In this article we review how boat owners or business owners can take opportunities to set up a company in diving, water tourism and operate a boat in Indonesia. We also cover the boat registration in Indonesia. The country is the biggest archipelago in the world with 14 000 islands and a lot of tourism opportunities and sea ressources.
Boat ownership in Indonesia
The Indonesian government authorises crew members and boat owners to sail the Indonesian ocean. While boat owners can sail and transit in Indonesia and get a 3 years authorization with a simple vessel declaration (VD) under a foreign flag.
However the process becomes slightly more complicated if a foreigner wishes to register the boat under the Indonesian flag. Indonesia is restricting the ownership of a vessel under an Indonesian name or under an Indonesian entity.
Boat registration in Indonesia under 7GT
Indonesia makes the registration procedure based on the gross tonnage of the vessel. If the gross tonnage of the boat is under 7GT, the boat has to be registered at the local harbour (PasKecil) and registered in the central base of the government https://paskecil-ditkapel.dephub.go.id/
This type of vessel used for daily scuba diving trips, fishing or other daily activities do not need to get an Indonesian flag to travel overseas and are limited to a few miles from the coast.
Boat registration in Indonesia above 7GT
Boat ownership is limited in Indonesia to Indonesian national or Indonesian entities with a majority of Indonesian shareholders. Foreigners can register or import a boat under a company called PT PMA and register the vessel under the company. The purchase and boat documents have to be proceeded under the company.
The boat documentation is dependent on the gross tonnage of the boat. Each vessel has in common a document called Gross Akta. This document is the ownership of the boat. Vessels above 500GT and 1000 GT require several additional documents or a certification from the BKI (the Indonesian office of classification).
To register the vessel with the ministry of transportation, the boat owner has to provide the following documents
- Gross Akta
- Proof of Identity of the vessel owner;
- Taxpayer identification number – NPWP
- Surat Ukur (tonnage certificate)
Get professional legal advice for Indonesia
Indonesia’s legal system is complicated, with its many regulations, licences, and special rules for foreigners. Don’t make the mistake of trying to navigate it alone, and get the help of experienced consultants instead.
At ILA, we can help you with intellectual property, corporate law, drafting, reviewing and managing legal documents, navigating commercial transactions and much more.
You’re not alone. Reach out today to schedule a free consultation or read more about our legal service.
Boat operation in Indonesia
While authorises only entities with an Indonesian as shareholder to own a boat, it is possible for a PT PMA with 100% foreign shareholding to operate a boat in Indonesia. Foreigners willing to operate activities such as Jetski, diving or fishing charters can legally operate a vessel.
Companies willing to have offshore operations can partner with Indonesian companies to operate on their own operations.
The process requires a K3L and environmental licence. We advise you to contact us to identify which additional licence you might need as the regulation can change based on which area you wish to operate or register your company in Indonesia.
For people willing to visit in Indonesia, the vessel declaration system is sufficient. However if you wish to operate a boat from another country in Indonesia, you will need to proceed with an import declaration involving the custom.
Importing a boat in Indonesia
Indonesia authorises only vessels under Indonesian flag to commercially operate in Indonesia and with an Indonesian captain. The first step before making a registration is to import the boat.
The luxury tax on vessels has been waived in 2021. It is now possible to waive the luxury tax of 75% on boats and vessels. However we recommend being careful during the process and consult us to identify the steps for the importation. We first recommend bringing the boat under a foreign flag with a vessel declaration to avoid complications. This is to ease the inspection process during the import and the registration process.
Working on a boat as foreigners in Indonesia
Foreigners can work as crew members under certain conditions. As described above, only Indonesian nationals can be the registered captain on a vessel. Foreigners can apply for a working permit (IMTA). They have to clearly identify the location where the boat will operate to add the different location.
The company needs to define which location the boat operates and provide supporting documents (contracts, boat itinerary etc).
Contact us if you are a foreigner willing to import a boat or register a boat. Our team will assist you for your offshore activities or opening a business related to water tourism activity. A boat can be registered in Indonesia under a PT PMA while a foreigners can operate activities in Indonesia and control their business at 100%
