Business in Indonesia

Business in Indonesia

With the region's largest population and largest economy, Indonesia is the giant of Southeast Asia and one of the world's most populous democracy. Representing about 40% of the economy and the population of ASEAN, Indonesia is the region's only member of the G20. Its size and remarkable economic growth also attracts many investors.

  • Official country name: Republic of Indonesia
  • Capital: Jakarta
  • Total Area: 1,904,569 km²
  • Government: Unitary presidential constitutional republic
  • Currency: Rupiah, Rp – IDR
  • Drives on the: left
  • Calling Code: +62
  • Internet TLD: .id
Map of Indonesia
Map of Indonesia

Demographics

  • Population: 263,510,000 (2017 Estimate)
  • Population Density: 124.66/km²
  • Official Languages: Indonesian
  • HDI: 0.689 (medium)
  • Main ethnic Groups: (2010 census)
    • Javanese 40.22%
    • Sundanese 15.5%
    • Batak 3.58%
    • Other Sulawesi ethnic groups 3.22%
    • Madurese 3.03%
    • Betawi 2.88%
    • Minangkabau 2.73%
    • Buginese 2.69%
    • Malay 2.27%
    • Other South Sumatran ethnic groups 2.16%
    • Bantenese 1.97%

The Indonesian business environment

National emblem of Indonesia
National emblem of Indonesia

With its population of more than 260 million and growing middle-class and a nominal GDP of about 1 trillion USD, Indonesia now attracts all eyes of investors interested in grabbing a share of its massive and rapidly growing market. In transition towards a modern, industrial and service economy, Indonesia is growing away from its dependence on exports of raw materials.

Though submitted to political changes inherent to its democracy, Indonesia shows a strong economic resilience. Its government aims at ambitious growth plans and tackling the challenges of connecting a country made up of more than 17,000 islands. With policies aiming at the development of new infrastructures, the Indonesian government targets long-term, sustainable growth and attractiveness through a business-friendly taxes that helps both small and large companies.

Main taxes in Indonesia

Key economic data of Indonesia

  • GDP (PPP): USD 3.027 Trillion (2016 Estimate)
  • GDP per Capita (PPP): USD 11,699
  • GDP (Nominal): USD 940.953 Billion (2016 Estimate)
  • GDP per Capita (Nominal): USD 3,635
  • GDP Growth:
    • 5.0% (2014)
    • 4.8% (2015)
    • 5.1% (2016e)
    • 5.3% (2017f)
  • GDP by sector: (2014 Estimate)
    • agriculture: 13.7%
    • industry: 42.9%
    • services: 43.3%
  • Labor force: 123.7 million (2016 Estimate)
  • Labor force by occupation: (2012 Estimate)
    • agriculture: 38.9%
    • industry: 22.2%
    • services: 47.9%
  • Unemployment: 6.3% (2016)
  • Inflation: 3.02% (October 2016)

Key sectors of Indonesia

With its large land area and tropical climate, Indonesia is rich in natural resources such as oil and minerals, timber and raw of semi-transformed agricultural products.

However, to limit the country's dependence on commodities, increase the value added to the economy and develop the country that is still one of the least developed in Southeast Asia, the authorities are aiming at growing the economy away from the export of natural resources.

Indonesia's large workforce make the country and ideal hub for industrial production. The country's large cities are transforming into specialized industrial and service hubs to help the modernization of its economy, notably through the industries of machinery, electronics, automotive and auto-parts.

With its size, diversity and rich cultural heritage, Indonesia is also aiming at boosting its tourism and hospitality sector. Upon these strengths which notably include several UNESCO world heritage sites, the authorities rightfully promote tourism in the country as "Wonderful Indonesia".

Main industries of Indonesia

  • petroleum and natural gas
  • textiles
  • apparel
  • footwear
  • mining
  • cement
  • chemical fertilizers
  • machinery
  • electronics
  • hardware
  • software
  • telecommunications
  • plywood
  • rubber
  • food
  • tourism

Indonesia digital

Indonesia's large population is also one of the most active on social media in the region. This very large and active digital community, and the growing penetration of mobile devices help the revolution of several underdeveloped industries like financial services through new FinTech startups.

Numbers of Internet, social media and mobile users in Indonesia in January 2017

Indonesia for professionals and work

Indonesia provides a very diverse environment for foreigners willing to work in the country, depending on their situation: large cities like Jakarta, touristic destinations like Bali, or remote islands and countrysides.

Salaries are lower than in other countries of the region, since the country is one of the least developed, but there are large differences between certain regions attracting foreigners such as Jakarta, Bali or Batam islands and the rest of the country.

10 hot jobs and salaries in Indonesia 2016

Indonesia trade data

Though it is diversifying with industrial exports, Indonesia's trade is still heavily reliant upon raw materials and semi-transformed products.

Exports: USD 144.4 Billion (2016)

Export Goods:

  • oil and gas
  • cement
  • food
  • electrical appliances
  • construction
  • plywood
  • textiles
  • rubber

Main Export Partners: (2014 Estimate)

  • Japan 13.1%
  • China 10%
  • Singapore 9.5%
  • United States 9.4%
  • India 7%
  • South Korea 6%
  • Hong Kong 5.8%
  • Malaysia 5.5%

Imports: USD 135.6 Billion (2016)

Import Goods:

  • machinery and equipment
  • chemicals
  • fuels
  • foodstuffs

Main Import Partners: (2014 Estimate)

  • China 17.2%
  • Singapore 14.1%
  • Japan 9.6%
  • South Korea 6.7%
  • Malaysia 6.1%
  • Thailand 5.5%
  • United States 4.6%

Latest business resources for Indonesia

Insights and trends of e-commerce in Indonesia

E-commerce in Indonesia

Indonesia has the largest population in Southeast Asia, by far, and an e-commerce penetration that is still very low, making it one of the hottest e-commerce market in the world. Attracting both global and local companies’ interests, Indonesia now has fast growing e-commerce scene poised to become a global powerhouse. Continue reading

Top 45 companies from Indonesia’s LQ45

Indonesia's 45 largest listed companies

The 45 largest public listed companies of Indonesia, components of the LQ45 index, are major actors in the economy of Indonesia, Southeast Asia and the world. With a short presentation of each company, its sector and logo, this following list provides useful information and links to the company’s website and its stock quote. Continue reading

Insights on news consumption in Indonesia

Indonesia news consumption

With the spread of mobile devices in Indonesia, ways of consulting and consuming news are changing rapidly. Through new online media, Indonesians from all age groups and socioeconomic categories are adapting their behaviors and engaging into new ways to get informed and entertained. Continue reading

UNESCO World Heritage Sites in Indonesia

UNESCO World Heritage Sites in Indonesia

With a mix of historic sites from diverse architectural traditions and a bountiful yet tumultuous nature, Indonesia hosts eight World Heritage Sites classified by the UNESCO. Famous Buddhist and Hindu temples, rich natural parks with unique endemic ecosystems and volcanoes are but a few highlights of Indonesia’s natural and cultural wealth. Continue reading

Inside Go-Jek’s success in Indonesia

Go-Jek: ride-hailing in Indonesia

Ride-hailing applications are weighing a fierce battle in Indonesia to conquer its large and promising market. Competing against global and regional giants, the local application Go-Jek has found a way to seduce an important base of users and secure large funding to fuel its diversified growth in hyper-local services. Continue reading

FinTech startups in Indonesia

Indonesia FinTech startups

Indonesia has the largest population in Southeast Asia and one of the fastest growing economies. As financial technologies – FinTech – are becoming some of the hottest business opportunities in Indonesia, many startups and companies engage in the competition to conquer big and promising markets. Continue reading

Indonesia Salary Guide 2016

indonesia salary guide 2016

The most populous country of Southeast Asia, Indonesia has a large workforce, a fast-growing economy and a dynamic and varied business environment with many work opportunities. Potential candidates and hiring companies must be aware of salaries and compensations for the right skills and experience. Continue reading

Overview of India-Indonesia relations

With deep-rooted ties that go back thousands of years, India and Indonesia have always been natural partners in culture, economy and politics. However, with the changing dynamics in Asia and the world, the two countries are looking to develop their exchanges and cooperation further and bring their relations to a new level. Continue reading

Internet and digital landscape in Indonesia

7 digital insights of Indonesia

With a growing connectivity and a large population that is extremely active online, Indonesia is one of the world’s leading countries for the use of digital technologies. Through Internet, mobile, e-commerce or social media, digital in Indonesia is a very attractive market both for its size and growth potential. Continue reading

Infographics on tourism in Indonesia

Indonesia tourism infographics

A more and more famous destination for international tourism, Indonesia has a growing number of foreign tourists arrivals, both for leisure and business. With a long average stay and high daily spending, tourists are important for many businesses in the country. These infographics dive into the details of tourism in Indonesia. Continue reading

Indonesia flag
List of the 45 Indonesian companies in the LQ45 index, with logo, sector and stock symbol