In Indonesia, the government actively promotes the use of domestically produced goods and services through a regulatory framework known as TKDN or Tingkat Komponen Dalam Negeri. TKDN Certification is an official document that indicates the percentage of local content in goods, services, or a combination of both, used in production or project execution in Indonesia. TKDN certification plays a critical role in ensuring transparency and compliance with domestic content requirements.
The Indonesian government mandates the use of TKDN certification, particularly in sectors such as infrastructure, energy, telecommunications, manufacturing, and public procurement. According to Prolegal, this certification is a strategic tool to enhance the competitiveness of local industries.
Objectives of TKDN Implementation
TKDN certification serves several strategic national objectives :
- Promoting domestic industries by increasing the use of locally produced components.
- Reducing reliance on imported goods.
- Encouraging innovation and industrial growth within Indonesia.
- Ensuring compliance with presidential regulations, especially in government funded projects.
Types of TKDN and Calculation Method
TKDN is calculated differently depending on the type of product or service :
- Goods, based on the cost of local raw materials, labor, factory overhead, and profit.
- Services, calculated based on local labor, operational costs, and company overhead.
- Combined goods and services both formulas are integrated to reflect accurate local content.
- The result is presented as a percentage. A higher TKDN value signifies a higher contribution of local content.
Benefits of TKDN Certification for Businesses
Implementing and obtaining TKDN certification provides multiple advantages for companies :
- Increased Business Opportunities
Companies with higher TKDN scores have a competitive edge in government and BUMN (State-Owned Enterprises) projects that prioritize local content.
- Market Preference
Procurement policies often favor products with certified TKDN values, boosting marketability and credibility.
- Support from Government Incentives
Businesses may gain access to tax incentives, subsidies, and other benefits aligned with national development goals.
- Strengthened National Identity and Economy
Supporting domestic content contributes to the growth of Indonesia’s industrial sector and fosters a stronger economic foundation.
Who Needs TKDN Certification?
Businesses involved in the production of goods or provision of services for government or state-owned projects are typically required to obtain TKDN certification. This includes companies in :
- Energy and mining
- Construction and infrastructure
- Telecommunications and IT
- Medical equipment manufacturing
- Electronics and automotive
How to Get TKDN Certification?
The general process for obtaining TKDN certification includes :
- Application Submission (Companies submit relevant documents to authorized certification bodies).
- Inspection and Audit (The certifier conducts on-site assessments and verifies the local content calculation).
- Issuance of Certificatem (If the product meets requirements, the TKDN certificate is issued with a detailed breakdown of content value).
Conclusion
TKDN certification is not just a regulatory requirement it’s a strategic asset for businesses operating in Indonesia. By aligning with the government’s domestic content policy, companies can gain significant advantages in both market positioning and long-term sustainability.
