Set Up a Business for Sale of Motor Vehicles in Indonesia

Updated on Tuesday 05th March 2019

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Starting a business in Indonesia is not complicated for foreign investors. Once they have chosen the industry they want to operate in and have drafted the investment plan, the company registration procedure becomes quite simple.

Among the industries suitable for opening companies in are the automotive and tourism sectors. For example,‚Äč starting a business for the sale of motor vehicles in Indonesia can be quite profitable considering the country does not rely on a motor vehicle producing industry. This means that foreign investors can act as importer and distributors of various types of motor vehicles dealerships in Indonesia.

The company registration procedure of a business for the sale of motor vehicles in Indonesia must be completed the same way as for any other type of company and our local specialists can help foreign entrepreneurs interested in operating here.
 

Registering an Indonesian business for the sale of motor vehicles


The Indonesia company incorporation procedure of business for the sale of motor vehicles must be completed in accordance with the provisions of the Company Law and the Investment Coordinating Board in Indonesia.

This implies choosing a suitable business form – the limited liability company and the foreign-owned limited liability company are the two suitable business forms for a medium-sized company such as a car dealership in Indonesia.

Our company formation agents in Indonesia can help with the registration of any business form on behalf of foreign investors looking to establish companies for the sale of motor vehicles.
 

The sale of motor vehicles in Indonesia


There are several types of motor vehicles which can be sold in Indonesia, and those who open car dealerships here will have many business opportunities. The automotive industry in Indonesia relies on the export of spare parts, however, there are also various large producers with plants and assembly lines in Indonesia.

Among the types of motor vehicles which can be successfully sold in Indonesia are:
 
  •           cars to be used for personal use, thanks to Indonesia’s large number of inhabitants;
  •           premium cars can also have a good reach to clients looking to purchase automobiles from renowned producers;
  •           passenger cars and motor vehicles used for the transport of tourists are also sought in Indonesia;
  •           other types of motor vehicles, such as motorcycles can also be successfully sold here.

Indonesian car dealerships can also be divided into companies which sell new cars and those which sell used cars.

Foreign investors who want to open businesses for the sale of motor vehicles can rely on our company registration advisors for guidance on the requirements which need to be respected with respect to the import and export of such goods.
 

Special regulations for automotive dealerships in Indonesia


Those who want to open companies for the sale of motor vehicles, new or used, must comply with certain regulations. Among these, one of the most important is Regulation No. 22 on General Provisions on the Distribution of Goods which was last amended in 2016.

Under this law, motor vehicles companies can be categorized in:
 
  •           distributors;
  •           sub-distributors;
  •           agents;
  •           sub-agents.

Foreign-owned companies must appoint a local agent to sell the vehicles or can become direct distributors if they register the companies in partnership with a local business. Following that, the company will sell the automobiles based on distribution agreements.

Considering most Indonesian companies import the vehicles they sell, there are also a few import regulations which need to be respected. The license which needs to be obtained for the import of motor vehicles is the general import license or API – U. The motor vehicles must be accompanied by specific paperwork which indicates that the auto vehicles comply with the local emissions regulations.

Also, the company selling motor vehicles is required to draft sale-purchase agreements which will be signed by the seller and buyer. The price of the vehicle must be comprised of the retailer’s price and the GST.

Opening a business for the sale of motor vehicles in Indonesia can be a very good business opportunity considering the number of cars imported into the country for sale has increased in the last 5 years. The same ascendant trend has also been registered in the import of cars for re-export to neighboring countries. Indonesia’s car producing capacity has also grown by 70% in the last few years.

If you want to set up a business for the sale of motor vehicles in Indonesia and need guidance, do not hesitate to contact our local consultants. We can help you open any type of company in Indonesia.