Import Licenses for Doing Business in Indonesia

For businesses to import goods into Indonesian custom areas, it requires an import identification number known as API. There are two types of API:

• A General Import License or API-U may be used to import finished products or to trade goods with a third party. Licenses are issued by the Head of the Provincial Trade Service Office of where the company is based and take around 2 months to obtain. The API-U is valid for 5 years and then subject to renewal.
• A Producer Import License or API-P that may be used to import raw materials, unfinished products and goods for the production process for the company’s use only. Licenses are issued by BKPM. (Please see Useful Documents - Application for Producer Importer ID Number)

Licenses are limited to a particular industry area and do not permit importation of goods not related to the sector of business.

Under regulations issued by the Ministry of Trade No.45/2009 and amendment No.17/2010, companies may only have one type of import licenses as of 1st January 2011. In order to carry out imports of both finished products and raw materials, the business must be divided into separate entities to obtain a license. Transfers of goods between the business entities are still regarded as third party transaction and therefore subject to VAT.

Ministry of Trade Regulation No.39/2010 has allowed holders of API-P licenses to import certain types of finished product needed for the production process only. There has been wide scale pressure to revoke this as it is seen to only advantage foreign companies but as per mid 2011 it is still in effect.