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Indonesia: Foreign-flagged cruises and yachts to sail in Indonesian waters

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In brief

Minister of Transportation Regulation No. 14 of 2023 on Amendment to Minister of Transportation Regulation No. 4 of 2022 on Services for Foreign-flagged Yachts and Cruise Ships (MOT 14/2023), which came into effect on 23 May this year, expands the ports that are available for foreign-flagged cruise ships and yachts to enter and exit Indonesian waters. Foreign-flagged cruise ships and yachts are allowed to sail in Indonesian waters if they have obtained the following:  

  1. A sailing license issued by the harbormaster
  2. A vessel declaration issued by the Head of Customs Office or the appointed customs and excise official at the entry point 

Specifically for cruises, a clearance approval for Indonesian territory from the Ministry of Foreign Affairs via an electronic portal (https://e-cait.kemlu.go.id/#) is also required.

Within Indonesian waters for foreign-flagged cruises and yachts

Although Indonesia applies the cabotage principle, i.e., all vessels operating in Indonesian waters have to fly the Indonesian flag and be manned by Indonesian crew, foreign cruise ships and/or yachts used for tourism purposes may be exempted, on the condition that they will not be sold and/or be leased to other parties when sailing in Indonesian waters, and/or they will not transfer passengers – for yachts sailing in Indonesia, except in an emergency.

MOT 14/2023 has increased the entry and exit points for foreign-flagged yachts in Indonesia to 29, and increased the points for embarkation and/or disembarkation for foreign-flagged cruise ships in Indonesia to 12. Through these additions, the Government of Indonesia aspires to create a better and more seamless travel experience for visitors travelling on foreign-flagged cruise ships and yachts and boost further investment and economic opportunities.

Up to three years of customs facilities

Vessel declaration is a relatively simple customs declaration applicable exclusively for foreign-flagged cruise ships and yachts that functions as a temporary import customs declaration, a guarantee letter, and an export customs declaration. Through vessel declarations, the government provides an exemption from import duties for foreign-flagged cruise ships and yachts along with their spare parts, a facility for easier import and export customs declaration, an exemption from fulfilling border and post-border import licensing, and an exemption from the obligation to declare transportation customs (pemberitahuan pabean pengangkutan). Once issued, the vessel declaration will be valid for up to three years.

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Mita Djajadiredja is a senior partner in the Mergers & Acquisitions Practice Group and the key contact for Technology, Media & Telecommunications in Indonesia. She has more than 20 years of experience in M&A and private equity, as well as corporate alliances, including joint ventures, shareholder agreements and strategic business alliances. Mita advises a wide range of domestic and international clients across various industry sectors, including real estate, insurance, finance, manufacturing and trading.

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Ponti Partogi is head of the Tax and Trade Practice Group at Hadiputranto, Hadinoto & Partners (HHP Law Firm), a member of Baker & McKenzie International. He has been practicing for more than 20 years, focusing on domestic and international tax and trade issues relating to inbound and outbound investment and cross-border corporate exercises including JVs, M&As, divestitures, spin-offs and takeovers. His combined legal and accounting background allows him to provide comprehensive tax advice on various transactions both from the legal and the accounting perspective.

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Dyah Ayu Paramita is an Associate Partner at Hadiputranto, Hadinoto & Partners (HHP Law Firm), a member of Baker & McKenzie International, Jakarta office.

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Irvan is an Associate Partner in the Tax & Customs Practice Group at HHP Law Firm, a member firm of Baker & McKenzie International. He is a customs specialist. Before he joined HHP, he worked in the Directorate General of Customs and Excise ("Customs") as a Customs Auditor for 12 years, and he worked for the tax division of a big four public accounting firm for 11 years. He is adept in providing various types of customs advice, customs audit assistance, and customs dispute assistance in various industries, including in areas such as information and communication technology, electronics and mobile phones, energy & mining, automotive, plantation (palm and its derivatives, cocoa) and other consumer products.

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