When anyone who plans to start a company anywhere in the world does so, certain costs will be incurred for any of various reasons. Rental costs for the premises to be used will need to be paid, as will utility costs after the business owner moves into those premises. Fees connected to company incorporation, registration for licenses, and other matters related to compliance issues as legally stipulated must be paid in order to avoid falling afoul of the law. Salaries must be paid to employees, while those who seek assistance for corporate secretarial duties must also pay those to whom such duties have been outsourced. Nevertheless, company owners in Indonesia do have certain methods to reduce the cost of starting a company there.


How to Reduce Rental Costs in Indonesia

One of the most important costs incurred by business owners is that of rental. Just as is the case in other countries, certain areas of Indonesia are home to higher rental costs than others. For this reason, many companies operating in Indonesia today tend to set up their business operations base in areas which would cause lower rental costs to be imposed. For example, in past years, many companies in Indonesia were based in the Central Business District (CBD) of the capital city of Jakarta. However, in recent times, rental costs in the CBD have soared. Therefore, this rise in rental costs drove many businesses out of the CBD; they ended up relocating to cities and towns close to Jakarta or to areas of Jakarta in which they would incur lower rental costs. Doing so has allowed many a business owner to save much money.

Outsourcing of Corporate Secretarial Tasks

Every business in Indonesia requires corporate secretarial tasks to be performed. However, such tasks can sometimes be relatively expensive, especially if the company does not choose a person or firm which demands a payment amount that is excessive relative to the tasks which are to be performed. It is also often advisable for business owners to outsource the carrying out of corporate secretarial tasks instead of having them performed by an in-house company secretary. Doing so often allows business owners to save both time and money, thus giving them more opportunities to concentrate on the company’s business activities and thus maximize the profits of the company.

As an aside, we at Paul Hype Page & Co are able to supply your company with the appropriate corporate secretarial services. We will select a capable person who will serve as your company secretary. Through this person’s actions, you can be assured that all of your corporate secretarial needs will be managed in a proper manner.


Corporate Tax Incentives

Certain Indonesian business owners may use specific corporate tax incentives to save tax money and reduce their overall level of expenditure. Business owners which have opted to invest in or expand into industries which are deemed to be either labor-intensive or pioneer industries are eligible for a reduction of up to 60% of their total investments which are tangible fixed assets. There are also tax incentives of up to 200% of all total costs incurred which are granted to business owners who start apprenticeship programs and training activities. Business owners who conduct certain research and development activities, meanwhile, are eligible for tax reductions of up to 300% of all costs incurred.


Costs Which Cannot Be Reduced

Of course, certain costs incurred during the incorporation process must be paid as they are and therefore cannot be reduced. These include the fees related to registrations for licenses, permits, and other legal forms of verification; any costs related to incorporation; salaries to be paid to employees as per the terms of their contract; and all other payments to be made which have a fixed price.