Indonesia is one of the world’s biggest emerging economies for a reason. It has a vibrant young population with a median age of 28 years old. Its purchasing power is increasing. E-commerce and financial technology (fintech) products possess a huge potential here as most are active Internet users.
But, foreign investors have to go through a complex and, sometimes, chaotic product registration in Indonesia. The misguidance can lead to many errors and delays. Worse, companies may lose the chance to bring their products into the country.
As your business solutions company in Indonesia, Cekindo aims to educate, guide, and provide the right tips on product registration.
What Is BPOM?
BPOM stands for Badan Pengawas Obat & Makanan, an Indonesian Agency for Drug and Food Control. It works similarly as the US Food and Drug Administration. It has three important roles: legislation, standardization, and regulation of food and drug products. These include traditional medicine, food supplement, and cosmetics.
In 2017, BPOM revealed that the bulk of the product registration is for cosmetics. This is interesting since the category hardly cut a share in 2012 to 2013. This is then followed by food and drugs. Getting the smallest share, are traditional medicine and food supplement.
In line with their roles, BPOM, which works alongside the Ministry of Health and National Narcotics Agency, performs the following functions:
- Creation of new and updating of existing policies and procedures
- Product sampling
- Testing of products in the laboratory
- Investigation of fraudulent, suspicious, or wrongly marketed goods
- Coordination with the law enforcement in cases of fraud and other product-related crimes
- Assessment of product marketing materials
- Inspection of manufacturing and distribution facilities
- Product monitoring after the BPOM evaluation (or when goods are already available in the market)
- Issuance of product registration certification
Indonesia’s goal is to improve its foreign direct investment. As such, it has already eased many restrictions on the Negative Investment List and improved the tax incentives. It is also working with other countries to help create a more global standard for product registration.
What You Need for Product Registration
The regulations that govern product registration in Indonesia vary significantly among the industries. Cekindo has outlined the basics here:
Food and Beverage Registration
Food is defined as any product, whether unprocessed or processed, that has been derived from biological sources. These include farms, water sources, plantations, and forests. Manufacturers and/or distributors sell them as food and beverage meant to be consumed by humans.
Registering food and beverage in Indonesia depends on many factors. For one, not all of them have to be registered. They are exempt if used only as an end product or when their life cycle doesn’t last for more than 7 days. Products meant for personal consumption, as well as those not sold to consumers, don’t have to be registered. In general, the registration covers food additives, raw materials, package material, and even the process of manufacturing the product. Most products that enter the country, however, should go through the process.
- Packaging or artwork
- Product code explanation
- List of raw materials (with their expiration dates) and finished products
- Validation of its hazard analysis and critical points (HACCP)
- Analysis certificates for its finished products and raw materials
- Authorization letter
Food Supplements Registration
Indonesia is one of the ASEAN countries that decided to adopt the regulations of Traditional Medicines and Health Supplements (TMHS), which means these are already harmonized standards.
This knowledge is essential since it changes the definition of health supplements and subsequently the process of evaluation. According to TMHS, a product is a food supplement if it contains amino acids, vitamins and minerals, and other ingredients that improve the health or have physiological effects. It is also a supplement if it is added to the diet. Most of all, they are not sold or intended as food.
- Import license to be accomplished by the importer
- Authorization letter from the manufacturer
- Free sale certificate from the country of origin and legalized by that country’s Indonesian consulate or embassy
- Company tax ID
- Trade business license
- Good manufacturing practice to be accomplished by the manufacturer
- Detailed information on the ingredients including active ingredients, dosage, and usage
- Manufacturing process
- Stability study
- Toxicity test information from laboratories chosen by BPOM or similar agency in the country of origin if the safety of the product is unknown
- Safety test certificate from laboratories chosen by BPOM
Medical Devices and Equipment Registration
Based on no. 1190/MENKES/PER/VIII/2010-Regarding Medical Devices and Household Products, Indonesia defines medical devices as ‘the instruments, apparatuses, machines and/or implants that do not contain drugs used to prevent, diagnose, cure and relieve diseases, treat sick people, recover health of human beings, and/or form the structure and correct the body function.’
Due to the nature of the products, registering a medical equipment or device is one of the most confusing. There’s an incredibly long list of requirements. Moreover, the actual product registration process depends on the risk classifications. There are three:
- Low Risk – These are equipment or devices that don’t cause any serious physical harm if they malfunction. Examples include bandages and weighing scale.
- Moderate Risk – These are devices or equipment that could impact a person’s physical health but don’t lead to serious damage if they malfunction. Surgical lamps and, interestingly, pregnancy test kits fall in this category.
- High Risk – These are devices or equipment that results in serious physical harm, including death, when they are misused or malfunction. Stents and pacemakers are prime examples.
The actual product registration process in Indonesia highly depends on the classification. For instance, instruments labelled as low risk do not require clinical evaluation. High-risk devices, on the other hand, need to go through safety tests and complete a thorough clinical evaluation.
Unlike registering a medical device that is tricky, cosmetic product registration in Indonesia is more straightforward.
- Import identification number (API) copy
- Trading business permit (SIUP) copy
- HS code list for all imported products
- Original and duly stamped application letter from the company director or the proxy
- Original and duly stamped statement letter from the responsible person
- Copy of a letter authorizing the importation (notary general certificate) stating that the company can do import
- Companies have to have a pharmaceutical industry permit to import drugs
Product Registration Process in Indonesia
Besides all the requirements above, an overview of the Indonesian product registration for food and beverage, food supplements, and medical devices and equipment will definitely help you:
In case of food, beverages, and food supplements, audit or so-called building inspections (PSB) is mandatory. In general, BPOM assesses two things in the beginning: the distribution or manufacturing facility, as well as the category of the product. A BPOM representative will visit your main product facility to determine the general conditions of the goods and their surroundings. They also want to evaluate the manufacturing process (if this is part of the business model).
Then they assess the product, especially on its risk to consumers. Based on the result, BPOM decides whether you can proceed to the evaluation stage.
This is when the BPOM will evaluate all the merits of your application, including the documents you have submitted. There are only three possible outcomes: approval, additional data needed, and rejection. Of the three, you should avoid the last since it means repeating the entire assessment process again.
If BPOM needs more information, you need to comply with the requirements within 50 days. Else, the agency will cancel your application, and you have to start from scratch. When you get the approvement, you will receive ML codes for your imported products.
For companies importing cosmetics, the process usually goes like this:
- Prepare all documents.
- Submit the products and their corresponding documents. Wait for the BPOM to provide you with the notification.
- Pay for the product registration.
- Receive a notification from BPOM after the payment.
IMPORTANT: Every product you wish to register should receive a corresponding notification. Any differences in size or colour could mean separate registrations. Moreover, all products go through the Indonesian National Standards (SNI) tests.
Halal certification in Indonesia is one of the biggest, if not the largest, halal markets in the world. It is already a billion-dollar industry, and experts believe it will continue to grow rapidly in the coming years. It is also highly regulated industry.
The country is currently trying to create a more uniform standard on the halal certification process. For example, by October 2019 all products going into the country must indicate whether they are halal or not. While one has the option to sell non-halal items, it could mean a loss of 200 million potential customers since Indonesia is the largest Muslim nation.
How Cekindo Can Help You in the Registration Process
Can you do the product registration in Indonesia by yourself? The answer is yes, but the risks outweigh the benefits. Therefore, Cekindo will help you with all your problems. We believes you have a greater chance of success of not only registering your product but also operating your business smoothly when you rely on professional services.
Here’s how our company can help you manage and avoid the common challenges that come with Indonesian product registration:
1. Confusing and Complex Regulations
Many regulations and laws govern thousands of products that flow into the country. While the country is notorious for being relaxed in their implementation, more often than not, they are strict. A violation of any of them could mean serious consequences. At the very least, you cannot register your product.
Under the harmonization rules of the ASEAN, it is implied that products approve in other participating countries should also be acceptable in Indonesia. But the country still has the final decision on its approval. In other words, it doesn’t matter if your products have already been approved in the Philippines or Malaysia. They will still go through the long product registration process in Indonesia.
2. Company Setup
Equally important, you need to remember that no foreigner can import products into the country as a sole proprietor. You need to have a more corporate setup. One of the easiest is a PT PMA, but it has a huge minimum investment. You can also appoint a nominee or partner with a local distributor. We have in-depth knowledge on the pros and cons for each of these options. We can provide you with the sound advice. Not only that, we can assist you in setting up your company including searching for a local nominee or a distributor.
3. Insufficient Documentation
The Indonesian product registration process takes time. Some of them can last for 2 months to a full year. For that reason, you need to get it right the first time.
One of the biggest reasons why project registrations get rejected or take a long time to get approved is the lack of complete and proper documents, but we also understand the challenge. Some of these papers should come from the country of origin, others from local laboratories. You also need to acquire the corresponding business import permits and licenses.
Cekindo saves you all the trouble. We handle all your paperwork, including the submission and status updates. For example, with halal, we can already perform a pre-audit, so you can make the necessary corrections before you apply the certification.
Indonesia is a country with so much economic potential, making it beneficial for you. Don’t waste such opportunity. Get help with product registration in Indonesia. Call Cekindo at +6221 30 061 58.
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