Ever wondered how Southeast Asia’s hot markets can boost your business or investment portfolio? Compared to other countries in the region, Vietnam’s property ownership laws and investment regulations offer unique advantages and challenges for foreign investors. As a strategic consultant with over 20 years of experience in FDI and manufacturing across dynamic markets like Vietnam, […]
Food and Beverage industry has been growing recently, and many entrepreneurs are attracted to have such businesses, especially in Indonesia. This is followed by the fact that there is an increase in spending on food and drink of the growing middle class. It has been the main contributor to its development and it needs to be regulated with BPOM.
There is a fact that Indonesians are willing to stand in line to buy food and drinks, especially if the food or drink is in the hype. For example, when the bubble tea hype happened last year, people were on the line for hours only to get their popular drinks. It proves the consumption of the people in Indonesia seems cool and calm amid the current economic slowdown.
Along with the situation, the government expects more companies will enter the food and beverage market in Indonesia. However, it might be a tricky game as you would need to register your food products and get a BPOM certificate before selling out to the market.
In this article, we will give you an overview to get a BPOM certificate in Indonesia!
What Food Products Must Be Registered in Indonesia?
Badan Pengawas Obat dan Makanan (BPOM) or in English we say The National Agency for Food and Drug Control (FDA), is the one who regulates all the food products in Indonesia.
The term “food” as anything that comes from biological sources of agricultural products, plantations, forestry, fisheries, farms, marine or water environments, whether it is processed or unprocessed, but all those are used as food or drink for human consumption. Therefore, they have to be registered to BPOM in Indonesia. Even though BPOM also supervises the medicines and therapeutic goods and food products, both have different regulations.
However, some food products are exempt from BPOM registration. This exemption includes products which are,
- Imported for research, test, and/or own consumption purpose.
- Used as ingredients for end products.
- Not sold to end customers.
- With a life cycle of less than 7 days.
For example, if a pizza restaurant wants to import olives and tomato paste for their pizzas. They don’t need to register those products since those ingredients are for making the final product, a pizza. But, if both olives and tomato paste were sold separately, they would need to register the products.
Who Can Register The Products?
In this country, there are only limited liability companies that are established under Indonesian Law and have an import license that can register products to BPOM. If you don’t have a company or haven’t appointed any importer yet, well you have 3 options to choose.
- Setting up a foreign-owned company
Your first option would be, to set up a foreign-owned company, a PT PMA. The minimum investment plan for setting up is 10 billion IDR (around 760.000 USD), and 2.5 billion IDR must be paid up capital
The maximum allowed foreign ownership can be:
- 100% for import and export companies.
- 67% for distribution companies.
Import - export companies cannot distribute products. Therefore, they need to assign one. Limited foreign ownership for distribution companies that means, you must have a local partner entrepreneur.
- Setting up a local or a nominee company
The second option for F&B registration in Indonesia is, to set up a local or a nominee company (PT). A PT can be established with a capital of 51 million IDR (around 3.800 USD).
However, if you plan to hire foreign employees, you should state at least 1 billion IDR (around 75.000 USD) as paid-up capital through a capital statement letter. The nominee companies do not need to comply with foreign ownership restrictions, since its shares are pledged to a local nominee.
- Appointed importer or distributor
The third option is, to look for an appointed importer or a distributor. It means another company in Indonesia is assigned by you to be the importer or distributor of your products.
You don’t even have to hold a legal presence in Indonesia. However, signing an exclusive distributor agreement would mean that your appointed distributor will hold your products for 5 years.
BPOM Food Products Registration Process in Indonesia
You can proceed to product registration, after you have decided on the above. The type of products are based on beverage and processed food registration. If the products have a difference in packaging, composition, manufacturer, importer or distributor name, or labeling design, they are still considered as one registration.
Moreover, the process of food products registration is done in three stages.
Stage 1: Audit
The first stage of product registration is an audit on a distribution facility. Before starting with the registration, you must have an appropriate place for storing your products.
The audit will be conducted by the local BPOM of where your facility is located. The audit result applies to every food product that is to be registered.
Stage 2: Assessment
The second stage is the assessment of the products. They are divided into 4 categories depending on the type of risk: with a high, medium, low, or very low risk factor.
Based on the results, BPOM will issue an official invoice for the company to proceed to the next stage.
Stage 3: Evaluation
Finally, the last stage is the evaluation. It can have 3 possible results:
- Approval of your product registration application. BPOM will issue ML codes for your products.
- Rejection of products registration application. Due to rejection, you must start from the assessment stage.
- Additional data is required. In this case, you will be given 50 days to submit the requested data. If you fail to provide data in time, the registration process will be canceled automatically.
The expected total time of the registration process is from 6 months to 1 year.
BPOM issues ML codes for 5 years after the approval. The extension of the ML codes is possible 6 months before the expiration date.
The Requirements for Food Products BPOM Registration
Administrative requirements for BPOM
- Registration form
- Legal documents of the importer
- Audit results on storage facilities
- GMP/ HACCP/ ISO 22000 certificate of the manufacturer
- Letter of appointment. It must clearly state that your appointed importer or distributor will proceed on the product registration.
- Certificate of Free Sales
- Health Certificate
Technical Requirements for BPOM
- Composition information on ingredients
- Manufacturing process
- Storage information
- Production code information
- Labeling design
- Certificate of Analysis of the finished product
It is so important to plan food products registration if you want to sell your products all over in Indonesia. What you need to do is prepare all the things that are mentioned above, then achieve a successful BPOM registration.
If you are unsure about your food products comply with Indonesia regulations, or you have tons of questions regarding the registration, you can contact us. Viettonkin will always be ready to assist you!
