Insider Tips on Import and Export Business in Surabaya

Not only is the city of Surabaya less saturated than Central Java and Jakarta, but it also has a higher economic growth rate than both of the more developed regions, making it an attractive location for an export Surabaya business.

As a result, many investors have shifted their focus to Surabaya and focus on export and import, trading, manufacturing, resources, and infrastructure sectors.

Let’s first glimpse all the tips InCorp offers to start an import and export business in Surabaya and explain why it can succeed in the city.

Export Surabaya: The Background

Surabaya is the capital of the East Java province. More than 3 million people live in the city, and over 10 million more in the Greater Surabaya metropolitan area.

Due to the sea and air connections to Surabaya, this region is believed to be the gateway to East Indonesia. This gives it access to the Javanese interior and proximity to key trade routes between the Indian Ocean, Java Sea, the Straits of Malacca, and the Maluku Islands.

Surabaya’s strategic location connects east and west. Thus, the city is Indonesia’s second-largest metropolis and is increasingly well-known among local and foreign investors.

Home to the Tanjung Perak port and a burgeoning industrial and commercial business center, the city has been experiencing a wave of new developments. Investments are pouring in, such as transport links to Jakarta and other parts of Indonesia, an airport expansion, and the booming digital economy.

READ MORE:

• Investment Opportunity on The F&B Industry Surabaya
• How To Obtain KITAS Indonesia for Investment in Surabaya and Batam

The Economic Growth in Surabaya

The economy of Surabaya City reached Rp 715.29 trillion in 2023, as measured by the Gross Regional Domestic Product (GRDP) at current prices.

The city’s economy grew by 5.70 percent year-on-year (y-o-y) in 2023. From the production side, the highest growth occurred in the Electricity and Gas Supply sector, which grew by 30.84 percent. On the expenditure side, the highest growth was in the Non-profit institutions serving households, which increased by 14.45 percent.

In terms of production, Surabaya’s economic structure in 2023 was dominated by the Wholesale and Retail Trade and the car and Motorcycle Repair sector, accounting for 28.16 percent of the GRDP. Meanwhile, from the expenditure perspective, household consumption contributed 60.39 percent.

These are expected to grow substantially as Surabaya’s infrastructure and export and import facilities flourish in the coming years.

The Developing Infrastructure in Surabaya

As of 2024, several significant infrastructure developments in Indonesia, including in Surabaya, are making substantial progress:

Road Infrastructure

Road infrastructure is a key focus, and plans are in place to repair 519 roads, including 71 secondary arterial roads, 53 secondary collector roads, and 395 secondary local roads.

Additionally, flexible pavement work will be done at 21 locations, rigid pavement at 1 location, 12 bridges and 8 pedestrian areas, paving at 26 locations, and paving and drainage work at 121 locations.

Trans-Java Toll Road

This toll road connecting Jakarta and Surabaya is now fully operational, drastically improving transportation and logistics across Java. However, further expansions are underway to enhance connectivity to other island parts.

Port of Tanjung Perak

The port remains one of Indonesia’s busiest, with expansions to accommodate larger vessels and handle more cargo. Since the construction of the Teluk Lamong Terminal, the port has become even more efficient, incorporating eco-friendly technology and automation.​

Top Exports in Surabaya

In 2024, Surabaya, as part of East Java, remains a key export hub for Indonesia. Surabaya’s top three global exporters are the United States with 7,626 shipments, Indonesia with 1,642 shipments, and Singapore with 870 shipments.

• Total Export Value: In March 2024, East Java’s exports reached USD 2.51 billion, a 39.10% increase from February 2024 and a 34.57% rise from March 2023.
• Non-Oil and Gas Exports: These exports amounted to USD 2.45 billion, reflecting a 42.89% increase from February 2024 and a 38.16% rise compared to March 2023.
• Oil and Gas Exports: Although lower in value, they still contributed USD 58.78 million, despite a decrease from previous months​.

Setting Up An Export Business in Surabaya for Foreigners

You have two main options to start an export Surabaya business for foreigners. One is establishing a foreign-owned company (PT PMA) for import and export services. Setting up this type of company is straightforward if you meet all the requirements and obtain the necessary licenses and permits.

For a PT PMA in Surabaya, you need a minimum investment and paid-up capital of IDR 10 billion. Note that the company will only operate for eight months after registration.

Import-Export Permits and Business Licenses

Starting an export-import Surabaya business requires several permits and licenses. Most licenses must be applied for through the Online Single Submission (OSS) System, which aims to streamline the process and boost investment.

Many licenses have been consolidated. For example, import licenses previously known as API-U and API-P are now replaced by a Business Identification Number (NIB).

READ MORE:

• The Growing Potential of Property Investment in Surabaya
• Why You Should Establish a Manufacturing Company in Surabaya

Using a Third-Party Undername Export

An alternative to setting up a company is using a third-party under-name export service. This option is less complex and saves time, allowing you to enter the market quickly.

InCorp offers export services under the name, simplifying the process for foreign traders. You’ll need to provide a proforma invoice from the seller or manufacturer, and we will handle the rest, ensuring compliance and a smooth export process.

Exporting as a PT PMA Trading Company

If you choose to set up a PT PMA, you’ll need the following documents:

• Transport documents (airway bill, bill of lading, postal receipt, cargo receipt)
• Customs export declaration
• Item export declaration
• Commercial invoice
• Packing list
• Export permit
• Certificate of origin
• Insurance certificate

Depending on the goods exported, additional documents may be required, such as a Certificate of Quality, NPWP Taxpayer’s ID Number, and Export LKP.

5 Common Mistakes in Setting Up An Export Business in Surabaya

Starting and running an import and export Surabaya business can be complex, with various regulations and procedures to navigate. Many traders encounter common pitfalls that can affect their operations and profitability.

Ignoring Import and Export Regulations

Not understanding import and export regulations can lead to costly mistakes. Traders who are unaware of the relevant codes, procedures, and customs requirements may face:

• Increased business costs
• Penalties and fines
• Lower profits due to these penalties
• Delays in clearing goods

Staying informed about regulations is crucial. Participate in government programs designed for importers and exporters to ensure you understand the rules and minimize risks.

Failing to Verify Suppliers and Buyers

Not verifying the legitimacy of your trading partners can lead to problems. Ensure you thoroughly check the credentials of any supplier or buyer before entering into contracts. This helps avoid potential issues and ensures a smooth business relationship.

Incorrectly Declaring Goods’ Value

Under-declaring the value of goods to save on costs can have serious consequences. If discovered, it can result in legal action and damage your business reputation. Always declare the correct value and pay the appropriate customs duties to avoid interruptions in your import-export activities.

Neglecting to Insure Goods

Transporting goods always carries risks, including theft, damage, or loss. To protect your investment, ensure your goods are insured with proper documentation between you and the shipping company.

Hiring an Inexperienced Customs Agents

Choosing an experienced customs agent is essential. An experienced broker ensures all paperwork complies with regulations and guides the import-export process.

Only hire an experienced agent, leading to documentation errors, financial losses, or legal troubles. Check references and reviews before making your decision.

How InCorp Can Assist Your Export Surabaya Business

At InCorp, we offer expert customs agent services to help you navigate the complexities of import and export regulations. We ensure your paperwork is accurate and compliant, minimizing risks and streamlining your trading processes.

InCorp Indonesia can assist you with the following:

• Import Licenses: Obtain the necessary import licenses to ensure compliance with Indonesian regulations and facilitate goods’ smooth and legal entry into the country.
• Export from Indonesia: Handle all aspects of the export process from Indonesia, ensuring that your goods are correctly documented and compliant with local and international requirements.
• Importer of Record Services: Responsible for clearing goods through customs, ensuring that all import requirements are met, and managing the associated paperwork.

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