Letter of Authorisation for Indonesia: Terms, Exclusivity and Termination Consequences

1. Key takeaways

The letter of authorisation is the document that decides who holds the Indonesian licence, and everything else follows from it. The LoA is the legal instrument by which an overseas manufacturer or principal appoints an Indonesian company as its sole agent, sole distributor or exclusive distributor and authorises it to register the product. Kemenkes requires a legalised LoA to be submitted with the application. Its importance rests on three consequences: the validity of the registration certificate follows it, the certificate can be revoked when it is terminated, and it determines who is entitled to hold the licence.

Because the certificate inherits its term from the authorisation, the LoA is not an administrative formality to be signed quickly. It is a commercial and regulatory commitment whose duration, exclusivity and termination terms will govern the product’s Indonesian market position for years. Getting the terms right at signature is far cheaper than trying to repair them after the certificate has issued.

• Term: the authorisation or appointment must run for no less than 2 years and no more than 5 years; where the term is not stated or exceeds 5 years, the marketing authorisation is counted as 5 years.
• Standard practice: sign for 5 years; a 2-year LoA caps the certificate at 2 years and doubles the renewal frequency.
• Exclusivity: one product cannot be appointed to more than one distributor at the same time; multiple distributors are possible only across different SKUs.
• Termination: terminating a distributor or importer authorisation can be a statutory ground for revoking the marketing authorisation.
• Form: the LoA must be legalised — by apostille or Indonesian embassy legalisation.

2. Legal basis

The term rules come from the regulations on sole agents and sole distributors: the authorisation or appointment must have a validity of not less than 2 years and not more than 5 years, and where no term is written or the term exceeds 5 years, the marketing authorisation is treated as 5 years. The revocation rule sits in Permenkes No. 5/2026, Article 51 paragraph (1) point d: the manufacturer’s termination of the authorisation of a distributor or importer can constitute a statutory ground for revoking the marketing authorisation. The institutional design behind the exclusivity rule is that products under one trade name or brand may only be registered by a single licence holder. The references below were verified on 26 October 2026.

Termination has a defined practical sequence. When the authorisation is terminated, the new licence holder must apply afresh. The outgoing holder may, after the new authorisation has been issued and with Kemenkes approval, continue selling remaining stock for 6 months. Both the reapplication requirement and the sell-off window are consequences of the termination itself, which is why termination clauses in the LoA deserve the same care as the grant clauses.

3. Expert insights

Insight 1: the 5-year term is the standard for a reason. Signing the LoA for 5 years aligns the authorisation with the longest certificate term the rules allow. Signing for 2 years is lawful but shortsighted: the certificate will carry the same 2-year limit, and the renewal workload doubles. Since the regulation counts an unstated or over-long term as 5 years, there is no advantage to be gained from unusual drafting — the clean choice is 5 years from the outset.

Insight 2: exclusivity is per product, not per brand. The rule is that one brand may have multiple distributors, but each must correspond to different SKUs. Giving product one to distributor A and product two to distributor B is permissible; giving product one to A, B and C simultaneously is not. The constraint flows from the design that products under a single trade name or brand can be registered by only one licence holder. Portfolio planning therefore has to be done at SKU level before the first LoA is signed, because the structure cannot be retrofitted onto a competing set of authorisations.

Insight 3: apostille has simplified, but not wholly replaced, the old route. Indonesia has been a party to the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents since 4 June 2022: public documents such as notarial deeds and sworn translations, once stamped with an apostille by the competent authority of the issuing state, no longer need Indonesian embassy legalisation. China acceded to the Convention in 2023, so Chinese public documents can now travel the apostille route. In practice, however, for countries where language differences may create review obstacles, some practitioners still recommend the Indonesian embassy legalisation route — that recommendation is practical experience, not a mandatory requirement.

4. Practical recommendations

• Sign for 5 years. Align the LoA term with the maximum certificate term; avoid 2-year terms that compress the certificate and double the renewal workload.
• Define the product and model scope precisely. The authorised products and model range must match what will actually be registered, including accessories and specifications.
• State whether the appointment is exclusive. Align the exclusivity wording with the one-brand-one-holder rule and the SKU allocation across distributors.
• Include a change-cooperation obligation. The Indonesian party must be obliged to cooperate in licence changes rather than holding the file hostage.
• Provide for certificate and stock handling on termination. Set out the treatment of the registration certificate and remaining inventory, within the 6-month sell-off frame.
• Secure access to the technical file. The manufacturer must retain access to the technical documentation held by the licence holder.
• Confirm the legalisation route at signature. Apostille is the default; weigh the embassy route where language differences may create review obstacles.

These six drafting points — product and model scope, term, exclusivity, change cooperation, termination handling and technical file access — decide whether, five years on, the manufacturer is the acting party or the responding party. A LoA that is silent on them leaves every future dispute to be settled under the other party’s terms, at exactly the moment when the manufacturer has the least leverage.

5. Verification checklist

• □ LoA term set between 2 and 5 years, with 5 years selected as standard practice
• □ Authorised products and model range stated and consistent with the intended submission
• □ Exclusivity wording aligned with the one-brand-one-holder rule; SKU allocation across distributors confirmed
• □ Change-cooperation obligation included
• □ Certificate and remaining-stock handling on termination provided for, including the 6-month sell-off frame
• □ Manufacturer’s access to the technical file secured
• □ Legalisation completed: apostille since 4 June 2022, or Indonesian embassy legalisation where chosen
• □ Provisions confirmed against Permenkes No. 62/2017 Articles 1, 13, 24–25 as carried forward by Permenkes 5/2026, and Article 51 paragraph (1) point d

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across Southeast Asia, including Indonesia. Our team prepares dossiers to ASEAN CSDT structure, manages AKL/AKL-I submissions with Kemenkes, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com