Shipping companies serve as companies which connect businesses all over the world, especially if the products involved are bulky. In Indonesia, water transport is the predominant means of transport because two-thirds of its territory is surrounded by water. The country serves as a transport hub for Southeast Asian countries and therefore receives large volumes of shipment on a daily basis. The shipping industry is protected by a list of restrictions imposed by the Indonesian government. While these restrictions are intended to protect local businesses in the Indonesian maritime industry, they also provide opportunities for foreigners to enter the Indonesian shipping business.
Why One Should Start a Shipping Company in Indonesia
According to the latest statistics, the shipping companies of Indonesia contributed approximately 11% of the country’s GDP, a figure which is generally increasing. This rate of growth presents prospective business owners with an opportunity to undertake business activities in the shipping industry in the anticipation that the market conditions will improve. In its attempts to facilitate the growth of the industry, the Indonesian government has initiated many port development activities in its major ports in order to improve freight handling as well as the time taken to clear out goods from ports.
Indonesia is set to become an important country in the world’s maritime industry. This fact is evidenced by the heavy investment which has been given to the shipping industry. This capacity for economic growth has done much to facilitate the transport of goods across ports as well as all ship-building activities which take place in Indonesia. Furthermore, the Indonesian government’s restriction of foreign companies’ involvement in ship-building activities has created an incentive for locals to enter market. In its attempt to improve the investment climate related to shipping in Indonesia, the Indonesian government has been reviewing its level of control over the shipping industry. Such controls have also done much to create favorable investment opportunities in the shipping industries of other countries which are located in Southeast Asia.
Information About Starting a Shipping Company in Indonesia
Indonesia’s shipping laws allow for complete local ownership of shipping companies. However, any foreigner who is interested in starting a shipping company is only allowed to own up to 49% of the shares of the company. The reason for this is to retain as much local control over shipping companies as possible in order to secure local investments. The same laws apply to shipping companies which operate within the oil, gas, and coal sectors. Although foreigners are permitted to undertake oil and gas exploration, they are required to explicitly use local shipping vessels in moving their products unless stated otherwise while doing so. In summary, the Indonesian shipping laws are focused on promoting local growth by establishing and implementing restrictions which are imposed on all foreigners who enter the industry.
Before any foreigner may start a shipping company in Indonesia, the government requires a foreigner to partner with a local firm when seeking opportunities in the shipping industry. Foreign vessels are banned from participating in local transportation of both goods and people. However, in high-value industries like oil and gas, the Indonesian government allows an increased degree of foreign participation. Starting a shipping company in Indonesia as a foreigner requires the foreigner to register and incorporate a company by following the regulations stipulated by Indonesia’s company laws.
Investors from other Southeast Asian countries, however, are allowed to actively participate in shipping ventures by owning not more than 70% of the shares in public limited liability shipping companies. Although other sectors of the Indonesian economy provide flexible ownership schemes for foreign seeking entry into the Indonesian economy, the Indonesian government restricts nominee ownership of shipping companies. The only legal way to start a shipping company in Indonesia is by starting a company which uses the share distribution schemes stipulated by the shipping laws.
Should you have developed an interest in starting a shipping or any other company in Indonesia, we at Paul Hype Page & Co will be willing to serve any needs which you might have. By working with our incorporation team, your Indonesia-based company will be established with as few problems as possible because we have a wealth of knowledge and experience pertaining to the registration and incorporation of any company in Indonesia.