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TKDN certification, or Tingkat Komponen Dalam Negeri, is a mandatory requirement for many businesses operating in Indonesia, particularly those supplying goods and services to government projects or state-owned enterprises. TKDN certification verifies the percentage of locally sourced content used in your products or services. In recent years, the Indonesian government has enforced TKDN compliance more strictly to support domestic industries, reduce reliance on imports, and enhance national competitiveness.

If you plan to offer products or services in the telecommunications, construction, energy, or manufacturing sectors, understanding how to apply for TKDN certification is crucial.

1. Understand TKDN requirements

Before you begin the application process, it is essential to understand which regulations apply to your product or service. The TKDN calculation standard is regulated by the Ministry of Industry and, in some sectors, in cooperation with other ministries or regulatory bodies.

Typically, the TKDN value is calculated as follows:

- Material composition: The proportion of local materials or parts used.

-Labor composition: The share of the Indonesian workforce involved.

-Indirect costs: Costs incurred within Indonesia.

Each section has specific thresholds that you must meet. For example, certain telecommunications equipment must have a minimum TKDN percentage to qualify for government procurement.

2. Prepare documents

Applying for TKDN certification requires detailed documentation to prove the source and proportion of your local ingredients. Common documents include:

- Company legal documents (e.g., incorporation deed, business license).

- Product specifications and bill of materials.

- Production flow chart.

- Cost breakdown (materials, labor, indirect costs).

- Indonesian Human Resource Use Certificate

- Previous certification (if any).

Ensure all documents are accurate and complete. Incomplete submissions will typically delay the process.

3. Verification agency

The Ministry of Industry authorizes independent verification bodies (investigators) to evaluate TKDN calculations. After selecting your preferred surveyor, you must submit your application and supporting documents to them. The surveyor will:

- Conduct a thorough document review.

- Access your production facility to verify the data.

- Assess your production capacity and supporting evidence.

This stage is crucial because any discrepancies could lead to rejection or a lower TKDN score.

4. Verification and Evaluation

The verification process typically takes 30-60 business days, depending on the complexity of your product and the workload of the assessors. The assessors will calculate the actual TKDN percentage and create a report summarizing their findings.

At this stage, your team must be able to assist with clarification or provide additional evidence as required.

5. Issuance of TKDN Certificates

Upon completion of the assessment, the assessor will issue an official TKDN certificate proving the local content percentage of your product. This certificate is valid for a specific period, typically 2-3 years, depending on regulations.

With the certificate, you can:

- Participation in the bidding requires a minimum TKDN.

- Comply with mandatory reporting obligations.

- Promote your products in accordance with local standards.

Please remember that any changes to your production processes, materials, or suppliers may require you to recertify.

6. Maintain compliance

Once you are certified, it is crucial to maintain compliance by:

- Keep your records up-to-date.

- Notify the verification body of any significant changes.

-Prepare for a potential audit.

Non-compliance or falsification of data may result in sanctions, including the revocation of certificates and blacklisting of procurement opportunities.