5 things to know before starting business in Indonesia

While setting up your company or starting a business in a new environment, it's good to get to know its rules and laws.  To succeed one should get the lay of the land and only then start introducing the investment.

In recent years Indonesia has become a target for investors. Nothing strange in that - it's a rapidly developing, newly open for local and foreign investments, reach in resources, very populous country. For those who are interested in making business in Indonesia, here is a list of things to know before even starting.

1.  First things first
If you've set your mind on investing in Indonesia, you should know that there are two primary ways you could do this.
You can either establish an Indonesian Limited Liability Company (PMA), where two parties hold business shares; or you could choose a local company to be your agent or distributor to represent your company. Additionally, there is a possibility of opening  Representative Office, though it comes with several restrictions to the activities of the company itself.

2. Presence on site
In 2013 came the regulatory change through the Taxation Regulation 20/2013.  Under this regulation, each business in Indonesia is required to have local representation in the form of a director with an Indonesian tax card or a personal domicile letter held in Indonesia.  Which means that one of the members of the company's management needs to be an Indonesian citizen or a foreigner with a work permit from other company registered in the country.

3. Local language
English is considered the business language, though still Indonesian remains the official language in the country.  For that reason, it may occur that you'll need a translator, especially if you'd be working anywhere outside Jakarta. Of course, the best solution would be to pick up the language yourself or the few phrases at least. It is also advisable to print details on business cards in Bahasa Indonesia, for wider recognition within all encountered parties.

4. Business savoir-vivre
Different countries, different groups, and ecosystems mean specific changes in the appropriate etiquette. In Indonesia hierarchy is well respected. When meeting Indonesian counterparts for the first time, the highest-ranked officials of the company are chosen as representatives. Therefore, your company should choose the officials corresponding to the rank of other parties. It is also endorsed to have a local representative who will make the internal introductions on your behalf.

5. Just keep going forward
Statistically doing business in Indonesia is getting easier with every year. Still, there are mentions about the red tape of bureaucracy that keep investors company while doing business. It shouldn't be seen as a limitation rather than a possibility to show what one is made of because that's what business (and life) in Indonesia is really about -  exploring the opportunities and coping with constant changes.

For those willing to take the risk, accessing the 261.1 million consumers base should be quite rewarding. Thanks to those few given tips you'll be already a few steps ahead of the competition which still is not too extensive. Taking from those who already are in the market - you'll see that any undertaken efforts are worth the outcomes that will come.

Written by Marcelina Luna Deńca




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