Cekindo Business International is now InCorp Indonesia. Learn more.
InCorp offers a comprehensive range of solutions to ease the company registration process and help you create a viable roadmap for your business.
Get assistance from experts with a decade of experience in assisting international business owners expanding into Indonesia.
Avoid any bureaucratic complexity when closing your company by engaging with our experienced legal advisors.
What type of legal entities should you choose to register a company in Indonesia? We can assist you in choosing which is the best one to grow your business.
To help businesses survive during this unfortunate time, InCorp provides corporate recovery in Indonesia and insolvency services.
Granting an environmental permit in Indonesia needs an Environmental Impact Analysis (AMDAL) in advance.
Obtaining property & land ownership in Indonesia offers some challenges for foreigners. However, buying property in Indonesia is attainable with specific resources and documents.
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InCorp provides Virtual Office services Indonesia in various locations: Jakarta, Bali, Semarang, Surabaya, and Batam.
Business process outsourcing in Indonesia is a viable option to streamline bureaucratic complexities that hurdle your business expansion objectives.
InCorp offers a complete range of accounting service Indonesia, from tax reporting to auditing.
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Learn how to go through halal certification in Indonesia directly from experts successfully.
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InCorp's transfer pricing advisory services in Indonesia are marked by the objective to support our clients' business needs.
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Effective from October 2019, the government of Indonesia will enforce the mandatory halal certification and labeling measures for halal products in the country. Thus, Cekindo urges businesses and entrepreneurs to act appropriately and as soon as possible to avoid any unnecessary penalties.
With over 260 million population and 90% of them are Muslims, Indonesia remains the largest Muslim country in the world — making it among one of the biggest markets for Halal products and services. Along with the boom in non-food and beverage brands, introducing halal certification is definitely a sure-fire strategy to win the hearts of the huge Muslim market in Indonesia.
Currently, the total value of halal imports to Indonesia amounts to US$163 billion, showing that there is ample room for investors and manufacturers to penetrate the market.
However, Indonesia is enacting halal certification and labeling as mandatory for halal products under the Halal Law. Products subject to this law include goods and services related to food, beverages, pharmaceuticals, cosmetics, chemicals, biological products, and genetically modified products.
This law will be officially implemented in October 2019.
So is it too late to secure halal certification in Indonesia now? Not exactly — as long as you keep on reading this guide and know what you need to do to proceed with the application immediately.
Literally, “halal” is an Arabic term that means “lawful or permissible”, not only does it encompass food and drink but everything in our daily life.
While the explanation of halal could be a little more complicated, the basic concept of halal is as such: food, drugs, cosmetics, and other products that do not contain any ingredients that are considered ‘haram’.
“Halal” must be traced back to the source of Muslim food or touch, from raw materials to product handling, including factory facilities, manufacturing machinery, packaging, storage, logistics, and even the retail stores.
Haram is the opposite of halal, and it means “forbidden or proscribed” by Islamic law. Everything that contains pork, animal blood, alcohol, dead animals, and poisonous animals is deemed haram. Other than that, slaughtering animals without following the Islamic Law is considered haram as well.
A halal certificate is a document to justify that halal products sold to and used by the Muslim population are in compliance with Islamic Sharia laws. For businesses, halal certification is the only way to label their products as halal.
Related article: Most Common Questions about Halal Certificate
As mentioned above, the National Body of Halal Assurance (BPJPH) will be the highest authority to issue halal certificates to businesses, starting from October 2019. Besides, MUI, as one of the highest authorities on Islamic affairs in Indonesia, will be in charge of issuing the Halal fatwa and setting up the halal compliance standard.
There are two major authorities under MUI — The Food, Drug and Cosmetics Assessment Agency (LPPOM), and MUI Fatwa Committee. Both of them are in charge of the halal audit, assessment, and declaration.
Although BPJPH is responsible for halal certificates issuance, the process of verifying if a product is halal will be done by the Halal Inspection Institution or Lembaga Pemeriksa Halal (LPH) in Indonesian. LPH will inspect and check if the production process, raw materials, and storage are halal – both inside and outside the manufacturing facilities.
LPH is usually set up by the government but may be established by public institutions such as universities as well.
To perform the verification operation, LPH must first be accredited by BPJPH. Then, the approved LPH needs to employ a minimum of 3 inspectors, is equipped with its own laboratory. If the LPH does not have its own laboratory, it can cooperate with another party with a laboratory.
It is important for businesses to know that all non-registered halal products will be deemed as non-halal this year (2019) with the enactment of the new halal law.
Noticeably, to certify your halal products in Indonesia makes a lot of sense. Halal labeling on products seems to be a lot more appealing to Muslims who try to avoid any possibility of consuming or getting into touch with haram products.
While the process of halal certification in Indonesia might seem tedious and burdensome due to the paperwork to comply with the requirements, the procedure could be a simple one with Cekindo’s registration assistance:
The entire process will take approximately 60 days. The validity of halal certificates under BPJPH is four years. The validity may not apply if a product’s composition has been modified.
Even though it might not be late to secure your halal registration in Indonesia, be aware that there are thousands of products that have not been certified yet. Taking in mind that BPJPH estimated it could issue about 7,000 halal certificates every year, long delays are expected, and failing to meet the deadline of October 2019 might not only result in sanctions but a drop in your sales.
Criminal sanctions are introduced under the new Halal Law and may be imposed on businesses with halal products as well as the LPH. For companies with halal certificates that fail to maintain their products’ halal quality will face up to IDR 2 billion fines or 5 years of imprisonment.
Besides, LPH that fails to protect the trade secrets such as the halal product formula which they evaluate will be subject to IDR 2 billion fines as well, or up to 2 years of imprisonment. This is the first time that criminal sanctions will be imposed on halal non-compliance.
According to Indonesian halal law, products or materials with halal certification from outside of Indonesia will need to be registered at BPJPH. Only then they can be distributed and sold in Indonesia with legal halal status.
However, halal certificates issued by foreign certification institutions that are not listed in the regulation will have to go through BPJPH assessments.
Receiving a halal certification for your product is very important if you plan to distribute in Indonesia. Cekindo can help ease the process and keep you on track with your application, as well as many other product certifications and registration.
An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.