Here is a very beautiful animation video by the TMF Group that presents the opportunities and challenges of doing business in Indonesia, the world’s fourth most populous country with a strong economic growth.
Highlights of the Indonesian business environment
Key points
- World’s 4th largest population
- Economy growing at about 6% per year
- Young workforce
- Strong domestic consumption
- Vast natural resources
- Tropical climate
- Bahasa Indonesia is the main language, English widely used in business context
Important cities
- Jakarta:the capital
- Surabaya: main seaport and commercial hub in the East
- Bandung: tourism, manufacturing and education center
- Medan: capital of the North Sumatra province
Main industries
- Manufacturing and processing come up to about 25% of Indonesia’s GDP
- Agriculture
- Trade
- Hospitality
Legal aspects
There are several government agencies and bodies involved in doing business, but foreign investment being a priority, corporate income tax has recently been reduced, licensing processes have been simplified and improved protection of foreign firms.
Challenges of doing business in Indonesia
- Income and tax fillings required in Bahasa Indonesia and defined in Indonesian Rupiah
- Starting a Limited Liability Company (LLC) can take up to 45 days, involving multiple filings and costing 4 times more than in Thailand
- Paying taxes requires multiple payments, and employer are required to retain taxes of employees to be paid
- Important operational challenges in bureaucratic red tape, corruption, access to capital and infrastructure bottlenecks
Watch the video on Youtube
