plant quarantine clearance indonesia

How to Obtain Plant Quarantine Clearance for Imported Seeds Business in Indonesia

  • InCorp Editorial Team
  • 2 February 2022
  • 5 minutes reading time

The growing consumption of food and vegetables has resulted in a spike in demand in recent years for higher quality and healthier food. This data represents the largest growing market sector – the middle and upper class – which includes over 148 million people.

This in turn has encouraged a major import of fruit, as seen through the 36% increase of fresh fruit imports in 2017. Imports reached USD$1.05 billion and up to another 10% (USD$1.2 billion) in 2020 due to local fruit producers failing to meet consumer demand.

According to a report from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES), the demand for food in Indonesia is expected to quadruple by 2050 due to extensive economic growth and the country’s high demand for a more diverse lifestyle. This could very well result in a heavy import supply to meet ever-increasing needs, marking a significant market for the future of the importing agriculture industry in Indonesia.

The Importance of Fruits & Vegetables Boosts Demand for Imported Seeds

Well on its way to rise up the ranks on economic growth, the increasing middle-class population now dictates nutritional security and spotless diet plans which sees local farmers cultivating more crops and investing in higher, better quality seeds to improve yield for increased productivity. This sees a need in innovating farm-level farming as an attractive business opportunity to meet demands

A growing issue is that the demand for domestic horticultural products is quickly outpacing the supply, which makes increased imports from neighboring countries inevitable. As the largest market in Southeast Asia, Indonesia successfully imported a volume of 689 metric tons of vegetable seeds in 2019 with a revenue of USD$130 million.

As a solution to this, the government has to rely on importing vegetable seeds from external sources instead of ready-to-consume commodities, which tackles the reliance on imported products. This creates business opportunities for foreigners to establish a commercial entity with an import license to bring in the required seeds.

Importing Fruit and Vegetable Seeds into Indonesia: Getting Plant Quarantine Clearance

A plant quarantine clearance is crucial to protect the agriculture of a country against possible ravages of unwanted plant pests or pathogens should they get introduced. This is why when bringing imported fruit and vegetable seeds into the country, the importer needs to apply for a quarantine inspection, obtain a clearance permit, and register your product to start supplying the seeds to the local farmers.

The following is the procedure for obtaining a Plant Quarantine Clearance.

  • Service users apply for a quarantine inspection addressed to the Head of Agriculture Quarantine Department in all International Airports in Indonesia.
  • Appointed officials issue a letter of assignment to the Plant Organism Control Officer to carry out administrative checks and health checks.
  • The Department then issues an official Letter of Approval based on the recommendation of the Plant Organism Control Officer for further Plant Quarantine Actions.
  • Officials then carry out quarantine actions and conduct laboratory tests whenever necessary. This is then followed by a report on the results.
  • Report of results is submitted to the Head who then decides further action.
  • A Plant Quarantine Release (Phytosanitary Certificate) is issued for the operational service section.
  • A receipt of proof is issued to the service user as a measure to show that payment of Non-Tax State Revenue for Plant Quarantine Release is completed.
  • The service officers then submit the Quarantine Release Certificate after showing proof of payment.

When applying for said permit, each item will first be sorted according to its risk to the country.

Low Risk Medium Risk High Risk

Any imported horticultural products are immediately classified in the high-risk position wherein it needs the Phytosanitary Certificate from the country of origin and an entry permit from Indonesia’s Ministry of Agriculture to be processed. The list of seeds are as follows:

 

Import of Chrysanthemum Seeds from Japan Import of Chrysanthemum Seeds from Holland
Import of Phalaenopsis Orchid Seeds from China Import of Phalaenopsis Orchid Seeds from Japan
Import of Phalaenopsis Orchid Seeds from Taiwan Imported Corn Seeds from Thailand
Import of Rice Seeds from the Philippines Imported Broccoli Seeds from Holland
Import of Raspberry Seeds from Holland Import Strawberry Seeds from Holland
Import of Lilium Seeds from Holland Imported Tomato Seeds from the Philippines
Import of Phaleonopsis Orchid Seeds from Thailand Import of Dendrobium Orchid Seeds from Thailand

How Cekindo Can Help

Overcoming regulatory challenges can sometimes be overwhelmingly confusing if you don’t know how to navigate your way through the sea of paperwork. Being your local representative here in Indonesia, Cekindo has years of experience in existing local relationships with all domestic industries. Not only will we make setting up your company more effortless, but we will also help you avoid pitfalls and carry out the research you may need for effective market strategies.

Verified by

Ales Cina

Consulting Manager at InCorp Indonesia

Aleš manages solution delivery at InCorp Indonesia, optimizing incorporation processes and client relationships. His experience in internal auditing, retail, and sales offers valuable global insights. Aleš, with a degree in Economics and Finance from the Czech Republic, helps clients navigate cross-border business challenges, focusing on cultural and legal insights.

Frequently Asked Questions

    A newly established PMA company in Indonesia is typically provided with import facilities, tax holidays, tax allowances, or investment allowances.

    • Import facilities
      Investors in Indonesia, particularly in manufacturing, may benefit from import tax exemptions for capital goods and raw materials through the Master List Facility. The imported goods must meet specific criteria, such as not being produced locally or not meeting industry demand despite local production.
    • Tax holiday
      The government offers CIT reductions of 50% or 100% for 5–20 years for listed pioneer industries, based on investment value. After this period, a CIT reduction of 25% or 50% applies for two fiscal years. Non-listed sectors can also apply by meeting criteria demonstrating pioneer industry status.
    • Pioneer industries are industries that have a wide range of connections, provide additional value and high externalities, introduce new technologies, and have strategic value for the national economy.

    • Tax allowance
      For companies in certain designated areas or regions, the government may provide the following tax concessions:
      Net income reduction up to 30% of the amount invested, prorated at 5% annually for six years, on condition that the assets invested are retained for the same duration.
      Accelerated depreciation and/or amortisation deductions
      An extension of tax losses carried forward for a maximum of ten years
      A 10% (or lower if treaty relief is available) withholding tax rate on dividends paid to non-residents
      The applicant eligible has to meet high-level-criteria for the above tax facilities:
      High investment value or for export purposes
      High manpower absorption
      High level of local content
    • Investment allowance
      The government offers a reduction in net income of up to 60% of the investment, distributed at 5% annually over six years of commercial production, contingent upon the retention of invested assets for the same duration. To qualify, applicants must meet business line eligibility criteria and employ a minimum of 300 Indonesian workers in the project.
    • Super deduction
      This facility could be granted to certain businesses, such as:
      60% reduction in net income of the amount of tangible fixed assets invested for labor-intensive industries, distributed throughout a certain time frame.
      Up to 200% reduction in the gross income of the amount spent for human resources development in certain competency activities.
      Up to 300% reduction in gross income of the amount spent for certain R&D activities in Indonesia.

    Yes, in a foreign-owned (PT PMA) company, a foreigner can be a director or a commissioner

    A nominee arrangement is an arrangement that uses another person’s name as a subject. In Indonesia, it is prohibited. This restriction aims to prevent situations where a company is owned by one party but beneficially owned by another. According to the law, any nominee agreement between a local party and a foreign investor is deemed null and void.

    Under Indonesian Company Law, shareholders can hold shares with various preferential rights, such as voting rights, nomination rights for board members, priority dividend or liquidation proceeds, and options for conversion or withdrawal after a set period.

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The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.