A step-by-step guide for importing into Indonesia

Indonesia, the world’s largest archipelago with some 17,000 islands, presents plenty of opportunities for foreign companies looking to tap on the purchasing power of the 250-million strong population.

Despite its potential, the fourth most populous country in the world is known for its complicated import processes and rigid regulatory requirements.

In fact, it lags behind major powers — ranking 73^rd — in the World Bank’s Ease of Doing Business index, which indicates an unconducive environment for businesses to operate in.

High logistics costs, complex bureaucratic processes and the uncertain regulatory environment are key factors impeding access into the rapidly emerging market.

To help businesses navigating the complexities of customs brokerage when importing into Indonesia, Yenna Lim, Head of Region – West and North, DHL Global Forwarding Indonesia, shares this basic step-by-step guide on how to approach the importation process into the country.

1. Prepare the list of mandatory import documents

Before the importation process begins, you first need to know the mandatory documents required for any importation into Indonesia. The general import licenses required include the Tax ID and the Single Business Number (NIB).

Other documents include purchase orders, packing lists, commercial invoices, bills of lading (BL), and other licenses or permits that are necessary depending on the respective Harmonized System (HS) Codes.

2. Identify and confirm the HS Codes of the incoming cargo

It is very crucial to know the HS Codes of the cargo that you want to import into Indonesia. “The HS Code is required to assess the acceptance of the cargo itself in Indonesia, and the permits required for importation,” said Lim.

For the uninitiated, the HS Code is a standardized system for classifying goods that are shipped around the world. The individual HS Code of the goods allows customs authorities to immediately evaluate which tariffs and duties, if any, to apply based on the criteria.

Inaccurate reporting can often result in massive fines, seized goods and delayed operations.

3. Know your consignee/importer of record

The consignee or Importer of Record (IOR) is recognized by the relevant authorities as the party responsible for the products being imported into the country.

Their responsibilities include ensuring that all goods are compliant by law, and are appropriately documented and valued.

As the importer of record also oversees the payment of duties, tariffs, and fees related to the import process, companies have to be in direct contact with the importer to anticipate the lead time and the costs involved, shared Lim.

4. Ensure transport schedule visibility to facilitate cargo manifest submission

 In Indonesia, the cargo manifest must be submitted to the customs authorities before the aircraft or vessel berths at its destination, which underscores the importance of having visibility of the shipment schedule.

“Any delays might incur significant penalties for the manifest, which is pegged at a minimum US$700 (€641) per document,” explained Lim.

“To avoid these additional costs, it is best for the contracted carriers or the Non-Vessel Owning Common Carrier (NVOCC) to log in to the online customs portal to obtain their manifest before their cargo arrives.”

For shipments with a longer lead time or special import requirements such as those for trade fairs and exhibitions, or temporary imports, importers need to plan the shipping schedule and obtain the necessary permits beforehand to avoid delays to the target delivery date.

5. Ensure all licenses and permits tally with the goods received

All import documents must tally with all import licenses, import tax ID, as well as the permits.

The failure to meet this requirement would likely result in penalties, amendments and, worse still, the possible detainment of cargo.

6. Clarify incoterms to determine buyer-seller responsibilities and calculate duties and taxes

Incoterms — industry-standard rules which define buyer-seller responsibilities for the delivery of goods under sales contracts — are generally used to justify the costs and risks responsibilities of transportation.

Besides that, in the importer declaration, duties and taxes are also calculated depending on the incoterms stated in the documentation.

7. Appoint a fully-compliant logistics partner

Last but not least, appoint a fully-compliant logistics partner to optimize and manage your supply chain with efficiencies in cost- and time-savings.

Contact our DHL Global Forwarding customs brokerage team to facilitate your imports into Indonesia today.