Doing Business in Indonesia
Business & Culture Blog
Muslims all over the world will celebrate the month of Ramadan starting on the 27th of May.
Also in Indonesia, the country with the biggest Muslim population Ramadan (or Ramadhan) is an important time in the year.
For one month Muslims will be fasting from sunrise till sunset. Ramadan is not only a time of fasting, but also of contemplation, worship and intensive remembrance of Allah and last but not least a time for family and friends.
Being among the top 15 countries with the fastest growing medical market, Indonesia gives a big opportunity for the sales and distribution of medical devices.
The current market size is estimated to be US$ 750 Mio. and is showing a constant growth rate of approx.. 12 – 13%. Analysts see the market grow up to US$ 1.200 Mio by 2019.
As Indonesia can only satisfy its needs for medial devices with a local production of 15%, the country is strongly depending on the import of medical equipment and thus on foreign producers and manufactures.
A steadily growing middle class with solid income and a upcoming awareness for health prevention and medical treatment. Hospitals, medical facilities and medical centers are build throughout the country.
The government is currently investing huge amounts in medical infrastructure and private investors seek for opportunities to invest in the market of privately operated hospitals in Indonesia.
There is a new regulation regarding Social Insurance for Outside Of Working Hours (JSHK – Jaminan Sosial Dalam Hubungan Kerja) issued by the governor of DKI Jakarta, namely Pergub No. 136 of 2009.
The new regulation has the same substance and purpose as the Governor Regulation No. 82 of 2006 concerning Accident and Death Insurance Outside Of Working Hours (JKDK), which has been revoked by the Supreme Court in 2008.
It’s a fact: Many companies operating in Indonesia are having legal structures which are not sustainable on a long-term or which may have negative influence into operations and the business. A typical structure is that a local shareholder involved (either as a nominee or as a partner) in business.
Of course, this might make sense in case of having a “real” local partner, which is many times essential to run business in Indonesia. But in most of the cases the local partner was long, long time ago involved to get better market access, meet regulatory requirements or because it was necessary at that time to get a business license for foreign investment.
It might be time to reconsider your business structure in Indonesia and look out for alternatives.
Recently we have informed you about a new Governmental Regulation No. 29 of 2016 on Authorized Capital of Limited Liability Company Amendment.
Upon release of this regulation it was not clear to which extend the regulation would apply for foreign invested companies (PT PMA) in terms of proofing the paid-in capital and minimum capital requirements.
On 14 July 2016, Government has issued the Governmental Regulation No. 29 of 2016 on Authorized Capital of Limited Liability Company Amendment.
This new regulation revokes the Government Regulation No. 7 of 2016 (old regulation) and re-regulates the minimum amount of the authorized and paid-up capital of a Limited Liability (PT) Company.
Important for business and for your work planing in Indonesia is to know about some of the important national holidays in Indonesia.
We have prepared an overview of the holidays for 2017, which you can download below.
In 2017 Indonesia added a new public holiday. The 1st of June marks the so-called Hari Lahir Pancasila - the birth of the national ideology, which was defined on that day in 1945 by Indonesia's founding father Sukarno. If you want to know more about the Pancasila check our related blog post.
In addition to the regular holidays Indonesian employees enjoy some extra days of holiday before or after a national holiday. The so-called „Cuti Bersama“ are not mandatory for private companies but governmental offices, ministries and other public authorities will be closed on those days.
PANCASILA is Indonesia National Ideology and Constitution. First Draft of PANCASILA was made by President Soekarno on 01 June 1945.
Bhinneka Tunggal Ika is the official national motto of Indonesia. The phrase is Old Javanese translated as Unity in Diversity. It is inscribed in the Indonesian national symbol, Garuda Pancasila.
Leading employees and teams never easy to accomplis, but when working in a foreign country some things add-up to make it even more difficult. Leadership depends a lot on culture, on personal behavior, education and social impacts.
In Indonesia, management and leadership styles are strongly influenced by local culture, the cultural diversity of the country, and by the development and history of the country.
This article will show you some important differences in leadership and management between Western countries and Indonesia, and will give you some advice for working with Indonesian employees and teams.
The Islamic month of fasting, Ramadhan is starting in Indonesia on 5. / 6. of June this year.
In the country with the biggest Muslim population in the world, this month is one of the most important religious events.
Muslims are fasting from sunrise to sunset for a period of 30 days.
We recently wrote an article about negotiations in Indonesia and the feedback was overwhelming. Thanks to all of you for the great feedback.
Approached by many people about this article we think it is time to talk about the change in Indonesian culture, which we are currently facing.
There are times of change, and in Indonesia we are in the middle of a culture change.
You have already taken the first hurdles on your way to Indonesia and are preparing for initial negotiations with Indonesian partners or customers? The flight is booked, meetings confirmed and the agenda is set?
That your next steps are going well, you should now be prepared that negotiations in Indonesia run somewhat different than in western countries.
This article shows some peculiarities in negotiations with Indonesian partners and customers and provides a brief overview of Dos and Don'ts.
The Indonesian economy is booming and promises steady growth. Good opportunities for companies so. But the entry into this huge market is also a challenge for international companies.
Due to a different business understanding, a different way of life and culture, some points should be considered to overcome hurdles and make successful business.
The announced changes in the Negative Investment List (DNI), which should attract more foreign Investment into Indonesia is still pending.
In the X Economic Package, which was released in February 2016 Indonesia promised to make some major changes in the so-called Negative Investment List. Several business sectors, which have been closed or partliy restricted for foreigners should be opened within this year.
Indonesia, with its approximately 245 million inhabitants, more than 17,000 tropical islands, is an interesting holiday destination, especially the resort island of Bali. But Indonesia can be more than just a tourist hotspot. The country consistently records sound economic growth and the Indonesian markets are booming in many areas.
Foreign investors are welcome, of course. Indonesia provides lucrative business opportunities for innovative start-ups and companies seeking new markets. The market entry into Indonesia, however, is not that easy. Due to the travel and time distance, but also because of the maze of local rules and regulations, setting up a business in Indonesia can cause a lot of headache. Indonesia is a country full of licenses and permits, which does not make it easy for foreigners to establish and operate business.
When I started working with Indonesia in 1997 as a project logistics manager for a big German company, the country was far out of my scope – and I was far from knowing a lot about it.
Keeping busy with handling tons of project equipment, arranging import and customs procedures, and makings sure my job was done, I did not realize, or maybe did not care about, what was going on during that time and what impact it would have to Indonesia’s future and thus, to my career and life.
Indonesian business culture is far different from western style business behavior.
When doing business in Indonesia the difference in cultural and business behavior is one of the biggest challenges for every businessman.
The following article should give you some useful information when interacting with Indonesian Partners and show you some common mistakes westerner’s might make.
I have been doing business in Indonesia for almost 15 years. I have met hundreds of people, discussed thousands of business ideas, projects, and development topics.
I can tell you that one of the keys for a successful venture in Indonesia is finding the right business partner. Doing business in Indonesia is never very easy and a lot of things will cause you some headache, but finding the right business partner will alleviate some of your headaches.