Set Up a Business for Selling Textiles in Indonesia

Updated on Wednesday 07th August 2019

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Indonesia is one of the most appealing countries for starting a business in Southeast Asia because of its numerous population and cheap workforce. These are two of the most important reasons why foreign companies set up branches and subsidiaries in Indonesia instead of choosing other countries in the region.

One of the most lucrative business ideas in Indonesia is setting up a company in the textiles industry, especially when it comes to selling textiles products. Because many of the fabrics are manufactured here, the production cost of textiles is also cheaper compared to European countries, for example.

If you want to open a company for selling textiles in Indonesia, our company formation agents in Indonesia can help you register it.
 

Registering a company in the textiles sector in Indonesia


Both local and foreign investors can open companies for selling textiles in Indonesia, the only difference being the legal form which can be used for carrying out their activities. The limited liability company remains a preferred business form for local and overseas investors, as foreigners can use the PT-PMA (limited liability company with full foreign ownership) to set up a textiles business.

Foreign companies can easily set up branch offices in Indonesia and sell their products here.

Our Indonesia company incorporation agents can help foreign investors register any type of company here.
 

Regulations to be respected when selling textiles in Indonesia


There are no specific laws which refer to the creation of companies selling textiles in Indonesia, however, businesses here must comply with the standards and regulations imposed by industry authorities, such as the Indonesian Association of Synthetic Fiber Producers  (APSYFI) and the Ministry of Industry and Trade, as well as those of the Customs Authorities which have put in place specific regulations when importing and exporting textiles and fabrics into/out of the country.

The following types of textile products can be sold in Indonesia:
 
  1. textiles made of natural fibers, such as cotton, wool, flax, hemp or other materials;
  2. textiles made of artificial fibers from yarns or threads, nylon and other synthetic materials;
  3. textiles produced through weaving, knitting, felting, braiding, knotting or crocheting;
  4. fabrics destined for the production of clothes can also be sold in Indonesia;
  5. other materials used for the manufacturing of various textile products can be sold in Indonesian shops.

When referring to selling textiles in a shop in Indonesia, these can be sold in traditional stores or online shops. It is important to know that for selling goods online in Indonesia, one is required to register a domain name.

Our company registration specialists in Indonesia can help you set up both traditional and online shops for selling textiles.
 

Licenses for selling textiles in Indonesia


The opening of a company for selling textiles in Indonesia is not subject to strict licensing criteria; however, these companies are required to obtain import permits when selling imported products. Also known as a limited import license, the permit which can be used for bringing textiles into Indonesia can be used for the sale of those specific items.

The following documents must accompany the textiles products imported into Indonesia:
 
  • the commercial invoice;
  • the bill of landing or AWB (depending on the transportation means);
  • the customs import clearance;
  • the insurance certificate;
  • the import permit;
  • the packaging list.

It is important to note that certain prohibitions can be imposed when importing certain fabrics or products made of certain materials.

Our local consultants can assist with information about obtaining various permits and licenses for your business in Indonesia.
 

The textiles industry in Indonesia


In June 2019, the government issued Regulation No. 45/2019 which provides for tax deductions of up to 300% for companies investing in research and development which applies to a large number of textiles companies in Indonesia. This way, the government aims at supporting not only the textiles sector but also the manufacturing industry which plays a major role in the country’s economy.

According to the government:
 
  • between 2007 and 2018, the import of textiles in Indonesia increased by 12.3%;
  • between 2016 and 2018, the export of textiles from Indonesia rose by 6% on an annual basis;
  • investment in the textiles sector also increased by 68% in 2018, out of which 61.4% were domestic investments;
  • employment in the textiles and garments industry also rose by 0.13% in 2018 compared to the previous year.

If you are interested in setting up a business for selling textiles in Indonesia, please contact our local agents.