A Comprehensive Guide To Import And Export In Indonesia

Introduction

Indonesia, officially the Republic of Indonesia, sits at the nexus of international trade where the Indian Ocean meets the South China Sea and the Pacific Ocean. As the only G20 member state in Southeast Asia, the country has the largest economy in the region. Indonesia has considerable unrealised potential, and although there can be substantial costs and time barriers involved in investing and trading in the country, the returns are commensurate with the effort required to navigate them.

It is imperative for Australian businesses and individuals to understand the relevant rules and regulations before initiating import and export from and to Indonesia. This article seeks to serve as a comprehensive guide to import and export in Indonesia.

NOTE: The dynamic landscape of international trade means that certain new regulations may render certain portions of the following guide obsolete. Hence, we advise interested entities to engage freight forwarding companies (like Arc Freights), leveraging on our expertise to enjoy seamless one-stop service.

Preparatory Work

Import & Export Procedures in Indonesia

As determined by Government Regulation No. 29 of 2021 (Reg 29/2021), an implementing regulation of the Omnibus Law, businesses seeking to perform import or export activities in Indonesia will only require a Business Identification Number (NIB) to proceed. This can be obtained through the Online Single Submission (OSS) system.

However, additional import and/or export licenses from the Indonesia Ministry of Trade are required for businesses seeking to import specific types of cargo. These can be in the form of:

• An import registration license
• An import approval license for producer importers (companies that import materials used in the manufacture of their own products)
• A general import approval license
• An export registration license
• An export approval license

Businesses should also, prior to importing or exporting goods, check with the Indonesian Harmonisation System (HS) Code. This HS Code is used to classify every category of products, which is also used to determine the rate of customs duties and tax, as well as any specific import and/or export requirements for that product category.

Prohibited Goods in Indonesia

After classifying the goods, businesses and individuals need to check if said goods are controlled or prohibited for import, export, or transshipment. These prohibitions, if any, are applicable to both commercial cargo and personal effects.

NOTE: Businesses and Individuals may refer to the Harmonized System (HS) Code Search Engine for more information. For controlled goods, one will need to check the licensing requirements for your goods with the name and Contact Person of the respective Competent Authorities indicated in the search results.

Prohibited Imports

In Indonesia, the import of some products is regulated based on the Restricted and Banned Goods List, also known as the “LARTAS list.” A non-exhaustive list of the commonly prohibited imports is provided below:

• Hazardous and Toxic Materials
  • Substances that pose a threat to human health or the environment, such as chemicals, pesticides, and hazardous waste.
• Ozone Depleting Substances
  • The import of these substances, which contribute to the destruction of the ozone layer, is prohibited to protect the environment.
• Cultural Heritage Goods
  • Artifacts, antiques, and other items of significant cultural value to Indonesia, including those from archaeological sites or historical periods.
• Certain Types of Sugar and Rice
  • Certain types of sugar and rice imports are prohibited to protect domestic production and ensure food security.
• Used Clothing, Bags, and Sacks
  • The import of used clothing, bags, and sacks, is prohibited so as to prevent the spread of disease and maintain hygiene standards.

Prohibited Exports

Likewise, Indonesia also restricts the export of certain product categories out of a desire to promote sustainable development, protect its natural resources, conserve biodiversity, among others. A non-exhaustive list of the commonly prohibited exports is provided below:

• Mining Products
  • The export of certain mining products, like nickel ore and unprocessed bauxite, is prohibited to regulate the sustainable excavation of Indonesia’s natural resources.
• Scrap Metal
  • Scrap metal exports are similarly prohibited to prevent the depletion of domestic resources.
• Forestry Products and By-Products
  • The export of certain forestry products and by-products, like raw logs and unprocessed rattan, is prohibited to protect Indonesia’s rich biodiversity and stave off deforestation.
• Subsidised Fertilisers
  • The export of subsidised fertilisers is prohibited to control the availability and pricing of fertilisers for domestic farmers.

Failure to comply with the restrictions can and will result in hefty penalties, which include any of or a combination of the following: the confiscation of goods, fines, legal action, etc. Hence, it is imperative that businesses keep up to date with the relevant regulations and obtain the necessary permits. One way to simplify this procedure would be to engage freight forwarders.

Choosing The Right Freight Forwarder

As your goods navigate the complex landscape of international trade, a reliable freight forwarder can be the linchpin between seamless logistics and costly delays. With numerous players in the market, selecting the right partner is crucial to ensure your imports and exports move efficiently to and throughout Indonesia.

In addition to crafting the most optimal logistics solution, freight forwarders can also aid businesses and individuals in handling every aspect of door-to-door sea freight, air freight and more:

• First-Mile Delivery: The transfer of goods from the merchant’s warehouse to the airport or port.
• Export Customs Clearance
• International Freight
  • Air Freight
  • Sea Freight
• Import Customs Clearance
• Last-Mile Delivery

Methods of Shipping to Indonesia

Indonesia, known as the “Land of Thousand Islands”, is composed of 17,508 large and small islands and is the largest archipelago country in the world. Therefore, the freight modes available for shipments from Australia to Indonesia typically revolve around sea freight or air freight.

Sea Freight

Indonesia has four major national ports, namely Tanjung Priok, Tanjung Perak, Belawan and Makassar. The former is the country’s largest international port with an annual throughput of approximately 2.5 million TEUs. These four ports are listed as national first-class ports by the Indonesian government and are the main ports serving the vast majority of Indonesia’s import and export goods.

Air Freight

As an archipelago country, many companies exporting to Indonesia choose to use air freight to quickly transport goods to their destination. While Indonesia has no shortage of international airports, many require a connecting flight from the neighbouring Singapore or Malaysia.

Transshipment

Another method of shipping goods to Indonesia involves tapping on the advantages that Singapore provides as a free port. The world class maritime and transshipment hub boasts connectivity to 130 countries; with its provision of port dues concessions, including discounts for container ships and incentives for green initiatives, enhancing competitiveness and attracting shipping traffic.

Further Reading: A Comprehensive Guide To Import And Export In Singapore

Customs Procedures in Indonesia

Understanding and preparing the necessary documentation is critical to ensuring a smooth and efficient process.

Necessary Documents for Customs Clearance

Importers and exporters alike must submit all necessary documents and files to the local Customs Authorities before the goods can be processed for customs clearance. Depending on the situation, the authorities may require the following additional documents:

Import

• Commercial invoice, signed by the manufacturer or supplier as true and correct
• Bill of lading, in three endorsed originals and four non-negotiable copies
• Cargo Insurance Certificate
• Packing List
• Customs Import Declaration

Export

• Bill of Lading, Airway bill or other transport documents such as a postal receipt, cargo receipt;
• Commercial Invoice
• Customs Export Declaration
• Export Declaration of Goods (PEB)
• Packing List
• Cargo Insurance Certificate
• Export Permit
• Certificate of Origin

In addition to the above documents, when importing food, medicine, seeds, or chemicals, local authorities will usually require the importer to provide additional certificates to ensure that the goods comply with local laws.

• Prescription Medicines/Drugs
  • Apply for an Import permit (FDA Permit) from the National Agency of Drug & Food Control (BPOM).
• Seeds & Coffee
  • Obtain a quarantine permit from the Ministry of Agriculture.
• Plant products & Finished leather goods
  • The shipper must provide a Phytosanitary certificate while the consignee will need a quarantine permit from the Ministry of Agriculture.
• Cosmetics
  • Permit from the National Agency of Drug & Food Control (BPOM) is required.
• Mobile phones, accessories & components
  • The sender has to get a surveyor certificate, Import Approval by the Indonesian Ministry of Trade, and Imported Product Registration Number by the Indonesian Ministry of Industry.

Import and Export Tax

Imported products are subject to import sales tax upon entry (except for products deemed necessary by the government). Over the past decade, Indonesia has increased applicable tariff rates on a range of goods that compete with locally made products. This includes electronics, milling machines, chemicals, cosmetics, pharmaceuticals, wines and spirits, wire and wire nails and a range of products. The Indonesian government has also announced that it will go ahead with its plan to raise its Value-Added Tax (VAT) from 11% to 12% from January 2025.

Most non-agricultural products in Indonesia have tariffs of 35.5%, but tariffs on cars, steel and some chemical products exceeding 35.5% may remain unbound. In addition, Indonesia is a signatory to the ASEAN Free Trade Agreement, which stipulates a 0-5% tariff on imported products from ASEAN member countries.

Optimise Your Shipping Experience

Navigating the complexities of importing and exporting through Indonesia can be challenging, especially with ever-evolving regulations and logistics demands. To ensure a smooth and efficient experience, partnering with a reliable freight forwarder can significantly streamline your operations, minimize delays, and enhance your overall shipping experience. With expert guidance and support, businesses can stay on top of their shipments, from documentation to customs clearance and delivery. If you’re looking for a trusted partner to manage your international logistics needs, don’t hesitate to inquire about our comprehensive freight forwarding services.

Arc Freights is Australia’s leading Freight Forwarder offering QUALITY & RELIABLE logistics services in more than 140 countries. Having plied our expertise in ASEAN for nearly two decades, we are the trusted partner for logistics between Australia and Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. With expert knowledge, advanced technology, and a commitment to reliability, we provide seamless logistics management that helps you focus on what matters most—growing your business.