Licence Holding Models in Indonesia: Own Company, Distributor or Independent Holder

1. Key takeaways

The choice of licence holding model is the single most consequential decision in Indonesia, because under Indonesian rules the rights holder named on the registration certificate is the holding company itself. Foreign manufacturers cannot hold the certificate directly. Whoever holds the licence legally owns it, and choosing the wrong model can mean that five years later the only way to correct the structure is a fresh registration. The three available models are a wholly owned Indonesian company (PT PMA), a distributor holding the licence, or an independent third-party licence holder.

• Model one: establish your own PT PMA, obtain IDAK and CDAKB, and hold the licence in your own entity.
• Model two: appoint a distributor that already holds IDAK and CDAKB, which then handles import, distribution and after-sales service.
• Model three: use an independent, neutral licence holder, with the manufacturer retaining freedom over its commercial arrangements.
• Foreign investors may hold 100 percent of a device distribution business under the positive list of investment rules, but primary clinics (Klinik Pratama) remain reserved for local small and medium enterprises.
• Changing the licence holder is a variation that requires a new application, and terminating a distributor appointment can constitute grounds for revocation of the marketing authorisation under Permenkes 5/2026.

2. Legal basis

Two regulatory anchors define the framework. Permenkes No. 11/2025, standards 3 and 6, set out the qualification of the licence holder: the holder must possess a distribution licence and a good distribution practice certificate, and must be appointed by the manufacturer. Permenkes No. 5/2026, Article 51 paragraph (1) point d, governs the consequences of termination of the authorisation. Combined with the principle that the certificate belongs to the holding company, these provisions mean that replacing the licence holder is a change that requires re-application. On ownership, the positive list of investment rules permits 100 percent foreign shareholding in device distribution, so a PT PMA is a legally available vehicle; the reservation of certain service formats, notably primary clinics (Klinik Pratama), for local small and medium enterprises does not extend to device distribution itself. Read together, these rules explain why the holding decision is structural rather than commercial: the appointment, the qualification and the revocation consequences all attach to whoever is named on the certificate, and no distribution agreement between commercial parties can change that allocation.

3. Expert insights

The three models differ most sharply on control, cost, speed and exit. The comparison below is a practical summary of the trade-offs:

The value of the independent licence holder lies in solving the distributor lock-in problem. When the distributor is simultaneously the licence holder and the channel, a breakdown in cooperation confronts the manufacturer not with the question of finding another agent but with re-registration plus a supply interruption. An independent holder separates legal licence holding from commercial distribution, preserving the manufacturer’s initiative to adjust channels. This is precisely the scenario that the regulatory framework makes expensive: termination of the appointment can trigger the revocation grounds in Article 51 paragraph (1) point d, so the party that holds the certificate holds the leverage. The practical consequence is that the holding model should be settled before the first registration is filed, because once the certificate is issued in a particular name, the cost of moving it is fixed by regulation rather than by negotiation, and the five-year certificate cycle is a long time to spend inside a structure chosen mainly for its speed at launch.

4. Practical recommendations

• Before signing, answer one question: if you need to replace this distributor in three years, will the certificate still be in your hands? If the answer is no, redesign the holding structure rather than relying on contractual clauses as a backstop.
• Match the model to the commitment: choose a PT PMA for long-term, multi-product-line strategies; choose a distributor for a limited-budget single-category trial; choose an independent holder when channel flexibility matters.
• Verify any candidate holder against Permenkes No. 11/2025 standards 3 and 6: a valid distribution licence, a valid good distribution practice certificate, and a formal manufacturer appointment.
• Where a distributor holds the licence, secure contractual change-cooperation obligations, but recognise that these do not override the re-registration requirement.
• Confirm the foreign ownership position for your structure: 100 percent foreign shareholding is permitted for device distribution, while formats such as primary clinics remain reserved for local small and medium enterprises.
• Factor the annual licence service fee of an independent holder into cost comparisons against the full fixed compliance cost of your own entity structure, including premises, personnel and CDAKB maintenance.
• For multi-category portfolios, note that each product corresponds to one marketing authorisation with one holder, so the holding decision repeats for every registration unless a single independent holder is used across the portfolio.

5. Verification checklist

• □ Confirm Permenkes No. 11/2025 standards 3 and 6 on holder qualification: distribution licence, good distribution practice certificate, manufacturer appointment.
• □ Confirm Permenkes No. 5/2026 Article 51 paragraph (1) point d on the consequences of termination of the authorisation.
• □ Confirm the 100 percent foreign shareholding allowance for device distribution under the investment list, and the reservation of primary clinics for local small and medium enterprises.
• □ Note that the three-model comparison presented here is a practical summary, pending verification against the facts of your specific project.

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