Indonesia’s new Omnibus Law has been lauded as its most crucial attempt at business reforms to attract investment and stimulate the economy. It has also made some earnest efforts to better the import and export landscape in the country in its bid to become the fourth-largest economy by 2045. This article will provide all vital information to make up for a guide to import to in Indonesia.
The Latest Regulation Update for Import to Indonesia
The ministry of trade (MoT) issues approvals, verifications, obligations, and licenses on import-export activities under Government Regulation No. 29 of 2021 (GR 29/2021), an implementing regulation of Omnibus Law.
Previously, businesses had to apply for one of three types of import licenses: API-U (General Import License); API-P (Producer Import License); and a Limited Import License, also known as API Terbatas (API-T). Now businesses will simply need a Business Identification Number (NIB) to commence their import or export activities as per GR 29/2021, which may be obtained through the Online Single Submission (OSS) system.
However, businesses should check with the Indonesian Harmonization System (HS) code, which is used to classify and calculate tax and customs rates on all types of items, before importing or exporting them. The classification is done because some items may require additional permits or registrations.
Understanding the process of Importing Goods into Indonesia
Required Documents
The following documents are required for shipment in Indonesia:
- Invoice
- Commercial Invoice
- Certificate of Origin
- Bill of Lading
- Packing List
- Insurance Certificate
- HS Code
- Material Safety Data Sheet
Note that, not all may be required at once, but it’s better to know about them in case the customs brokers or immigration authorities inquire about them.
Choosing The Right Freight Forwarder for Import to Indonesia
An appropriate shipping partner may greatly affect the delivery experience when it comes to international shipment. However, different shipping partners excel at different stages of the supply chain, so it’s better to look for the one that fits the requirement. For import to Indonesia, it is recommended to seek partners who possess the following qualities:
- Has local expertise
- Knows what can and cannot be shipped into the country
- Knows how to collect payment for the products.
Import to Indonesia: Understanding The Journey of The Goods
A package’s journey involves many steps in cross-border/international shipping:
- The First Mile: The shipment goes from the merchant’s warehouse to the port.
- Origin Customs Clearance – Clearing goods for export from the origin country.
- The Freight – The shipment moves from the origin country’s port to the destination port.
- Destination Customs Clearance – Clearing goods for import in the destination country.
- Distribution – Before the last mile delivery step, parcels arrive at a warehouse or distribution center to be processed and allocated to the appropriate vehicles.
- The Last Mile – The package is transported from the origin port to the customer’s residence.
Import to Indonesia: Tariffs and Taxes
In Indonesia, customs charges range from 0-170%, with most imported products receiving tariffs between 0% and 15%. The amount of tax is determined by the kind of goods imported and the HS code of the product. Moreover, it is necessary to pay customs charges and import taxes in advance, as well as notify customs of arriving freight.
Imports are subject to an import sales tax at the point of entry (save for products deemed necessary by the government), with rates ranging between 5% and 30%. Furthermore, Indonesia is a signatory to the ASEAN Free Trade Agreement, which stipulates that tariffs on imports from ASEAN member nations vary from 0-5%.
Ship your Product with an Ease Through Importer of Records
An Importer of Record is a legal service that allows firms to import items into the country through an import partner. An importer of record simplifies and fastens the customs clearance process. They have extensive local knowledge and are handy in tracking the export/import process of your goods. With an IOR by your side, you can focus on your core business activities without having to worry about costly delays.
How Can Cekindo Help?
If you plan to ship goods into Indonesia, you should be aware of the procedures and bureaucratic requirements. Cekindo, however, as an Importer of Record, offers an end-to-end import service for a wide variety of items, from medical equipment to cosmetics and food and beverage.
Cekindo registers your company with the least amount of fuss while you focus on the main business aspects. Our consultants can assist you in obtaining the appropriate product registration as well as licenses such as business and import licenses.
With our accounting and tax reporting services, we also give competent guidance and ensure you stay on top of all legal compliances.
