Shipping companies serve as companies which connect businesses all over the world, especially if the products involved are bulky. In Indonesia, water transport is the predominant means of transport because two-thirds of its territory is surrounded by water. The country serves as a transport hub for Southeast Asian countries and therefore receives large volumes of shipment on a daily basis.
The shipping industry in Indonesia is protected by a list of restrictions imposed by the Indonesian government. While these restrictions are intended to protect local businesses in the Indonesian maritime industry, they also provide opportunities for foreigners to enter the Indonesian shipping business.
Reasons to Start a Shipping Company in Indonesia
According to the latest statistics, the shipping companies of Indonesia contributed approximately 12% of the country’s GDP, a figure which is generally increasing. This rate of growth presents prospective business owners with an opportunity to undertake business activities in the shipping industry in the anticipation that the market conditions will improve. In its attempts to facilitate the growth of the industry, the Indonesian government has initiated many port development activities in its major ports in order to improve freight handling as well as the time taken to clear out goods from ports.
Indonesia is set to become an important country in the world’s maritime industry. This fact is evidenced by the heavy investment which has been given to the shipping industry. This capacity for economic growth has done much to facilitate the transport of goods across ports as well as all ship-building activities which take place in Indonesia.
Key Notes About Starting a Shipping Company in Indonesia
Requirement of a local shareholder
Indonesia’s shipping laws allow for complete local ownership of shipping companies. However, any foreigner who is interested in starting a shipping company is only allowed to own up to 49% of the shares of the company. The reason for this is to retain as much local control over shipping companies as possible in order to secure local investments.
Partnership with a local firm
Before any foreigner may start a shipping company in Indonesia, the government requires a foreigner to partner with a local firm when seeking opportunities in the shipping industry. Foreign vessels are banned from participating in local transportation of both goods and people. However, in high-value industries like oil and gas, the Indonesian government allows an increased degree of foreign participation.
Starting a shipping company in Indonesia as a foreigner requires the foreigner to register and incorporate a company by following the regulations stipulated by Indonesia’s company laws.
Share ownership in public limited liability shipping companies
Investors from other Southeast Asian countries, however, are allowed to actively participate in shipping ventures by owning not more than 70% of the shares in public limited liability shipping companies.
Licenses Required to Start a Shipping Companies in Indonesia
To fully commence operations after register a shipping company in Indonesia, businesses need to apply for business licenses.
Here are some of the licenses that are needed:
Sea Transportation Business License (SIUPAL)
This license is electronically generated after the issuance of a temporary business license upon the registration of a shipping company.
General Vessel Certification
Although it is not a license, the general vessel certification for each shipping vessel owned by a shipping company is also required. This certification is issued following the adherence of the vessel to safety, tonnage, and load line rules stipulated by the Indonesian authorities.
Pollution Prevention Certificate
The shipping company must also obtain a pollution prevention certificate which confirms the company’s willingness to adhere to pollution standards.
Radio Station Certificate
For every shipping vessel owned by the company, there should also be a ship radio station certificate which states the communication channels to be used by the vessel during the vessel’s operation.
Import & Export Licenses
Should any shipping company based in Indonesia intend to export or import any products, it must obtain an export and import business license. Export and import business licenses which are owned by shipping companies based in Indonesia may be renewed at any time through the proper legal means.