Indonesia Medical Device Subsidiaries
Indonesia Removes 49 percent Foreign Equity Cap on Medical Device Importers.
Presidential Regulation No. 10 of 2021 on “Investment Business Fields” issued in February 2021 allows 100 percent foreign ownership in companies that import and obtain regulatory approval for medical devices. Previously, the 2016 Negative Investment List limited foreign ownership of companies that import and obtain regulatory approval of medical devices to a maximum of 49 percent.
This regulatory change is likely to result in more foreign investment in Indonesia because it provides foreign companies full legal control over the subsidiaries in Indonesia that obtain and control marketing authorization of their imported medical devices. It is also still possible for majority Indonesian-owned companies with regulatory expertise to obtain and hold the marketing authorization as the local representative of a foreign medical device manufacturer.
Obtaining a Medical Device Distribution Certificate (Sertifikat Distribusi Alat Kesehatan or SDAK) from the Ministry of Health is a basic requirement for companies to request marketing authorization and import their medical devices and diagnostic equipment into Indonesia. Ministry of Health Regulation No. 14 of 2021 on “Standards of Business Activities and Products on the Implementation of Business License Based on Health Risk” further stipulates that companies that apply to be a wholesaler of laboratory equipment and/or medical equipment for human use under Code 46691 of the Indonesia Standard Industrial Classification (Klasifikasi Baku Lapangan Usaha Indonesia or KBLI) are required to have a warehouse and to submit certification of Good Distribution Practices.
Based on Ministry of Trade regulations, companies in Indonesia are expected to engage one or more local distributors to distribute their medical device products to hospitals and clinics. To avoid duplication of efforts, some medical device importers outsource part or all of their warehousing functions to these local distributors, including quality control, packaging and labelling.
Presidential Regulation 10/2021 (Peraturan Presiden 10/2021 Tentang Bidang Usaha Penanaman Modal) can be accessed via these government of Indonesia websites:
The Audit Board of the Republic of Indonesia
Cabinet Secretariat of the Republic of Indonesia
For more information contact Office.Jakarta@trade.gov.