Undername Import: Importing Goods to Indonesia without Licenses and Incorporating

Undername import Indonesia

Opening an import company in Indonesia can take four to five months or even longer. And having import license is required for even very small shipments.

If you don’t want to wait for that long or cannot / don’t want to meet all the import company requirements there are  good news though – in this article we will tell you about an alternative, legal, method to get your goods to Indonesia without import license or even incorporating your company.

Import licenses

According to Ministry of Trade regulation (No.45/M-DAG/PER/9/2009), every importer in Indonesia must hold General Import License (API-U) or the Producer Import License (API-P).

API-Us are issued to companies that import goods to be traded, while API-Ps are issued to companies for importing goods not to be traded and the goods are for the importers’ own use as capital goods, raw materials or support materials, and/or to support production only.

Notably a company is not permitted to have both licenses. Simply saying, each importer may only have one type of API, either an API-U (as a trader) or an API-P (as a producer).

Table below shows revisions and their implications that came into force on 1 January 2016 by the Ministry of Trade/ MOT concerning the types of goods that may be imported by API-U and API-P holder.

Import License Regulation by Ministry of Trade/ MOT

Types of Import License (API)

No. 84 of 2012

(Previous Rule)

No. 70 of 2015

(New Rule)

API- U
  • Holders could only import goods under one section of the HS Code
  • A special relationship must exist between the API-U holder and its overseas supplier
  • Holders can import goods under several sections of the HS Code
  • A special relationship is no longer required
API- P
  • Holders were allowed to import industrial/ finished goods under certain criteria (e.g. test market products and complementary products) to be traded subject to obtaining a Producer Importer/ PI license from the Ministry of Trade/ MOT
  • Holders can no longer import industrial/ finished goods to be traded or transferred to other parties unless they are imported under an import duty exemption facility and have been used for own use for at least 2 years after the date of the Import Declaration Form

As we can see from the table above, the new development is likely to be welcomed by API-U holders as it no longer regulates the specific goods to be imported and more flexible to import goods to Indonesia for trading purposes. For API-P holders, however may not be good news as they can no longer import industrial/finished goods, including those to be traded.

Other than the major implications clarified above, some of the provisions of the new regulation are similar with those of the previous regulations. For that, we set out below a summary of the API provisions that are worth to take note :

APIs

Valid in the entire Indonesian territory including for branch offices conducting the same type of activities
Valid as long as the holder continues its business activities but must be re-registered with the issuing authority every 5 years
API-Us and API-Ps for all foreign capital investment companies are issued by the Investment Coordinating Board/ BKPM
* Regulation 70 provides a list of circumstances in which an API will not be required, such as for importing temporarily imported goods, promotional goods, goods for research and goods for scientific development
Issued prior to the promulgation of * Regulation 70 are still valid, but must be adjusted by 30 June 2016
Issued prior to the promulgation of * Regulation 70 will remain valid until their expiry

* The new regulation was enacted by the MOT on 28 September 2015 and is set out in Minister of Trade Regulation No. 70/M-DAG/PER/9/2015 on Importer Identification Number as ‘Regulation 70’.

This new regulation, known as Regulation 70, has come into force on 1 January 2016 and revoked the previous regulations.

Process of becoming an importer in Indonesia

You must obtain an Importer Identification Number (API), which is distinct depending on whether imports are done for production (API-P) or distribution (API-U) purposes.

The licensing process for becoming an importer is complex and again, depending on the type of goods that you wish to import, specific licenses might be required by the Indonesian government.

Many investors we talk with are put off by the extensive bureaucracy involved in becoming an importer. I recently advised a European food manufacturer who wants to sell their products in Indonesia.

Below is how the process looks like. I skip some details for the sake of simplicity, but these are the API-U holders’ requirements and standards for food imports into Indonesia. Note that importing general use products (i.e., non-children’s products) may not require you to obtain a recommendation for approval from DEPTAN, but other requirements may apply depending to your product category.

  1.   Incorporating limited liability company in Indonesia – 6 weeks
  2.   Permanent business license (IUT) – 1 to 2 weeks
  3.   General import license (API-U) –  1 week
  4.   Customs identification number (NIK/SRP) – 1 week
  5.   Recommendation by Ministry of Agriculture (DEPTAN) – ± 4 weeks
  6.   Approval by National Agency of Drug And Food Control – ± 3 weeks
  7.   Ministry Of Trade Approval – 2 weeks

The rules which are detailed above are the API-U holders’ requirements and standards for food imports into Indonesia. Importing general use products (i.e., non-children’s products) may not required you to obtain a recommendation for approval from DEPTAN, but other requirements may apply depending to your product category.

Also note that IUT is only required by companies with API-U, which means you won’t need to have IUT prior to proceed API-P.

Referring to the procedure for the estimation time above, we can see that it takes at least 4 to 5 months to become an importer in Indonesia. If you are lucky, you might need couple of weeks less. But more often than not things in Indonesia take more time than expected.

If you don’t mind waiting for that long, then we can provide the full import company setup service for you. However, there are several scenarios to why we think setting up your own import company is not suitable.

  • You want to import your goods faster than in 4 months
  • Your Indonesian legal entity does not have or cannot apply for import license
  • You only need to import goods a few times and thus do not want to apply for another license
  • You do not want to spend time learning how to work with the Indonesian customs to make sure your goods do not get delayed at the border

If you want to start selling right now and not wait for months to get your papers done, we strongly advise you to use our undername importer service as a solution.

Undername importer as a solution

Undername importer is a company that already has the import licenses for the product you want to bring to Indonesia.

By using our company’s service of an undername importer, there is no need of you to obtain any import license or permission to import your products to Indonesia.

To help you minimize delays and additional costs, our company is ready in administering the aforementioned steps for you.

Our undername importer service involves being a total transporter, supply chain management, handling freight forwarding and arrange customs clearance to get your goods passed the customs and to Indonesia safely.

How it works

It is very simple actually – you have a product you want to sell in Indonesia and Indosight has the license to do it. Just recently we signed a contract with a huge electronics manufacturer for bringing their electronic products to Indonesia using our undername service.

This is how the process looked like :

  • The client consulted with us what kind of electronic products he wanted to send to Indonesia, and we helped him finding an undername importer since we did not have a license to that particular product
  • We agreed on the price (incl. undername license fee and a certain percentage of the transaction value as commission). Exact commission rates depend on the company and industry, but they should not be higher than few percentages.
  • Client prepared necessary documents for us to import his goods into Indonesia
  • Client completed necessary detail as a shipper, such as Bill of Lading, Packing List, Commercial Invoice, Certificate of Origin, Import Declaration Form (Pengetahuan Impor Barang/ PIB)
  • Client sent us the goods he wanted to sell and we paid the freight forwarder and provided them with supporting documents
  • Upon arrival, the goods were processed into 3 channels :

o   Green – The goods are cleared to go

o   Yellow – Cargo exit requires additional document. After the approval, goods can be acquired through Cargo exit order (Surat Persetujuan Pengeluaran Barang/ SPPB)

o   Red –  The goods need physic check by Customs of imported commodity

  • After the goods were successfully processed, we would receive the documents which client gave us from the freight forwarder and client will keep the copies

There are many companies offering undername importer service in Indonesia, and if we already have the license in your industry, we can start the importing immediately. If not, we will immediately use our network to get the license – and the process will not take more than 1-2 days.

The benefits of using Indosight as your undername importer

The biggest benefit is that Indosight guarantees your products will arrive in Indonesia and get through customs safely since we have created an efficient trade network with our partners who have massive expertise and experience of international import freight.

Other main benefits include the following :

  • You do not need to wait and get to start your importing immediately
  • You do not need to worry about how your products could arrive in Indonesia without incorporating or having an import license

So, if you are thinking to sell your products in Indonesia, now is the perfect time- and there is no better time to start then today. Moreover, importing your products can provide an enormous financial boost and it can come with no cost to you.

We work with companies in all industries to provide you with client references and we know exactly which types of licenses you need. Just keep in mind that for different industries the import licenses and approvals required can be quite different.

Let us help you sell your products in Indonesia today. We understand that the excitement of shipping your product to Indonesia can be dampened by the licenses, regulatory, logistical, and financial hurdles. But that is where we can help.  

You provide the product and we provide the undername importer service.

That’s it, we hope this article helps you to get your trading business started faster. If you still wish to become an importer yourself, we suggest you to first use our undername importer service while in the same time let us start the process of helping you becoming an importer yourself.

 

Indosight

Market entry services in Indonesia

Indosight provides legal and payroll services to companies entering and expanding in Indonesia. Get in touch with our consultants regarding our company registration, payroll, compliance or visa services.


The information provided will remain confidential to Indosight and will only be used to schedule and prepare for the meeting.

30 thoughts on “Undername Import: Importing Goods to Indonesia without Licenses and Incorporating

  1. Jose Gomez

    My company is a wine trader. Actually, we export wines from Spain and Portugal to Malaysia, Singapore, Thailand, and Vietnam.
    We would like to find the right way to import wines in Indonesia.
    Please let me how to proceed according with your services.
    Kind regards,
    Jose Gomez
    GOBO Wines

    • admin

      Hi Jose,

      thank you for the question! You’ll need besides importer also a local distributor, because as foreign owned company you can only be wholesaler.

      I asked my colleague to prepare you a customized offer and send it to you privately.

      Talk soon,

      Lauri

  2. Hendrick

    We have had problems since last year in importing our toy products into Indonesia to some local distributors and buyers. Somehow, those distributors don’t have import licences which makes me wonder the reason. Anyway, after speaking to some logistic companies, as you mentioned, some can import the toys for us but then the charges are more than 10 times that of freight. It is more than 1/3 or half of the value of the product of container. Do you know of any directory where I can find an importer of toy products which charges low fee, like you mentioned, a few %?

    Do you know after incorporating a company with an import licence, if successfully, will there be any “unnecessary troubles” or “unnecessary disturbance” from the authority afterward?

    Thanks.
    Hendrick Cheung

    • admin

      Hi Hendrick,

      For importing toys, the importers needs to have special importer identification number to be able to import toys.

      The charge really depends on which importers are you working with. And the few % charges also depends on what product you are importing. For example, for cell phones cellular, they charge per phone. For raw commodities they charge per container with fixed fee.

      We do have the directory for toys importer, we can also do the research on how much each of them is charging for specifically your toys, so you can make comparison.

      I will send you through email directly more details.

      Marlissa

  3. Effendy

    Dear Hendrick,

    There are so many categories about toys in our import license. If you can share what kind of toys you are importing, I might be able to help. I am also importing toys, educational toys to be precised. You can also contact me through my email.

    • Hendrick

      Hi, I thought there’s only one import licence type for any sorts of toys for children. I was planning to import electronic (remote control), hard plastic and die-cast toys. Thanks.

  4. Mikhail Kevin

    We are conducting in export steel products origin China. Currently we already export our products to SIngapore,Malaysia,Myanmar,etc. Right now we want to expand our market to Indonesia. But currently we haven’t get a way to export our product to Indonesia since besides needed an API-U and for steel products they also needed ac SNI(Indonesia standard License) certificate as needed in document importation. Do you have any way to skip this kind of procedure? Because it’s kind of headache for us to take care the bureaucracy in Indonesia.

    Looking forward to your reply.

    Thanks.

    Best Regards,
    Mikhail Kevin

  5. Heru Zeng

    Dear Sir,

    Our company is Rugs and Mats producer with API-P as our license.
    To extend our business field in Home Textile (such as doormats, hand towel etc.), we intend to import finished goods. As a new regulation, API-P is not allowed to import finished goods.
    Do you have someone in your network who is able to import these goods?
    Thanks

    Rgds
    Heru Zeng

  6. Gary

    I am planning to import a beauty product and makeup product directly from
    Korea, is there any restriction on importing beauty product? Do you have any undername importer can refer to me?

    Thank you very much!
    Gary

  7. Chris

    Is there a website where I can check whether or not a company has an import license?

  8. Bem

    Hi,

    We want to expand our overseas market particularly in Indonesia. In relation I would like to know what are the requirements needed to become an importer?

    Thanks

    Bem

    • Indosight

      Hi Bem,

      It depends on which products you will be importing. We sent you an email already so that we can give you specific advice.

  9. stephannie

    Dear Indosight,

    hi, im stephannie, i want to ask about Import using door to door methode, is it legal?? since we havent have our import license so we thinking about door to door methode (suggestion of the fowarder company).

    and how about the tax? because as their information the cost is including taxes. i kinda confuse with the regulation, and im affraid about the tax problem, since we dont have any billing about the taxes.

    Thank you in advance.

    • Indosight

      Hi Stephanie,

      Door to door services are legal and as long as they have a valid import license it’s safe. They will be paying the customs and taxes so it’s between You and the provider how to handle the payments and taxes.

      Lauri

  10. Aigul

    Dear All!

    I would like to Export from Indonesia to Kazakhstan, how it will work? Do i have to get licence or better to use licence of other company? If you know how i can contact those companies pls. let me know

    Thank you
    Regards
    Aigul

    • Indosight

      Dear Aigul,

      Whether to set up your own import company or use the services of a logistics firm depend on your volumes and whether it’s a regular or one time shipment. You can send us specific details to contact@indosight.com and our consultant will be in touch shortly.

      Lauri

  11. Ignatius Chua

    For importing of seedlings (for growing in Indonesia for their timber), can we use undername importer? I assume they would know not only the documentation but also whether quarantine etc are needed. If that is true, can you recommend any?

    • Indosight

      In order to reply to this question our consultant will have to study your industry and contact potential partners. We’ll be happy to provide such service to you, please send us email to contact@indosight.com for further discussion and quotation.

  12. jack

    we are cosmetics maker base in japan, and we would like to export our products into indonesia.
    what are the documents required?

    • marlissa

      Hi Jack,

      I have sent you information on the cosmetics exportation to Indonesia!
      Thanks

  13. Nia

    I am planning to import a beauty product and makeup product directly from Thailand. is there any restriction on importing beauty product? Do you have any undername importer can refer to me?

    Thanks.

    • marlissa

      Hi Nila,

      We can do the importation of cosmetics for you and register the products to BPOM/FDA.
      I have sent you an email for more information!

  14. Priscilla

    Hi, we are also interested in what is needed to export our products into Indonesia. Can you email me? Thank you!

    • marlissa

      Thanks Priscilla for stopping over!
      I have sent you an email

  15. Laurent

    Hi~ can you inform me about how to import products using door to door method from Korea to Indonesia and some provider that provide that kind of method. Thanks 🙂

    • Angeline Taniwan

      Dear Prisel,

      The method you want is for selling the products or for the importation? You shall let us know your business activities and the kind of products you are importing first. You can talk to our consultant regarding this by kindly drop us an email to contact@indosight.com

      Regards,
      Angeline Taniwan

  16. Adelene Tan

    Hi, we need someone. To contact us regarding import of nail polish into Bali.

    • Angeline Taniwan

      Dear Adelene,

      If you need any assistance or have queries regarding import of your product into Bali, please send your inquiry via e-mail to bali@indosight.com and you will be contacted by one of our consultants in Bali.

      Cheers,
      Angeline Taniwan

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