Constant Economic Growth
Indonesia’s economy has registered positive growth rates in every quarter of the last two decades. On average, the country’s economy grows by approximately 5% every year. The highest economic growth rate ever recorded in Indonesia took place in the fourth quarter of 2004, when it grew by over 7%. This frequent economic growth also means that businesses across the country have experienced an increase in the number of potential customers. This is because the country’s constant economic growth has caused more people than ever before to have larger amounts of disposable income. This in turn would make them more inclined to spend more money, and some of this money could easily be spent at a business owned by a foreigner. Thus, foreigners who are aware of the opportunities presented by the economic growth of Indonesia should take the chances that present themselves and thus begin to set up a business there.
Reasonable Corporate Tax Rates
Foreigners who have chosen to set up a business in Indonesia will benefit from the fact that by global standards, corporate tax rates in Indonesia are relatively reasonable. The current corporate tax rate in Indonesia is 25%. This figure represents a reduction from the previous rate of 28%. This rate of 25% has been in effect since 2010. When this rate is compared to those of other countries in the Asia-Pacific region, it can be seen that the corporate tax rate is fairly similar to or lower than those of such countries. Furthermore, the Indonesian government also offers specific tax exemptions and deductions which may apply in certain circumstances. Foreign business owners who are taxpayers in Indonesia may use such exemptions and deductions for their benefit and thus further reduce their overall corporate tax bill.
Just as is the case anywhere else in the world, tax issues in Indonesia can sometimes be complex matters. Taxpayers in Indonesia might not possess a complete understanding of every important detail related to taxation in Indonesia as well as the specific information regarding the taxes which they are required to pay. This is where we at Paul Hype Page & Co come in. Our knowledgeable and skilled tax experts will provide the best of our services in order to ensure that you understand everything you must know about taxation in Indonesia. We will even work with you to find ways in which you could possibly reduce your tax bill to as low a level as possible while remaining within legal boundaries.
Openness to Foreigners
The business environment in Indonesia is one which generally welcomes the entry of foreign-owned businesses. This is because the government of Indonesia recognizes the value that such businesses owned by foreigners can bring to the population and economy of Indonesia. For this reason, the government of Indonesia openly encourages foreigners from all parts of the world to come to Indonesia to establish a business and thus contribute to the economic success of the country. As long as the business has been established in a lawful manner and does not infringe on the rights of anyone else, foreigners who start a business in Indonesia will not find it difficult to accustom themselves to the business atmosphere in Indonesia; indeed, they will find it very accommodating.
However, it also ought to be mentioned that all foreigners who start a foreign-owned business in Indonesia must abide by the stipulations specified in the Negative Investment List. The Negative Investment List has been enforced since 2016. It specifies which business fields in Indonesia have restrictions with regard to foreign ownership and investment. The Negative Investment List mentions specific business fields in sectors such as agriculture, forestry, fishery, marine affairs, industry, public works, transportation, finance, and health. Nevertheless, it is not difficult to abide by the stipulations stated in the Negative Investment List. By carefully working with the authorities as well as locals who are also involved with the company to be established, the foreign company owner will still be able to reap the rich rewards of company ownership in Indonesia while at the same time being compliant with the Negative Investment List.
Any foreigner who is considering starting a business in another country ought to consider doing so in Indonesia. The country offers business owners, whether local or foreign, rare benefits which not many other countries in the world are able to provide. Indonesia’s immense population, burgeoning economy, and willingness to accept foreign input mark it out as a unique and viable location in which any enterprising and forward-thinking foreign business owner could establish a business and subsequently chart a path towards corporate success.