Don’t Miss Out: How TKDN Certification in Indonesia Can Make or Break Your Project in 2025

Introduction: Why TKDN Matters Now More Than Ever 

Indonesia’s rapid industrial development has prompted a stronger push for self-reliance and economic sovereignty. As part of this national strategy, the government continues to emphasize the importance of local content in public and private projects—both to boost domestic industries and reduce dependence on imports.

This movement is codified in the TKDN Certification in Indonesia, a regulatory framework requiring certain products, services, and technologies to contain a minimum level of domestically sourced components. The goal? To strengthen local supply chains, create jobs, and drive technology transfer within the country.

More than just a box to check, TKDN Certification in Indonesia has become a strategic advantage for companies operating in key sectors like energy (especially oil, gas, and renewables), telecommunications, construction, and manufacturing. It determines whether a company qualifies to win government contracts, participate in state-owned enterprise (SOE) procurement, or obtain certain licenses.

In a business environment where compliance, competitiveness, and credibility go hand in hand, understanding and securing TKDN certification is no longer optional—it’s essential.

This article explores how TKDN works, who needs it, how to get certified, and how to leverage it as part of a broader business strategy in Indonesia’s evolving regulatory landscape.

What Is TKDN Certification in Indonesia?

TKDN Certification in Indonesia refers to the official verification of the Tingkat Komponen Dalam Negeri—or Local Content Level—in goods and services used in government projects, SOE procurements, and various regulated sectors. This certification assesses the percentage of components, materials, labor, and processes that originate from within Indonesia.

The legal foundation for TKDN Certification in Indonesia is embedded in Presidential Regulation No. 12 of 2021 on Government Procurement of Goods and Services. This regulation emphasizes the prioritization of domestically produced goods and services, especially those that meet or exceed a certain local content threshold. In addition, several Ministerial Decrees, including those from the Ministry of Industry, Ministry of Energy and Mineral Resources (ESDM), and the Ministry of Communication and Information Technology (Kominfo), provide sector-specific guidance and implementation frameworks.

TKDN applies to three categories:

1. Products: This includes machinery, electronics, construction materials, and more. Manufacturers must demonstrate how much of the product is made using Indonesian components.
2. Services: Local service providers—including consultants, IT services, and engineering firms—must show evidence of Indonesian manpower, operational infrastructure, and know-how.
3. Combined Offerings: For complex projects like EPC (Engineering, Procurement, Construction), TKDN Certification in Indonesia evaluates the cumulative local content across all phases—design, materials, construction, and manpower.

The certification process is carried out by official verification agencies appointed by the Ministry of Industry. A TKDN certificate is typically valid for 2 years and can be renewed.

Ultimately, TKDN Certification in Indonesia serves a dual purpose: it aligns businesses with national interests and provides them with a competitive edge when bidding for projects with local content requirements. For many companies, this certification is not just about compliance—it’s about unlocking new market opportunities.

Who Needs TKDN Certification in Indonesia?

TKDN Certification in Indonesia is not optional for many businesses—it is a legal requirement, especially for those involved in government projects and sectors prioritized for national development. Companies that fail to comply risk disqualification from tenders, financial penalties, and reputational damage.

1. Government Procurement Participants

Any company—local or foreign—that supplies goods or services for central or regional government projects, state-owned enterprises (SOEs), or public infrastructure development must obtain TKDN Certification in Indonesia. This includes vendors bidding for tenders in the construction, energy, health, and public transportation sectors. TKDN is often a prerequisite in procurement scoring, giving certified businesses a competitive advantage.

2. Foreign Investors in Strategic Sectors

Foreign investors operating in industries like oil & gas, renewable energy, construction, telecommunications, and information & communication technology (ICT) must comply with local content obligations. Having TKDN Certification in Indonesia is crucial not only to secure licenses and project approvals but also to align with the Indonesian government’s broader goal of industrial independence and knowledge transfer.

3. Local SMEs and Manufacturers

For small and medium enterprises (SMEs) and domestic manufacturers, obtaining TKDN certification opens doors to previously inaccessible markets. Certified local suppliers are often prioritized in government procurement and can form partnerships with larger foreign investors who need to meet TKDN thresholds. It’s an opportunity for SMEs to scale by becoming a preferred link in national and multinational supply chains.

4. Penalties for Non-Compliance

Companies without TKDN Certification in Indonesia face multiple risks:

• Disqualification from government tenders
  
• Fines or administrative sanctions
  
• Delays in project execution or licensing
  
• Reduced credibility and trust with local partners
  
  

In summary, TKDN Certification in Indonesia is a gateway to opportunity and a shield against regulatory barriers. Whether you're a multinational company, a domestic manufacturer, or an aspiring local startup, securing this certification can directly impact your business growth and compliance.

Step-by-Step Guide: How to Obtain TKDN Certification in Indonesia

For companies seeking to enter government procurement or meet regulatory obligations, understanding the TKDN Certification in Indonesia process is essential. Here is a step-by-step guide to help businesses navigate the certification journey.

1. Document Preparation

The first step involves preparing detailed technical and financial documentation, including:

• Bill of Materials (BoM) showing all product components
• Cost structure breakdown, including labor, materials, overhead, and imported parts
• Proof of production facilities, licenses, and other relevant supporting documents

These documents form the basis for calculating the local content percentage. Accuracy and transparency at this stage are crucial for a smooth certification process.

2. Appointing a Certified Surveyor

Next, companies must engage an official, Ministry of Industry-approved surveyor such as:

• PT Sucofindo (Persero)
• PT Surveyor Indonesia (Persero)
• PT Biro Klasifikasi Indonesia (BKI)

These surveyors are authorized to conduct TKDN Certification in Indonesia and ensure the evaluation complies with national regulations.

3. Audit and Verification

The appointed surveyor will carry out a site audit, inspecting production facilities, verifying documents, and conducting interviews with operational and financial staff. This audit evaluates how much of the product or service is locally sourced—either in material, labor, or added value.

The result is a detailed report outlining the percentage of domestic content, which is the core of the TKDN Certification in Indonesia.

4. Certificate Issuance

Once the audit is completed and approved, the surveyor submits the report to the Ministry of Industry. The Ministry reviews and officially issues the TKDN certificate, which remains valid for a specific period (generally 2–3 years, depending on the product or service type).

5. Timeframe and Costs

The entire process typically takes 30–60 working days, depending on the complexity of the product or service and the surveyor’s workload. Costs vary but may range from IDR 30 million to over IDR 100 million.

Navigating the TKDN Certification in Indonesia process requires careful planning and professional support—but the benefits in compliance, market access, and long-term growth are substantial.

Real Business Impacts of TKDN Certification in Indonesia

Securing TKDN Certification can deliver substantial advantages for businesses operating in Indonesia—especially those working with government projects or state-owned enterprises.

One of the most significant benefits is preferential treatment in government tenders. Products and services with a higher TKDN Certification score often receive an uplift in evaluation scoring. This means that even if your price isn’t the lowest, your bid may still win due to your local content contribution. For businesses targeting public sector contracts, this certification can directly influence revenue potential and market access.

Another major impact is the enhanced brand reputation. Companies with TKDN Certification are seen as supporters of Indonesia’s economic development and national industry. This alignment with government priorities can improve stakeholder trust and attract customers who value local empowerment. It’s also a plus point in sustainability and ESG (Environmental, Social, and Governance) reporting.

In addition, TKDN Certification provides a competitive edge in partnerships with BUMNs (State-Owned Enterprises). Many SOEs now prefer or require suppliers to have a verified level of local content. Being certified signals your readiness to comply with national strategic goals, making your business a more attractive partner.

In summary, TKDN Certification isn’t just a regulatory checkbox—it’s a strategic tool for growth. It opens doors to government procurement, elevates your market position, and aligns your business with Indonesia’s industrial priorities.

Common Challenges in TKDN Certification in Indonesia (and How to Solve Them)

While the benefits of TKDN Certification are clear, many businesses encounter significant challenges during the process—especially those new to the Indonesian regulatory landscape.

One common issue is inaccurate documentation and miscalculations in the Bill of Materials (BoM) and cost structure. Since the TKDN calculation involves specific formulas for labor, materials, and manufacturing processes, even small mistakes can lead to rejection or lower scores. Properly documenting all components and correctly classifying them as local or imported is crucial for a successful TKDN assessment.

Another hurdle is the lack of familiarity with the relevant regulations. TKDN policies are often updated, and interpreting the guidelines from the Ministry of Industry can be confusing. Businesses without internal compliance teams may struggle to understand which products require certification or how to meet the thresholds.

Delays in verification and audit scheduling are also frequent, especially if your submission lacks clarity or if there’s a backlog with the appointed surveyor (such as Sucofindo or Surveyor Indonesia). These delays can impact project timelines and contract eligibility, particularly when bidding for government or SOE projects.

To overcome these challenges, engaging legal and consulting support can make a critical difference. Experts familiar with TKDN Certification requirements can guide you in preparing accurate documents, navigating regulations, and coordinating with certified verifiers. They also help ensure your application aligns with current policies—reducing the risk of costly delays or rejection.

In short, while TKDN Certification may seem complex, the right support can turn a frustrating process into a strategic advantage.

How Foreign Companies Can Benefit from TKDN Certification in Indonesia

For foreign companies operating in Indonesia, securing TKDN Certification can unlock access to a broader range of opportunities—especially in government-backed and state-linked projects. Though the certification process may seem tailored to local enterprises, foreign-owned entities can also benefit significantly by aligning their operations with national content requirements.

One effective strategy is forming local partnerships or joint ventures with Indonesian companies. By leveraging domestic capabilities—such as local manufacturing, labor, or distribution—foreign companies can raise their TKDN Certification score. This not only improves compliance but also enhances trust with regulators and project stakeholders.

Another impactful move is sourcing components or materials locally rather than importing. The higher the percentage of local content, the better the TKDN score. For example, replacing imported packaging, hardware, or assembly parts with domestically produced alternatives can push a product above the required threshold, making it eligible for preferential treatment in tenders.

This is particularly important when targeting public-private sector projects, such as infrastructure, energy, or healthcare initiatives, where TKDN Certification is often a prerequisite. Foreign companies with certified products or services are more likely to be considered for contracts involving government ministries, SOEs, or regionally funded developments.

In short, while TKDN requirements may appear restrictive at first, they can actually offer foreign companies a strategic edge—if approached correctly. By investing in localization and compliance, international businesses not only align with Indonesian industrial policies but also increase their competitiveness in a growing and regulated market.

Final Thoughts: Future Trends & Strategic Advice

As Indonesia continues to advance its industrial strategy under the Making Indonesia 4.0 roadmap, the importance of local content requirements is expected to grow. TKDN Certification will likely become even more prominent—not just in manufacturing, but also in emerging sectors like digital infrastructure, healthcare, and renewable energy.

The government may expand TKDN-related policies to more product categories and enforce stricter compliance, especially for companies involved in public-private partnerships or those supplying to SOEs. Businesses—both local and foreign—should prepare for this shift by evaluating their current operations, supply chains, and compliance readiness.

The strategic move? Get assessed early.

Starting the TKDN Certification process before it becomes mandatory helps you avoid delays, bidding disqualifications, or missed opportunities. It also positions your company as a forward-thinking, locally committed player in the eyes of regulators and partners.

In a competitive and evolving business environment, aligning with national priorities isn’t just about following rules—it’s about building long-term value and resilience.

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