Introduction
The food and beverage sector is considered one of the most resilient pockets of growth amidst the COVID-19 pandemic in Indonesia’s economy and therefore establishing a food business might be the right choice of business. However, before you can sell or distribute your products, you need to enrol yourself in the BPOM Indonesia food registration process to obtain a Distribution License. In this article, we will discuss some of the highlights of the food and beverage industry, as well as the food registration process in Indonesia.
Food and Beverages Industry Overview
From an investor’s perspective, Indonesia’s food and beverages industry has long been an appealing target. Over the last five years, the sector has recorded the largest investment realisation amongst secondary sectors, totalling some IDR 293 trillion – higher than other sectors such as base metals and pharmaceuticals.
Since the easing of large-scale social restrictions (Pembatasan Sosial Berskala Besar or PSBB) in mid-June 2020 which permitted consumers to dine in, restaurants in the Greater Jakarta Area saw their number of visits rise by 35% and 54% in July and August respectively. A similar trend can also be seen in other large cities throughout Indonesia, such as Makassar, Medan, Surabaya, and Denpasar.
Which Products Are Eligible to BPOM Indonesia Food Registration?
According to Indonesian law, “food” refers to anything obtained from natural sources such as agricultural commodities, plantations, forestry, fisheries, farms, marine or water environments, whether processed or unprocessed and used as food or drink for human consumption.
The following products do not require a BPOM product registration:
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Produced in a household industry
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Products with less than 7 days storage cycle
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Imported for research, testing, and/or personal consumption purpose
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Used as ingredients in finished goods
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Not sold directly to end customers
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Fast food
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Served and packed directly in front of customers as requested
For instance, pizza restaurants do not have to register imported paprika and tomato paste since those are the ingredients for making the pizza. As a result, If paprika and tomato paste were to be sold separately, they would have to register for the BPOM Distribution License.
Who Is Eligible for BPOM Indonesia Food Registration Process?
To register for the BPOM Distribution License, one has to establish a company under Indonesian Law and obtain the Import License first. If you do not have a company yet, you have three options available. Namely setting up a PT PMA, setting up / using a nominee for a PT PMDN, or appointing a local importer or distributor.
1. Establish a foreign-owned company
If the industry in which you want to invest in is open to foreign investment, the first option would be to establish a PT PMA or foreign-owned company. The percentage of foreign shares allowed depends on the business activity (KBLI); it varies from 49 to 100%. If the industry requires partial domestic ownership, then you need a local partner.
2. Establish a local or a nominee company
The second option for the food and beverage registration process in Indonesia is to establish a local or a nominee company (PT PMDN). Nominee companies do not need to obey the foreign ownership restrictions since their shares are obligated to a local nominee. If a local PT has even 0.1% of foreign shareholders, it will be a foreign company.
3. Appoint an importer/distributor
If you do not wish to set up a company in Indonesia, you can appoint a local distributor or an importer. It means that your company appoints another company to be the official distributor or importer of your products in Indonesia. You don’t even have to hold a legal presence in Indonesia.
The downside of this option is if there is a dispute between your company and your distributor that results in contract termination, the distributor is still legally able to sell and distribute your product in Indonesia until their license expires.
Closing Thoughts: BPOM Indonesia Food Registration
Despite the promising investment opportunity it offers, registering food and beverage products with BPOM or establishing a food business in Indonesia may be challenging. Reputable organizations can assist with company registration and BPOM food and beverage product registration to help you establish your company in Indonesia.
If you have any further questions regarding BPOM food registration or any other business licenses in Indonesia, reach out to the relevant regulatory bodies or consult with a professional service provider. Always ensure to verify any information and services provided to guarantee they meet all legal and regulatory requirements.
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