The Telecommunications Industry of Indonesia
Telecommunications is one of the fastest-growing business sectors in Indonesia. Cellular connections are of a relatively high quality across the country, particularly when compared to the respective conditions of fixed wire and special telecommunications connections. According to the latest statistics, the number of cellular accounts in Indonesia exceeds the country’s total population; this fact gives credence to the quality of the country’s cellular connections. Thus, cellular networks form the cornerstone of Indonesia’s telecommunications industry.
Furthermore, the sheer size of Indonesia’s telecommunications market has created opportunities for business owners across the country to gain many benefits. The country is home to the world’s third-largest telecommunications market; it only trails China and India in this statistic. Although competition has increased and profit margins have been reduced in recent years, opportunities for economic growth nevertheless exist in the areas of data services, value-added services, and Internet and smartphone penetration. As the standards of these areas improve across Indonesia while the population and per capita income of the country also increase, the telecommunications sector of Indonesia is expected to continue to grow and prosper.
As the telecommunications market in Indonesia has continued to grow, foreign investors have begun to become more interested in pursuing major business opportunities which exist within Indonesia’s telecommunications sector. Many foreigners have made the decision to establish a telecommunications company in Indonesia. As long as such foreigners strictly adhere to the process of the incorporation of a company in Indonesia including the obtaining of all necessary licenses, there should not be any difficulties faced by any foreigner who is interested in starting a telecommunications company in Indonesia.
How to Form a Telecommunications Business in Indonesia
Before anyone chooses to set up a telecommunications business, there are several actions which must be taken. The first of these actions is that of registration. Any telecommunications business in Indonesia may be registered as any of certain business entities; these include the public company (Perum), the liability company (Persero), the Firma (FA), the Commanditaire Vennotschap (CV), and the limited company which may either be locally-owned (PT) or foreign-owned (PT PMA). Once an appropriate business entity has been selected, it is then a necessity to secure a premise for the use of the business. It is required to gain approval from all authorities involved before doing so. In certain instances, specific licenses and permits are needed before the premise can be used.
On a related note, if you are interested in starting a telecommunications or any other company of any business entity in Indonesia, we at Paul Hype Page & Co are always ready to provide our assistance. Our incorporation team will help you select a suitable business entity, then work with you to ensure that your new business in Indonesia will be established in a suitable and legal manner.
Once the premise for the business is able to be used, it is then necessary to obtain all necessary licenses for the operation of the telecommunications business. One of these is the Investment Registration. The Investment Registration was created by the Indonesian government to replace the Principle License. The Investment Registration’s purpose is to allow its owner to have an opportunity to create and prepare the necessary facilities and equipment before a specified amount of time elapses. The Operational Eligibility Examination must also be completed. This examination is a technical examination which is either conducted by an accredited agency or a team formed by government authorities. It is used to conduct technical and operational examinations. Once this examination has been completed, the License of Conduct (Modern Licensing) will be obtained. The Minister of Communication and Information Technology is in charge of the issuance of this crucial license. This licence is a contract which includes information about the rights, obligations, and sanctions of the business in question. It may be re-assessed every five years. The details specified in the License of Conduct (Modern Licensing) are related to the operational matters of the telecommunications company to be established. These details are related to how the company owner might begin to undertake the telecommunications operations of the company, how the business is expected to develop, payments for right of frequency usage fees as well as those for right of telecommunications operation fees, as well as sanctions to be imposed on the owner of the license if the owner ever violates any of the regulations explicitly specified by the license’s terms and conditions.
Should you require any assistance with the obtaining of any license in Indonesia, we at Paul Hype Page & Co are willing to offer our services. We will contact any authorities on your behalf. After receiving their response, we will use the information gained to allow you to receive your required licenses with as few problems as possible.
Foreign Ownership of an Indonesian Telecommunications Company
Foreign ownership of an Indonesian telecommunications company has certain inherent differences from local ownership of such a company. Certain restrictions apply to foreign owners of telecommunications companies which are entering the market for telecommunication networks or services in Indonesia. There are several methods through which a foreign business owner in Indonesia may enter the telecommunications market in the country. Any foreign business owner who intends to start a telecommunications business in Indonesia may either acquire shares of an existing telecommunications operator based in Indonesia or establishing a new company by entering into a joint venture with local business owners.
However, if a foreign business owner intends to acquire the shares of an existing telecommunications operator, this share ownership will be subject to limitations which are determined by the government of Indonesia. These restrictions are specified in the Negative Investment List, a list created by the government in order to prevent the Indonesian economy from becoming oversaturated by businesses started by foreigners.
Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.
Paul Hype Page & Co. have 3 physical offices in Singapore, Malaysia and Indonesia
Our Firm Goal is to assist Foreigner and Foreign Companies to set up business in Asean.
How we can help you:
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Step 1- Listen to your Business plan and Relocation needs.
Step 2- Analysis your Tax Planning
Step 3- Recommend the most suited type of Company Incorporation, Open Bank account and Work Visa
Step 4- Arrange for your Spouse and Children Visa
Step 5- Assist as your company to hire staffs and handle all HR matters
Step 6- Every financial year end, we assist you with your yearly OSS Finanical and Tax Complianc
Step 7- Assist you to expand business to Malaysia, Indonesia, Vietnam and Thailand.
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