Indonesia, with its dynamically developing economy and growing consumer market, represents an attractive destination for international commerce. To successfully conduct business in Indonesia, particularly in trade, it is crucial to understand the nuances of its customs legislation. This article explores the key aspects of Indonesian customs legislation, its current state, and recent changes.
In recent years, Indonesian legislation has undergone significant changes in response to global economic trends and internal government reforms.
One of the key reform directions has been the simplification of cargo clearance procedures at the border. The implementation of electronic declaration has reduced document processing times and lowered bureaucratic barriers for businesses.
Additionally, the Indonesian government has actively taken steps to combat corruption in the customs sector. New control mechanisms for customs officers have been introduced, and penalties for bribery have been increased.
Furthermore, to enhance the efficiency of customs operations, the infrastructure of ports and border crossing points is being modernized. This includes the construction of new terminals, equipping them with modern cargo inspection equipment, and implementing automated goods flow management systems.
In 2023, several important amendments were made to the existing customs legislation:
• Increased duty-free import threshold: To stimulate small businesses, the threshold for duty-free importation of goods was raised.
• Tighter control on agricultural imports: Additional certification requirements for plant-based food products were introduced to ensure their safety.
• Promotion of high-tech exports: Measures were taken to reduce the tax burden on the export of high-tech Indonesian-made products.
• Expansion of the list of prohibited imports: New product categories (e.g., certain plastics) were added to the list of banned imports due to their negative environmental impact.
• Development of digital trade: Special regulations for cross-border e-commerce were introduced to protect consumer interests.
The Indonesian government continues to modernize its customs regulation system to simplify import and export procedures. This undoubtedly creates favorable conditions for international business. For foreign companies considering Indonesia for their business operations, it might be worth looking into the requirements for importing goods.
1. Market understanding
Before exporting goods to Indonesia, it's important to conduct market research. This will help understand demand for your product, competition, and potential market entry barriers. Studying local consumer preferences and cultural nuances is also a critical aspect of preparation.
2. Company registration
To import goods into Indonesia, you must register a company or find a local importing partner. For assistance with company registration, you can contact our specialists (insert link).
3. Obtaining permits and licenses
Depending on the type of goods, various permits and licenses may be required:
• API (Angka Pengenal Importir) – Basic importer license
• NPIK (Nomor Pengenal Importir Khusus) – Special license for importing certain categories of goods
• BPOM – Permit for importing food products, medical devices, cosmetics, and similar items
• Product Certification to Indonesian Quality Standards (if required)
4. Customs procedures
The customs clearance process involves several key stages:
Stage 1: Document preparation
To import goods, the following documents must be prepared:
• Invoice
• Packing list
• Certificates of origin
• Import licenses
• Quality standards compliance declaration (if required)
Stage 2: Customs declaration
A mandatory step when importing goods into Indonesia. It is important to accurately specify all information about the goods: its value, quantity, description, and HS code.
Stage 3: Logistics
Logistics organization includes choosing a delivery method: sea or air transport. It is also important to consider the logistics within the country—regional infrastructure varies, which may affect delivery times to the end recipient.
Stage 4: Payment of duties and taxes
Indonesian customs legislation is governed by several laws and regulations, the main ones being Law No. 10/1995 on Customs (as amended) and Government Regulation No. 10/2012 on Import Duties. These documents define the procedures for importing goods, their declaration, and the amount of customs duties. Let's look at this in more detail.
• Import duty (Bea Masuk): This is the main tax on imported goods. The rate depends on the product category and can range from 0% to 150%.
• VAT (PPN): Value-added tax is 10% of the goods' value.
• Excise duties: Applied to specific product categories, such as alcoholic beverages and tobacco products.
• Luxury goods tax (PPnBM): Charged on certain luxury goods, such as high-end cars.
Here are some examples of product categories with their respective rates:
Most food items have an import duty rate of around 5-20%. However, specific categories may have special conditions:
• Sugar: 30%
• Meat: 5% to 30% (depending on the type)
Electronic equipment is subject to various rates depending on the type:
• Computers and accessories: 0-15%
• Mobile phones: Can be up to 10%
Textile products are subject to a rate of 0-25%, with clothing often falling under the maximum rate.
Passenger cars are subject to duties up to 50%, with an additional PPnBM tax up to 125% for luxury vehicles.
The process of importing goods into Indonesia can be complex and requires careful preparation. If you need professional assistance to start your business in Bali or other regions of Indonesia related to import-export, our company Good Luck Group is ready to support you at any stage of your business.
