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How to Ensure the Success of an Indonesian Business

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How to Ensure the Success of an Indonesian Business

2020-10-12T18:01:40+08:00November 6th, 2019|0 Comments

Every business owner in Indonesia would like to know more about the ways in which they are most likely to obtain business success. Although there are many routes to the success of a business in Indonesia, all have certain commonalities which will be discussed in this article.

Success of an Indonesian Business

 

Everyone who chooses to start a business in Indonesia believes that doing so will set them on the path towards corporate success. They might assume that once their company has been officially incorporated, the success of their business would immediately follow. However, those who make this assumption are incorrect. Just as is the case anywhere else in the world, there are certain actions which could and should be taken by any business owner in Indonesia in order to ensure the success of the business which they would run. Certain actions would set the company up for failure, but others would set it up for success. Therefore, it is important for every business owner in Indonesia to understand which actions would cause their business to achieve the best possible results and operate at its optimal level.

 

Entering an Appropriate Business Field

In every country, certain business fields are more commercially viable options than others. These fields have more opportunities for investment, are primed for much future growth, are very open to the entry of new businesses, may be ready to be enhanced through the innovations of a new business, or a combination of more than one of the preceding factors. Indonesia is no different in this regard. Although the country’s economy is diverse and readily accepts contributions made by businesses in any field, certain sectors make more significant contributions than others. One such field is the shipping and maritime industry. The shipping industry is important to Indonesia because the country is comprised of thousands of islands. Therefore, the transportation of goods and other products is often done by sea. This is because the cost of transporting such goods by sea is much lower than the cost of transporting those same goods by land or air. Furthermore, the government of Indonesia provides much support to all who choose to start a business in the shipping and maritime industry. It provides funding for projects such as ocean shipping, the construction of ports and terminals, and shipbuilding. For these reasons, the market for shipping-related activities in Indonesia is always open to further entry of new businesses as well as additional investment. The country benefits and will continue to benefit from the business activities of this crucial industry.

Manufacturing is another business field which is a viable option for those who plan to start a business in Indonesia. It makes a larger contribution to the growth of Indonesia’s gross domestic product (GDP) than does any other sector. For almost 50 years, manufacturing has served as one of the key pillars of Indonesia’s impressive economic growth rates. The revenue which it has brought to the country has in turn been used to invest in mechanisms which further boost the economic development of Indonesia. The Indonesian government also recognizes this fact and therefore has provided support for this sector with regard to licenses, incentives, tax exemptions, and permits. Therefore, those who plan to start a business in Indonesia should consider doing so in the manufacturing sector.

The mining and energy industry is another major contributor to the economic well-being and GDP growth of Indonesia. Indonesia is replete with reserves of minerals and coal. It is the world’s fifth-largest producer of coal. In 2019, it is expected to produce 461 million tons of coal. Energy businesses are also set to be in good shape because the demand for electricity across Indonesia is expected to increase by approximately 8.3% every year until 2026. The government has also relaxed regulations imposed on businesses in this sector. It also has provided mining and energy businesses with certain tax incentives and has also simplified the process of obtaining certain licenses and permits. Thus, the mining and energy industry is also an excellent option for anyone who plans to start a business in Indonesia.

Each of the business fields which have been mentioned benefit from various tax incentives. If you would like to find out more ways by which your own corporate tax burden could be eased, we at Paul Hype Page & Co can be of assistance to you. Our tax specialists will see to it that your tax bill is reduced to as low a level as possible while still remaining compliant with the tax laws of Indonesia.

Thinking of incorporating in Indonesia? Let’s get started.

E A S I E R • F A S T E R • B E T T E R

 

Catering to the Indonesian Market

Those who start a business in any country need to tailor their products or services to best suit the demands of the people living in that country. Therefore, the business owners who are best able to fulfill the desires of their target market in Indonesia will find that their business will be very successful. One way in which they may do so is through savvy use of social media. There are over 70 million social media users in Indonesia. Therefore, those who are able to market their business and products in an optimal way via social media will garner many benefits because of the large market to which they will have unlocked.

On a related note, many of Indonesia’s Internet users are impressed by well-crafted and unique videos. The creative use of videos can take a business’s advertising and marketing approach to new heights and thus allow it to draw in many more customers than ever before. 1CAK, one of Indonesia’s leading video websites, receives millions of views every month. Indonesian Internet users are also very active on YouTube. Therefore, the use of videos is one of the best ways by which a business owner could cater to the Indonesian market.

The selection of a suitable agent or distributor is also extremely important when attempting to serve the business’s target audience in Indonesia. An agent or distributor who has much understanding about the local market will be able to tailor a business’s approach to suit the market when providing its assistance in product or service delivery or in the development of projects. The existing track record of providers, agents, and distributors may even be able to convince government authorities that the projects on which they are working are deserving of a government tender. These government tenders can subsequently be used by the business to help it market itself and reach more people across Indonesia. Thus, it is crucial for business owners to work with agents and distributors who are suitably able and qualified with regard to all of the business needs of the business in question.

 

Complying with All Legal Matters

Of course, it should go without saying that legal compliance is crucial to the success of any business in Indonesia. Legal compliance is related such matters as taxation, licenses, permits, and business laws. There are also regulations which must be followed during the process of starting a business in Indonesia; the nature of these regulations is entirely dependent on the business entity selected by its owner. Government authorities such as the Indonesian Investment Coordinating Board (BKPM) and the Financial Services Authority (OJK) are in charge of enforcing some of the legislation which is linked to businesses in Indonesia. Business owners who are foreigners and choose to start a foreign-owned limited company (PMA) will also have to abide by the stipulations specified in the Negative Investment List. The Negative Investment List was created by the Indonesian government as a means of protecting the interests of Indonesian businesses and business owners.

If you need any assistance with the settling of any of your business’s legal compliance matters, feel free to contact us at Paul Hype Page & Co. Whether the issues experienced by your business are linked to licenses, taxation, or any other legal matters, our team will help you overcome the problem and solve it in a legal and suitable manner.

Businesses which are not legally compliant will find themselves subject to any of various punitive consequences. Depending on the severity and impact of the offense committed, punishments may include one or a combination of fines, imprisonment, removal of offenders from their position, or even forced closure of the business. Thus, compliance with all legal matters in Indonesia is utterly crucial.

 

Conclusion

There are many steps which could possibly be taken by business owners in Indonesia in order to ensure future business success. The Indonesian market is a large and diverse one, so there are many ways by which a business owner could achieve this success. As long as the business owner always prioritizes the desires of customers and ensures that the business is run in the proper manner, achieving success as a business owner in Indonesia will not be a difficult task.

How to Ensure the Success of an Indonesian Business FAQs

What are the functions of the OJK?2020-04-02T15:00:05+08:00

The Financial Services Authority (OJK) is a government agency of Indonesia which was created in 2011. It oversees the financial institutions and capital market of the country. It also protects customers of the financial services industry by investigating financial crimes. There are 22 different banks in Indonesia which are listed by the OJK as registered members.

Which business fields are least conducive to business success in Indonesia ?2020-04-02T14:59:24+08:00

Two of the sectors which have not been performing well in Indonesia and are therefore not conducive to business success are the oil and gas sector as well as the medical services sector. Oil production in Indonesia has been steadily declining over recent years. Meanwhile, those in the medical services sector will find it difficult to hire employees because of the relative lack of qualified practitioners in the country.

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