Export Basic Procedure From Indonesia

Export is an activity of shipping goods from the Indonesian custom area to the custom area of other countries.  Usually, export process starts from an offer of a party followed by the agreement from another party in a sales contract process, which in this case, are the Exporter and Importer. Payment process for the shipping uses letter of Credit (L/C) or non L/C; each method has its risk and advantage

Why Doing Export

Factors that drive manufacturer or business to export are, among others:

1. Traditional Commodity

Usually, a company produces a commodity as a continuation or economic remnants of colonial ages such as rubber, coffee, tea, pepper, tengkawang, tin, copper, and other mining products. This probably continues as nowadays export activities.

2. Profit Optimization

Besides selling a product domestically, by using export, a company could expand their sales reach up to foreign countries, and the types of good are eventually not limited for domestic consumers only.

3. Market Search

For a company with strong domestic market, export is an opportunity for market diversification which eventually strengthens the position of traded commodities.

4. Utilization of Excess Capacity

If the production capacity of an industry has not exceeded the machine capacity, then the idle capacity could be allocated for export market.

5. Export Oriented Products

There are some labor-intensive industries which deliberately moved from Industrial Countries such as Japan, Korea, Taiwan or Singapore to Indonesia with the purpose of relocating shoes industry, garment and so forth.

6. Trading House

The government is currently developing trading house concept, such as those in Japan, to facilitate exporters in penetrating international markets. Trading House will facilitate exporters in analyzing the market or identifying Buyer and providing other necessary information related to the market condition in the country where the Trading house is located.

7. Highly Competitive Commodity

Products with original materials from Indonesia and having absolute advantage or other products with comparative advantage have great opportunity for export market. For example, materials such as natural rubber, tropical wood, agribusiness, handicraft and others, all have relatively high competitiveness in export market.

Steps by Steps

Steps of how to start export in Indonesia, including flowchart of the export activities, starting from the licensing, order entry, shipping,payment, until the aftersales

Four Primary Stages in The Export Process (Using L/C)

Four Main Stages in the Process of Export (using L/C)

• Sales Contract Process
• L/C Opening Process
• Cargo Shipment Process
• Shipping Document Negotiation Process

Requirements for Exporters

To become an export firm must meet the following provisions:

• Incorporated
• Having NPWP (Taxpayer Number)
• Having permits issued by the Government

Grand Flowchart of Export Activity

To further studying export procedures, we provide document containing an export flowchart

Payment Method

Method of payment in the export process can be done in several ways. Each way has its advantages and disadvantages. Here we describe the ways of payment inexport activities

Incoterms

Incoterms or International Commercial Terms is the terms (a set of three letters code) which are used in International Trading to regulate, so that there is no misinterpretation in making contract. Incoterms regulates the requirements to be fulfilled in shipping or delivery of goods

Intellectual Property Rights

In Indonesia, appreciation towards intellectual property rights is still modest; therefore sometimes some people consider Intellectual Property Rights are not necessary. However, the Intellectual Property Rights are in fact useful to protect the businessmen from the possibility of unauthorized use of the rights. Therefore, it is important for the Exporter to prepare the products in relation to the IPR before conducting Export activities so that the products receive legal protection