'Undername import' is the Indonesian term for using another company's import license to clear goods. Here's what it means, the legal risks, and how a licensed IOR service is the formal alternative.
"Undername import" is a term you'll hear frequently when researching how to ship goods to Indonesia. It refers to the practice of clearing imports through someone else's API (Angka Pengenal Importir) import license — because the actual buyer doesn't have one.
The term itself has acquired a slightly shady reputation in Indonesia, often associated with informal arrangements that skirt regulatory boundaries. But the underlying need — letting foreign companies and individual importers ship to Indonesia without setting up their own entity — has a perfectly legal solution: licensed Importer of Record (IOR) services.
This guide explains the difference, the risks of informal undername arrangements, and how legitimate IOR services work.
Indonesia requires every commercial import to be cleared by a locally registered company holding a valid API import license. Setting one up requires:
For small importers, e-commerce sellers, or foreign companies testing the Indonesian market, all of this is overkill. The market response: a network of small companies offering "undername" — letting outsiders use their API for a fee. The formalized version of this concept is the licensed Importer of Record (IOR) service.
Both undername and IOR involve using a third party's API license to import. The difference is structure:
| Aspect | Informal Undername | Licensed IOR Service |
|---|---|---|
| Service contract | Often verbal or none | Formal written contract |
| Tax invoice | Frequently missing | Proper VAT-inclusive invoice |
| Payment trail | Cash, untraceable | Bank transfer, fully recorded |
| Cargo insurance | Usually none | Insurance + IOR liability |
| Compliance liability | Unclear | Clearly assigned to IOR |
| Tax credit | Cannot claim PPN | Can claim PPN as input tax |
| Customs audit risk | High | Low — properly documented |
Before considering an informal undername setup, understand what's at stake:
The PIB (customs declaration) lists the API holder as the importer. If something goes wrong — goods detained, fines imposed, cargo seized — you have no legal standing to claim the goods are yours.
Indonesia's customs (DJBC) and tax authority (DJP) cross-reference data. If you can't produce proper tax invoices for your import payments, you lose VAT input credit and face potential tax penalties.
API holders who lend their license without proper service contracts violate API terms. If detected, the API can be revoked — and any importer relying on it loses access immediately.
Articles 102-104 of Indonesia's Customs Law (UU Kepabeanan) define criminal penalties for misuse of customs documents, including misrepresentation of importer identity. Maximum: fines of 500% of import duty and imprisonment up to 10 years.
Without a formal contract, if the undername provider closes shop or has legal trouble before your goods arrive, your cargo is in legal limbo.
A licensed IOR provides the same outcome — legally importing without your own entity — through formal structures:
IOR fits these scenarios:
Red flags that suggest informal undername instead of legitimate IOR:
A real IOR will:
The formal version through licensed IOR services with written contracts and tax invoices is legal. Informal "API borrowing" arrangements without proper documentation violate API terms and carry criminal risk under customs law.
Conceptually similar — both involve using another company's API to import. The difference is IOR is the formal, contract-based service with full tax compliance, while informal undername is often undocumented.
No. The IOR is the legal importer on customs documents. You don't need any Indonesian licenses or entity.
Typically 2-8% of CIF value for the service fee, plus government duties pass-through. Varies by product complexity, required permits, and shipment volume.
A good IOR helps with permit acquisition or coordinates with regulatory consultants. Permit timelines: BPOM 6-12 months for new products, SNI 2-4 months, SDPPI 1-2 months.
Yes. Many clients move to formal IOR after a tax audit, compliance scare, or simply when they grow large enough that the risk isn't worth saving a few percentage points on fees.
Kickrate is a licensed Importer of Record (API-U) in Indonesia, operating since 2011 (originally part of Emerhub, spun off as Kickrate in 2019). We provide formal service contracts, proper tax invoices, full cargo insurance, and complete DJBC compliance.
Contact us for a free consultation, or search HS codes to see Indonesian duty rates and required permits for your specific product.
