In this article, we will primarily discuss about the establishment of a trading company in Indonesia, how to set an import company, what the regulations concerning the import-export activities, as well as how to establish a representative office in Indonesia.
To start with, we will give you a brief description of what are needed and how long it takes to establish a trading company in Indonesia. To appreciate every rule and regulation set by the Government of Indonesia, every foreigner who wishes to establish a company in this country should follow and prepare the documents. Although there seem to be so many legal things that a foreigner needs to comply to be able to run business in Indonesia, there will always be a third trusted and legal party that can help you realize it. This third party will act on your behalf to take care of everything legally so that you can finally operate your business well in the future and take a huge profit from your investment in Indonesia.
There are several steps that you need to go through when you want to create your Foreign Direct Investment Liability Company in Indonesia (PT PMA), especially when you want to have a trading company that focuses on the import-export activities in Indonesia:
You can check our Company summary overview for more information here.
1. Negative Investment List
It is crucial to understand about this Negative Investment List. Some cores of business in Indonesia are forbidden for foreign investment, such as casino businesses, certain chemical industries, etc. There are also some other fields of businesses that is open for foreign investment. But still with restrictions, such as some agricultural, state crops and forestry businesses, energy and natural resources industries, etc. Consult your business activities openly with your consultancy agent to make sure that you are not violating the rule and regulation apply in Indonesia.
2. One license for one product section
Your business must only have one product section and you cannot run several product sections under one business entity. When you, for example, would like to trade certain agricultural products you cannot have a side business of trading marine products under the same legal entity. You must have two licenses for those two activities.
3. One API-P or API-U can only valid for one certain type of product.
It means that to import different products, you need to register different API-U or API-P.
4. An import company must also have Customs Identification Number.
This document is issued by the Directorate General of Customs and Excise (DGCE). It is part of the custom regulation in Indonesia. This number is valid as long as the company is still active in performing the business for the last 12 months. And does not violate any custom regulations.
This maybe is the best solution for any investor who wants to perform some trading activities in Indonesia, but hasn’t got a chance to establish a company here. KP3A is dedicated for foreign company that wants to open a representative in Indonesia.
The permit can be issued under these conditions:
When you want to open a KP3A in Indonesia, you need to assign a local or foreigner to sit as the Chief Representative Officer. Especially for foreign officer, domicile letter and working permit are needed.
Some other documents needed to apply for a KP3A are:
From the explanation, there are two ways of doing a trading activities in Indonesia. The first one is to establish a trading company, which requires a more complex process, documents, as well as budget. The second one is to open a KP3A or Representative Office in Indonesia. Which is simpler and relatively lower in cost. Every option has its of advantages and disadvantages. Consulting everything to your agent is the best way to be able to meet the entire legal requirements in Indonesia.