Did you know that Indonesia is one of the countries that allow up to 100% foreign ownership for 35 business sectors? Following this announcement, many foreign companies have taken the chance to make their move to Indonesia to tap on its growing economy.
Setting up a company in Indonesia has become an increasingly common as the government aims to attract foreign investors and entrepreneurships with low corporate tax rates.
Why Foreign Companies Relocate to Indonesia?
There are many reasons why foreign companies relocate to other countries, including Indonesia. These reasons include the following:
Indonesia is regarded as the largest economy in southeast Asia. This allows a faster growth in gross domestic product (GDP) as well as strengthening fiscal conditions. With a thriving economy, registering and conducting business in Indonesia would be advantageous for expanding businesses.
The main goal in business is to maximise profits and one way to do that is by minimising costs. Although relocating a business may be a significant expenditure, operational costs are relatively low in Indonesia.
As compared to other countries, labour is relatively cheap; this also encourages many people to relocate their companies to Indonesia, especially service providers as they would need employees.
Another reason why many relocate their companies to Indonesia is because of the relatively low cost of infrastructure in Indonesia which ultimately also reduces operational costs and makes operations more efficient.
Large Consumer Population and Labour Force
Another factor that makes Indonesia attractive is the large population. Businesses in countries with low populations are forced to deal with the challenges of a small market. Furthermore, if the majority of the population is not of working age, the company will also suffer because hiring employees becomes more difficult due to the lack of ready labour.
Neither of these are a problem in Indonesia, as it has a massive population and workforce.
With the intention to make profits, it is only possible if the country has business opportunities to offer. In Indonesia, there is a large variation of business opportunities in every industry. This bodes well for entrepreneurs who are searching for an environment in which there are many business opportunities which will benefit their ventures.