Legal & Regulatory

Distribution Arrangements and Import Licensing in Indonesia      

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By: Dezan Shira & Associates
Editor: Samuel Glickstein

In March 2016, the Indonesian Ministry of Trade (MOT) issued Regulation No. 22 of 2016 on General Provisions on the Distribution of Goods. This law explains how goods can be distributed directly and indirectly within Indonesia. It defines a number of terms in Indonesian law including, distributors, sub-distributors, agents, sub-agents, grocers, retailers, etc. Furthermore, this regulation states that importers and distributors must go through retailers to sell their goods to consumers.

However, prevailing analysis on Regulation No. 22 indicates that changes it puts forward are meant for domestic companies and not foreign investment.

Related Services from Dezan Shira & Associates RELATED: Corporate Establishment Services from Dezan Shira & Associates

Distribution Via Local Partnerships

Foreign investment (PMA) companies are currently subject to regulation under Ministry of Trade Regulation No. 11 of 2006, which prohibits PMA companies from directly selling their goods to retailers. According to this regulation, PMA companies have to appoint a local distributor/agent to sell goods to a retailer. Then the retailer can sell the original products to consumers. Therefore, PMA companies must add another layer to their distribution chains, which will likely increase the price of their products.

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An Introduction to Foreign Investment in Indonesia – New Issue of Indonesia Briefing Magazine

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indonesia-fdi-250x350The inaugural issue of Indonesia Briefing magazine, titled “An Introduction to Foreign Investment in Indonesia“, is out now and available to subscribers as a complimentary download in the Asia Briefing Publication Store.


  • Navigating Indonesia’s Foreign Investment Environment
  • Indonesia’s Updated Negative List: New Opportunities for Foreign Investment
  • Establishing a Representative Office in Indonesia
  • Understanding Tax Treatment of Representative Offices in Indonesia

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Indonesian Stimulus Gets Serious with Major Negative List Revisions

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By: Dezan Shira & Associates
Editor:  Cameron Turnbull

On February 17th, 2016, Indonesian president, Joko Widodo, announced plans to further liberalize his nation’s economic policy’s 10th economic stimulus package aimed at stimulating foreign direct investment.

Indonesia has long been on the radar of international investors as a rapidly developing region with serious potential. More stable and diversified than many believe, domestic consumption represents 56 percent of total GDP.  This is higher than fellow ASEAN member countries Malaysia (52.4 percent) and Thailand (52.2 percent). It also dwarfs the domestic consumption of Asian economic giant China, which comes in at just 36.5 percent.

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