. However, distributing medical equipment in Indonesia, Import Company can be set up with only 49% of foreign ownership and the remaining 51% of the shares must be owned by local shareholders.

3. To establish an import/export business in Indonesia it is important obtain import and export license.

4. Indonesia has made it easier to obtain licenses and earlier one Import Company was able to import products from one product sector from 21 available sectors on basis of HS code. With one general license it is possible to import products from all the twenty-one categories.

5. The importer has to obtain the General Importer Identity number allowing the importers to import products for trading purposes. However, it is important to have an Indonesian director for the foreign director first need to obtain work and stay permit before applying for this license and this takes two months process.

6. The importer company must register with the Directorate General of Customs and Excise. The authority will issue a customs identification number that will remain valid unless cancelled by DGCE.

7. With the importer of record service, one can import products to Indonesia without incorporating a legal entity or acquiring any licenses.

8. When importing goods from abroad in Indonesia, it is important to choose a freight forwarder. Freight forwarders handle all the logistical requirements and help in managing and fulfilling custom clearance needs.

9. Custom duties of Indonesia vary from 0 to 170 percent with most imported items attracting duties in the range 0 to 15%. The amount of import duty is based on the goods imported on the basis of HS code.  Importers have to pre-pay custom duties and import taxes and provide notification of income freight to customs. Import sales tax is imposed on imports at the point of entry at rates within the range of five and 30%.

How to set up export business in/with Indonesia?

1. Before exporting from Indonesia the exporter must have Tax payer identification number.

2. The export process begins with sales contract process between exporters and importers through which the payment is made through the letter of credit or non letter of credit method.

3. Only Indonesian incorporated legal entities can export goods from Indonesia. These can be limited liability companies, public company or a corporative. The exporters must provide bill of lading, commercial invoice, customs export declaration, packing list, export declaration of goods, insurance certificate, export permit, and certificate of origin.

4. Export companies are exempted from export duties, VAT and tax on luxury products for materials and intermediate goods used in the manufacturing process goods produced from export. Exporting certain items like untreated skin, tanned leather and coal have export duties of 25%, 15% and 5%.

5. Exporting goods in Indonesia, one time registration is to be completed. The export license may be obtained from the concerned government department if required in Indonesia.

In Indonesia an individual identity number known as customs identification number is given by directorate general of customs and excise to importers and exporters and its registration is required to perform custom activities. The custom number enables the exporters and importers to access or connect with the custom system.

Wrap up

Work with a professional data service provider to know the trade dynamics of the country. The data provider will provide accurate inputs and data –based information that will help you know the import export scenario of Indonesia so that you can start your import export business with great ease.

How to start an Export-Import business in or with Mexico?

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