As the largest economy in Southeast Asia, you don’t have to worry when you are planning to set up your business in Indonesia. That is because there is a wealth of opportunities for businesses here if you are looking to expand or start fresh.
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Key Considerations When Establishing Your Business
- Market Research
You first need to do your homework by conducting market research. Note that Indonesia has a large, diverse consumer base that is spread across the islands. They focus on sectors that are booming, particularly agriculture, e-commerce, manufacturing, and tourism, as well as renewable energy.
2. Regulatory Framework
You need to get familiar with the Omnibus Law on Job Creation that governs the business regulations in Indonesia. This may have simplified procedures to follow, but there are still nuances for foreign investors. In fact, some sectors are restricted or may require partnerships with local entities.
3. Cultural Awareness
You have to know that business practices in the country are driven by relationships. So, this emphasises on the trust and personal connections. You can also expect that local culture will value patience and respect in negotiations.
4. Labour Laws
You can take advantage of the workforce of the country because they are young and dynamic. But, you have to abide by the labour laws that mandate minimum wages, social security, and severance pay if you are planning to hire a local workforce.
Thriving in the Economy of Indonesia
One of the factors that can help your business thrive in the local economy is to collaborate with local firms or distributors. This will enable you to navigate the regulations and cultural barriers. That said, you have to customise your offerings of products or services to meet the local taste, languages, and preferences.
The use of digital platforms is also an advantageous strategy if you want to make sense in the growing internet-savvy population. Part of this strategy is to engage in e-commerce and digital marketing. Furthermore, you can explore some incentives provided by the government for certain industries. So, find out how your business can benefit from this initiative by the government.
You may also join local business associations and chambers of commerce if you want to establish relationships and gain market insights. In addition to that, you can engage in community-building activities to build trust and enhance brand reputation.
Setting Up Your Business
You can choose a business entity as a foreign investor. For a foreign-owned company, it allows foreign ownership but requires compliance with capital requirements. The representative office is also ideal for market research and promotions without direct operations.
Moreover, you need to register your business with authorities only. Thus, you need to obtain the necessary licenses from the Investment Coordinating Board and other government bodies. You also need to secure a taxpayer identification number. More importantly, you have to meet the capital requirements, which depend on the sector your business is registered to.
You can get in touch with us and find out how potential businesses can expand or start fresh with help from professional corporate services that Acclime can provide.
