In recent years, Indonesia's cosmetics industry has developed rapidly. There are more than 33,000 products registered with the Indonesian Food and Drug Administration (BPOM), and this number is still increasing.
Although Indonesia's cosmetics industry is very promising, many foreign-funded companies are unable to enter the Indonesian market due to various problems.
Today we will take a look at 4 common mistakes that foreign investors often make when registering cosmetics in Indonesia.
Failure to meet independent dealer requirements
Manufacturers setting up companies in Indonesia can become direct distributors of their products, which is an important condition. But setting up a company in Indonesia is not easy, which is why so many domestic manufacturers fail to independently distribute their products and instead look for local distributors or agents.
Generally speaking, foreigners can establish local companies or foreign-owned companies. Foreign-owned companies (PT PMA) are a safe bet.
However, the PT PMA has many restrictions, such as a negative investment list, so registration is not only tiring but also costly.
Lose control over product
If you don’t want to set up your own company in Indonesia, you can register the product under a local distributor or agency.
But according to Indonesian regulations, you can only register your product with one company. This means that the company will have independent distribution rights, even though you did not sign an exclusivity agreement.
Working with unreliable partners
Choosing the right business partner is key in breaking into the Indonesian cosmetics industry.
According to what was said before, the distribution agreement is valid for 3 years. If you are unlucky and sign a contract with an uncreditable partner, you will not be able to terminate the cooperation before expiration.
Underestimating the business process in Indonesia
Once your company is registered with BPOM, you can start the product registration process by following these steps:
Document preparation. You need to prepare some documents related to each product.
Product Delivery. You need to submit documents to BPOM for each product you register, and BPOM charges a fee for each product submitted for registration.
BPOM notification (circulation permission). BPOM usually publishes results within two weeks of receipt of payment. However, the process may take longer depending on the formula and complexity of your product claims. Therefore, you can start processing the circular and import the products to Indonesia. This notice is valid for 3 years and can be extended.
Often, this process will take longer than expected. To avoid this, you must prepare complete and accurate documentation as required.
