Indonesia
Shipowner Eligibility
Vessels must be owned by Indonesian citizens or Indonesian statutory bodies.
About the Flag
Located in Southeast Asia, Indonesia is an archipelago between the Indian Ocean and the Pacific Ocean. Bahasa Indonesia, a modified form of Malay, is the official language but English, Dutch and local dialects are widely spoken. The legal system is based on Roman-Dutch law substantially modified by indigenous concepts and by a criminal procedures code.
The Chief of State and Head of Government is the President, and there is a unicameral House of Representatives. Jakarta is the capital. Indonesia is a member of the UN, ASEAN, and the IMO.
The economy is mixed with some socialist institutions and central planning but with emphasis on deregulation and private enterprise. The Law on Government decentralization is now gradually being implemented. Chief exports are manufactured goods and fuels to Japan and the United States. The currency is the Indonesian Rupiah.
The Shipping Law No. 21 of 1992 dated September 17, 1992 covers the maritime matters in Indonesia. This Shipping Act is further implemented by a number of government regulations which specifically regulate certain fields in maritime law, as follows:
• Government Regulation No. 69/2001 replacing Government Regulation No. 70/1996, concerning Harbors;
• Government Regulation No. 1/1998 concerning Investigation of Ship Accidents which gave birth to the existence of the Maritime Investigation Court;
• Government Regulation No. 82/1992 concerning Transportation in Waters (“GR 82/1999”);
• Government Regulation No. 7/2000 concerning Seafarers Affairs;
• Government Regulation No.81/2000 concerning Navigation;
• Government Regulation No. 82/2000 concerning Water Transportation; and
• Government Regulation No. 51/2002 concerning Vessels (“GR 51/2002”).
In addition, Indonesia has ratified the International Convention on Maritime Liens and Mortgage 1993 (“Convention”) based on the Presidential Regulation No. 44 of 2005.
According to Article 19 of GR 51/2002 and its elucidation, the vessel registration shall cover the registration of
• right of ownership;
• hypothec encumbrance; and
• any other in rem rights over the vessels, such as: bareboat charter and leasing.
The vessel registration shall be recorded in the Indonesian vessel list consisting of
• Daily Registry;
• Master Registry; and
• Central Registry.
The Daily Registry and Master Registry shall be conducted and maintained in every place of vessels registration, while the Central Registry shall be centrally conducted and maintained in the place determined by the Minister of Communications. In this regards, the Minister of Communications has issued a Decree No. KM 14 of 1996 dated March 29, 1996 as amended by Decree No. KM 1 of 2002 dated January 14, 2002 (the “KM/1996”) concerning Simplification of Procedures of Vessels Procurement and Registration which intends to simplify the vessel registration requirements and procedures
Company Formation
Under Indonesian Law, there are several types of companies that may be established, namely: (a) the partnership (Firma), and (b) the limited liability partnership (Commanditaire Vennotschap or CV); and (d) the limited liability company (Perseroan Terbatas or PT). According to the Minister of Communications Decree No. KM 33 of 2001 concerning Sea Transportation Business ("KM 33/2001"), the sea transportation business can be conducted by sea transportation company which is an Indonesian legal entity in the form of limited liability company ("Company").
The Company Law No. 1 of 1995 ("Company Law") regulates the formation of a Company. The establishment of a Company under the Company Law requires a notarial deed of establishment, which includes the Articles of Association and needs to be signed by at least 2 (two) persons (founders), which can be either private person(s) or other company. After its establishment, a Company shall at all times have at least 2 (two) shareholders. If sole ownership occurs and persists for more than 6 months, then the sole owner becomes personally liable for the obligations of the company. The deed of establishment further must be approved by the Ministry of Law and Human Rights Affairs ("MOJ"). Only upon MOJ Approval does the company become a legal entity. After MOJ Approval, the Company shall register the deed of establishment with the Company Register kept by the regional office of the Department of Trade in the jurisdiction in which the company is domiciled and within 30 days of the registration, announce the company in the State Gazette of the Republic of Indonesia.
Under the Company Law, a Company must have a board of directors consisting of one or more directors to run the company and a board of commissioners consisting of one or more commissioners to supervise the board of directors. The Company Law set the minimum authorized capital of a Company in the amount of Rp. 20,000,000. Other regulations however may determine different minimum capital for certain specific business activities. In the framework of foreign investment (Penanaman Modal Asing or PMA), based on the 2002 Technical Guidelines for Investment and KM 33/2001, the business of overseas sea transportation (i.e.: sea transportation activities from the Indonesian harbors to foreign harbors and from foreign harbors to Indonesian harbors which is carried out by sea transportation company) may be conducted in a joint venture company established by and between foreign sea transportation companies or foreign legal entity or foreign citizen with national sea transportation company or Indonesian legal entity or Indonesian citizen under the condition that (i) the foreign shareholding of the joint venture company shall not exceed the maximum of 95% and (ii) the joint venture company is obliged to own at least 1 (one) sea-worth Indonesian-flag
Taxation
According to the Minister of Finance Decree No. 416/KMK.04/1996 concerning Special Calculation Method for the Net Income of Domestic Shipping Companies Taxpayer, the income tax on the income deriving from the transportation of passengers and/or cargo of Domestic Shipping Companies as taxpayers shall be 1.2% of the gross turnover and final in nature. The gross turnover means all compensations or the value of compensations in the form of money or the value of money received or earned by the Domestic Shipping Companies as taxpayers from the transportation of passengers and/or cargo from one harbor to another harbors in Indonesia and/or from an Indonesian harbor to an overseas harbor and/or the other way around.
Indonesia has entered into double taxation agreement with the following countries: Australia, Austria, Belgium, Bulgaria, Brunei Darussalam, Canada, China, Czech Republic, Denmark, Egypt, Finland, France, Germany, Hungary, India, Italy, Japan, Jordan, Kuwait, Luxembourg, Malaysia, Mexico, Mongolia, the Netherlands, New Zealand, Norway, Pakistan, Philippines, Poland, Romania, Russia, Saudi Arabia, Seychelles, Singapore, Slovakia, South Africa, South Korea, Spain, Sri Lanka, Sudan, Suriname, Sweden, Switzerland, Syria, Taiwan, Thailand, Tunisia, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Venezuela, and Vietnam.
Registration and Documentation
KM 14/1996 provides that a vessel can only be registered in Indonesia if such vessel has a minimum gross tonnage of 20 M3 or GT 7 and is owned by Indonesian citizen or Indonesian legal entity.
Application for vessel registration can be filed at the head office of the Directorate General of Sea Communications or to the Harbormaster at the following ports:
Ambon
Donggala
Makassar
Samarinda
Bagan Siapi-api
Dili
Manado
Sampit
Balikpapan
Dumai
Manokwari
Sibolga
Banjarmasin
Gorontalo
Maumere
Sorong
Batam
Jambi
Meneng
Tanjung Emas
Belawan
Jayapura
Merauke
Tanjung Perak
Bengkulu
Kendari
Palembnag
Tanjung Pinang
Benoa
Kupang
Panjang
Teluk Bayur
Bitung
Lembar
Pekanbaru
Ternate
Cilacap
Lhokseumawe
Pontianak
Tual
Cirebon
Luwuk
Sabang
Tanjung Priok.
Registration through Indonesian Consulates is not allowed.
Documents required for vessel registration are:
• Evidence of ownership (deeds of transactions, grants, inheritance, court decisions or other proofs which can function as such)
• Identities of owners
• Certificates of measurements
• Evidence of settlement of vessel name-transfer fees.
• Certificates of deregistration/cancellation, particularly for vessels once registered in other countries.
Copies of documents executed overseas shall have to be attested by a notary where they have been signed and be legalized by the nearest Indonesian embassy/consulate/representatives.
Provisional registration under Indonesian Law may be concluded for a vessel which is under construction, and the registration will last until the construction is completed.
The Certificate of Registry will no longer be valid if the owner of the vessel changes or the vessel loses its nationality.
Joint Venture Sea Transportation Company
KM 3/2001 provides that a joint venture sea transportation company between an Indonesian company or an Indonesian citizen with a foreign company or foreign citizen is required to own at least one Indonesian flag vessel of the size of 5,000 GT.
Bareboat Charter Registration
Based on Article 19 of GR 51/2002, it is clear that bareboat charter as one of the in rem rights over the vessels shall also be registered in the vessel registration. Nevertheless, the bareboat charter in practice is rarely registered in the Vessel Registry in Indonesia.
Vessel and Yacht Eligibility & Survey Requirements
There is no age limitation for vessels to be registered in Indonesia, however all vessels shall have the size of at least 20 M3 or 7 (seven) GRT.
GR 51/2002 requires an examination and evaluation on the technical and safety condition of a vessel as being designed, constructed, operated until the period when such vessel is no longer used by Vessel Safety Examination Officer. Every vessel that has fulfilled the vessel safety requirements shall be granted vessel safety certificate. Any vessels that sail in the Indonesian water shall obtain Vessel Safety Certificate; Radio Safety Certificate, Load Line Certificate and Passenger Vessel Safety Certificate (if applicable).
For the vessel safety requirement purposes, a vessel, based on certain type and size shall be classified with the classification agency. The national classification agency or an acknowledged foreign classification agency may be appointed to conduct examination and evaluation on the vessels under certain type and size in order to fulfill the vessel safety requirements.
The Decree of the Minister of Communications Number Th. 1/17/2 dated September 26, 1964 concerning the Regulation of the Implementation of the Vessels’ Obligation to Obtain Classification Certificate and the Instruction of the Minister of Communications number IM.8/AL.407/Phb-81 dated March 23, 1981 concerning the Obligation of the Indonesian-flag Vessels to Own Class Certification from Indonesian Classification Bureau (Biro Klasifikasi Indonesia) require the Indonesian-flag vessels with the following criteria to obtain class certification from PT (Persero) Biro Klasifikasi Indonesia (“BKI”):
• The vessels have 20 meters or more in length, or are 100 GRT in size, or have 100 HP or more engines.
• The vessels sail internationally although the said vessels have already obtained class certification from foreign classification bureau.
Vessels having nationality other than Indonesian, especially those that enjoy flags of convenience and have no class certificate from any class societies which are member of IACS, and which perform regular operations in Indonesia, are obliged to obtain class certification from BKI.
Recently, BKI has established co-operation agreements with several foreign classification societies as follows:
Mutual Representation and Dual Class:
• Korean Register of Shipping
• Nippon Kaiji Kyokai.
Dual Class:
• American Bureau of Shipping (ABS)
• Bureau Veritas
• Det Norske Veritas
• Lloyd's Register of Shipping.
Mutual Representation:
• China Classification Society
• China Corporation Register of Shipping
• Hellenic Register of Shipping
• N.V. Unitas of Belgium
• Polski Rejestr Starkow
• Registrul Naval Roman of Romania
• Rinave Portuguesa.
• Single Class:
• The Marine Service of Bangladesh
All classes have basically similar registration requirements and procedures. The Marine Inspection will make a survey in relation to registration on the vessel mostly at the time of docking. The following documents, inter alia, are required for survey in relation to registration:
• Measurement Letter
• Certificate of Nationality
• Certificate of Marine Pollution
• Certificate of Radio Communications
The Shipping Law provides that shipping agency activities can only be conducted by licensed shipping companies.
GR 82/1999 provides that foreign sea transportation companies whose vessels conduct sea transportation activities to and from Indonesia's harbors which are open to foreign trade shall appoint national sea transportation companies which meet the set requirements as general agents. The general agent conducts activities in managing the interest of the vessel that the general agent representing for during the period the vessel is in Indonesia. In addition, KM 33/2001 defines “general agent” as national sea transportation company appointed by foreign sea transportation abroad in order to manage everything in relation to the vessels of the foreign sea transportation (either owned, chartered or operated).
The requirements for a national sea transportation company to act as general agent for foreign shipping companies, as provided by KM 33/2001 are that the national sea transportation company shall (i) own sea-worth Indonesian-flag vessels with the minimum size of GT. 5000 cumulatively; and (ii) have the proof of general agency agreement, or have general agency appointment letter.
Crewing
The Shipping Law provides that Indonesian flag vessels must be manned by Indonesian citizens. Dispensation to employ foreign crews may only be given for special types of vessels. In addition, the Government Regulation No. 7/2000 requires all ship crews to hold seafarer certificate and provides the procedures to obtain such seafarer certificate.
Mortgages
The Shipping Law provides that vessels mortgage may only be encumbered on vessels which are registered in Indonesia. Based on Article 19 of GR 51/2002, the vessels mortgage shall be registered in the Indonesian vessel register. In principal, the documents which are required to execute mortgage of vessel and its registration are the loan agreements together with its related documents and a power of attorney from the owner of the vessel to the mortgagee/creditor to encumber and register the mortgage on the vessel.
An application must be filed to the Directorate General of Sea Communications or the Harbormaster acting as Vessel Registration Officer at the place of the vessel's registry requesting registration of the mortgage. The Harbormaster will verify that the following documents are in order:
• First copy (“gross akte”) of the vessel registration deed;
• Loan agreement, acknowledgement of indebtedness, or other executed instrument of indebtedness;
• Deed of Covenants Collateral to First Priority Indonesian Ship Hypothec (if any);
• Proof of identity of the applicant;
• Letter of approval from the Directorate General of Sea Communications (if the mortgagee/creditor is not an Indonesian citizen);
• Power of Attorney from the registered owned of the vessel to the creditor to establish and register the mortgage on the vessel;
The Vessel Registration Officer will prepare a draft of the mortgage deed. The form and substance of the deed should be derived from the deed appended to the loan agreement. The Vessel Registration Officer will draw up the mortgage deed and register it in the Daily Registry. After the registration fee is paid, the Vessel Registration Officer will enter a summary of the deed in the Master Registry and send the summary to the Directorate General of Sea Communications for inclusion in the Central Registry. The Vessel Registration Officer will issue the first copy of the deed to the mortgagee upon request.
Subsequent mortgages are allowed, the priority will rank in order of registration.
Fees
For more information, contact:
Director of Shipping and Seafarers
Directorate General of Sea Communication
Jalan Merdeka Barat No. 8
Jakarta 10 110 - Indonesia
Tel: (62) 21 3840 788
Fax: (62) 21 3505 681
Website: http://www.dephub.go.id
Contact
Ir . R. Agus H. Purnomo
Director of Shipping and Seafarers
Directorate General of Sea Transportation
Jalan Merdeka Barat No. 8
Jakarta 10 110 - Indonesia
Tel: 021 3813269
Fax: 021 3447017
Website: http://www.dephub.go.id
Stockholm Agreement 96
IMO Convention 48
* IMO amendments 91
* IMO amendments 93
SOLAS Convention 74
SOLAS Protocol 78
SOLAS Protocol 88
LOAD LINES Convention 66
LOAD LINES Protocol 88
TONNAGE Convention 69
COLREG Convention 72
CSC Convention 72
CSC amendments 93
SFV Protocol 93
STCW Convention 78
STCW-F Convention 95
SAR Convention 79
STP Agreement 71
STP Protocol 73
IMSO Convention 76
INMARSAT OA 76
INMARSAT amendments 94
INMARSAT amendments 98
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65
MARPOL 73/78 (Annex I/II)
MARPOL 73/78 (Annex IV)
MARPOL 73/78 (Annex V)
MARPOL Protocol 97 (Annex VI)
London Convention 72
London Convention Protocol 96
INTERVENTION Convention 69
INTERVENTION Protocol 73
CLC Convention 69
CLC Protocol 76
CLC Protocol 92
FUND Convention 71
FUND Protocol 92
FUND Protocol 2003
NUCLEAR Convention 71
MARPOL 73/78 (Annex III)
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89
OPRC Convention 90
HNS Convention 96
OPRC/HNS 2000
BUNKERS CONVENTION 01
ANTI FOULING 01
BALLASTWATER 2004
NAIROBI WRC 2007
HONG KONG CONVENTION
HNS PROT 2010
Cape Town Agreement 2012
SUA Convention 88
SUA Protocol 88
IMO Conventions
Status of Conventions Indonesia
IMO Convention 48 x
SOLAS Convention 74 x
SOLAS Protocol 78 x
SOLAS Protocol 88 x
SOLAS Agreement 96
LOAD LINES Convention 66 x
LOAD LINES Protocol 88 x
TONNAGE Convention 69 x
COLREG Convention 72 x
CSC Convention 72 x
CSC amendments 93
SFV Protocol 93
Cape Town Agreement 2012
STCW Convention 78 x
STCW-F Convention 95 x
SAR Convention 79 x
STP Agreement 71 x
Space STP Protocol 73 x
IMSO Convention 76 x
INMARSAT OA 76 x
IMSO amendments 2006
IMSO amendments 2008
FACILITATION Convention 65 x
MARPOL 73/78 (Annex I/II) x
MARPOL 73/78 (Annex III) x
MARPOL 73/78 (Annex IV) x
MARPOL 73/78 (Annex V) x
MARPOL Protocol 97 (Annex VI) x
London Convention 72
London Convention Protocol 96
INTERVENTION Convention 69
INTERVENTION Protocol 73
CLC Convention 69 x
CLC Protocol 76
CLC Protocol 92 x
FUND Protocol 76
FUND Protocol 92
FUND Protocol 2003
NUCLEAR Convention 71
PAL Convention 74
PAL Protocol 76
PAL Protocol 90
PAL Protocol 02
LLMC Convention 76
LLMC Protocol 96
SUA Convention 88
SUA Protocol 88
SUA Convention 2005
SUA Protocol 2005
SALVAGE Convention 89
OPRC Convention 90
HNS Convention 96
HNS PROT 2010
OPRC/HNS 2000
BUNKERS CONVENTION 01 x
ANTI FOULING 2001 x
BALLASTWATER 2004 x
NAIROBI WRC 2007 x
HONG KONG CONVENTION
x= ratification
d=denunciation