When conducting export business from Japan to Indonesia, cooperation is required not only with manufacturers and exporters in Japan but also with local partners in Indonesia. This is because, under Indonesian law, a single entity is not allowed to handle the entire process from exporting from a foreign country to importing and selling within Indonesia.

This article provides essential information and key considerations related to the various business entities and qualifications involved in exporting to Indonesia, based on the stipulations of the country’s import-related laws.

Regulations on Domestic Distribution in Indonesia

Three Business Entities Involved in Domestic Distribution

In the process of exporting from Japan to Indonesia (i.e., selling imported goods in Indonesia), the following three types of entities are involved in domestic distribution:

• Importers
• Distributors (Wholesalers)
• Retailers

The following rules apply to each of these entities:

• The qualifications for importers, distributors, and retailers are all separate.
• An importer may obtain the qualification to operate as either a distributor or a retailer—but not both.
• An importer without distributor qualifications is prohibited from selling directly to retailers. However, if a company holds both importer and retailer qualifications, it does not need to appoint a distributor.

In other words, for a Japanese company to conduct import sales in Indonesia, the simplest structure would be to acquire both importer and retailer qualifications and manage the entire process in-house. Even foreign companies can obtain these qualifications if certain conditions are met, such as having a local presence.

However, foreign ownership restrictions may apply to retailers depending on the product category. For example, retail businesses dealing in pharmaceuticals must be domestically owned, meaning that foreign companies are not allowed to sell directly. In such cases, cooperation with a local partner is required. Additionally, if a company does not have a local branch or office, it cannot operate as an importer or distributor, and will therefore need to outsource the entire import and sales process to a local company.

References:

• KEMENTERIAN PERDAGANGAN: PERATURAN PEMERINTAH REPUBLIK INDONESIA NOMOR 29 TAHUN 2021, p.39, Article 55
• KEMENTERIAN PERDAGANGAN: PERATURAN MENTERI PERDAGANGAN REPUBLIK INDONESIA NOMOR 66 TAHUN 2019, p.4, Article 19

Appointment of Distributors (Wholesalers)

Importers without a distributor license are prohibited from directly supplying goods to retailers. Therefore, such importers must work with a company that holds a valid distribution business license—such as a distributor, sub-distributor, agent, or sub-agent—to serve as an intermediary.

The requirement to appoint a distributor for supplying goods to retailers applies only to manufacturers located outside Indonesia, i.e., in cases involving imported goods. However, if a manufacturer supplies raw materials or capital goods to another manufacturer, the use of a distributor is not required.

References:

• JETRO: Indonesia Trade Management System – Import Regulations, p.5
• SURIA NATAADMADJA & ASSOCIATES

Types of Importers in Indonesia

There are several types of importers in Indonesia. The most common type involved in general commercial trade is known as the Importir Umum (General Importer).

Other types include:

• Solo Agent Importir: Import agents established in Indonesia by foreign companies.
• Importir Terbatas (Limited Importer): Local subsidiaries of foreign companies that import equipment, components, materials, etc., for use in their own production processes.

Regardless of the type, importers are fully responsible for the goods they bring into the country. If an importer violates any regulations or fails to assume responsibility for imported goods, they may face penalties such as the revocation of their importer license.

Reference: Tokopedia

Import Licenses in Indonesia

To engage in import activities in Indonesia, companies must obtain not only the basic documents related to business establishment and operations—such as a Business License (SIUP) and a Taxpayer Identification Number (NPWP)—but also a proper import license.

The commonly referred “import license” in Indonesia is the Importer Identification Number (API). According to a 2018 Minister of Trade regulation, importers are, in principle, required to obtain a Business Identification Number (NIB), which also serves as a valid API.

API (Importer Identification Number)

A number that identifies individuals or companies engaging in import activities. All importers must hold an API. One company is allowed only one API, and if the head office obtains an API, it may also be used by its branch offices.

NIB (Business Identification Number)

A number obtained through the Online Single Submission (OSS) system and required for general business licensing in Indonesia.

Reference: detikcom

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Company Formation in Indonesia

Types of Importer Identification Numbers (API)

There are two primary types of API, and a company may hold only one type:

1. API-U (API Umum) – General Importer

This is issued to companies that import specific goods for trading purposes. It is intended for general importers engaged in commercial resale.

2. API-P (API Produsen) – Producer Importer

This is issued to manufacturers that import capital goods, raw materials, auxiliary materials, or production support items for internal use in their own production processes. Holders of an API-P are prohibited from reselling or transferring imported goods to third parties.

Furthermore, manufacturers with an API-P are permitted to import finished industrial goods only for specific purposes such as storage, market testing, or after-sales services, and only if they obtain prior approval from the Directorate General of Foreign Trade at the Ministry of Trade.

※ In the case of tax-exempt imported goods, resale is allowed after two years from the date of import declaration.

There are also special API types, including:

• API Terbatas (Limited API): Granted to limited importers.
• API Khusus (Special API): Held by companies authorized to import certain regulated goods such as rice, corn, soybeans, and sugar as designated by the government.

References: JETRO, INDONESIA.GO.ID, Mekari

Items That Can Be Imported Without an API

In principle, only non-commercial items can be imported without an API. Examples include:

• Temporary imports
• Promotional goods
• Goods for academic research
• Disaster relief supplies
• Government-procured medical supplies
• Re-imported goods
• Returned goods from overseas buyers
• Non-sale product samples
• Personal moving cargo
• Personal shipments

Reference: JETRO

“Shipments” refer to items sent via door-to-door delivery services or postal services. Therefore, when a Japanese company sends goods ordered by an Indonesian customer using a courier service such as DHL, an API is not required.

Generally, items sent via door-to-door courier services are not subject to customs inspections involving the opening of packages. As a result, goods not falling under dangerous or highly regulated categories—such as clothing or footwear—can technically be brought into Indonesia without being detected, even if they are intended for sale.

Logistics providers used for import/export can be broadly categorized into couriers and freight forwarders. Among these, only couriers provide door-to-door services.

Given that courier-based imports do not require an API, it may seem that almost anything can be imported. In fact, even goods meant for commercial purposes can sometimes be mistaken for personal belongings (such as moving cargo), especially if the quantity is small and the accompanying documents are carefully prepared.

However, if discovered and reported, such activity cannot be justified. Even if undetected, running a business in violation of regulations poses significant risks and burdens for business owners, making it a highly discouraged practice.

Cases Requiring Additional Business Permits Beyond the API

Certain items—such as mobile phones, food and beverages, supplements, cosmetics, clothing, footwear, and toys—are categorized as restricted import items in Indonesia.

These restricted categories are defined by ministerial decrees from the respective regulatory ministries and may impose specific conditions for importation, such as:

• Limitation on entry ports
• Requirement to attach designated labels
• Mandatory product registration with authorities

To import such restricted items, importers must ensure that the product type, import method, and packaging meet regulatory conditions. In addition, importers must hold a business license either as a:

• Registered Importer (IT), or
• Producer Importer (IP)

Furthermore, an Import Approval (PI) is also required.

Reference: JETRO

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Free Trade Zones

Three Indonesian islands near Singapore—Batam, Bintan, and Karimun—are designated as Free Trade Zones (Kawasan Perdagangan Bebas dan Pelabuhan Bebas, or KPBPB). When conducting export/import activities in these zones, licensing is still required, but the procedures are significantly simplified.

For example, businesses that have obtained the necessary approvals can carry out exports and imports at the designated ports of these islands using a simplified document known as the Single Administrative Document for Customs Declaration (PP-SAD). Furthermore, import duties and value-added tax (VAT) are exempted in these zones.

References: JETRO, JDIH Kemaritiman dan Investasi

Collaborate with Local Partners to Ensure Smooth Business Operations in Indonesia

As discussed throughout this article, exporting goods from Japan and selling them in Indonesia requires cooperation with multiple stakeholders. Understanding the regulations on prohibited and restricted imports is also essential, making it critical to thoroughly review relevant import-related laws.

Moreover, since it is not possible to complete the entire process—from export to sales—within a single company, finding a reliable local partner is crucial. Identifying a trustworthy company with a proven track record in the relevant product category or industry sector is the first step toward success in Indonesia’s export business.

For information on import regulations or assistance in finding local partners, we recommend visiting the official website of JETRO, which served as a source for this article. Depending on the situation, the Embassy of the Republic of Indonesia in Japan can also be a valuable resource.