5 Things to Know Before You Open Company in Indonesia

Not only the paradise for a holiday, but Indonesia can also be a heaven for the foreign investor. This is due to the excellent business climate inside it, very welcomed people, and the significant number of population. There are many business types that you can open in Indonesia, and you can also get the considerable profit with them.

But, before being successful in open company in Indonesia, you have to understand what you have to do and what you deal up within that business. If you are lack of information, there is a considerable chance that you will get a significant loss. So, here are the things that you shall know before you open company in Indonesia:

Understanding the business license

After you have done with the incorporation process (that might take time around 6-8 weeks), you will get the principal license to open company in Indonesia. The principle license is only valid for three years. Before it is expired, you have to renew it into the permanent business license. After the incorporation process (to get the principle license) you have time about 1-3 years to gain your permanent business license.

The ‘war’ against corruption

As a businessman, you understand that sometimes there is the speed-up fee that you can pay to some people. This is illegal, but some businessmen tend to do it to simplify all the stuff and to get such privileges. However, don’t try to do it in Indonesia this day. Because the government is really keeping an eye on this thing. Not to mention the hard work of The Corruption Eradication Commission (KPK) to fight against corruption. So, never do illegal things just to speed up your business, or you will find the big trouble in this country.

The minimum paid-up capital and investment

As a foreign investor, there is the minimum number of paid-up capital and investment for you. The Investment Coordinating Board has required the minimum investment number of 10 billion rupiahs. For the minimum paid-up capital, the foreign investor must have minimum 2.5 billion rupiahs, and that doesn’t include the land.

The limitation of business for PT PMA

The gambling business, for example, is actually prohibited in Indonesia, both for the local and foreign investor. But, there are some business that is allowed for the local investors, and restricted and may be prohibited for the foreign investor. The regulation is made by the government to protect and to enhance the role of the local investor in Indonesia. You can see the update of the limitation by examining the Negative Investment List issued by BKPM.

Understanding the local culture

Open business in Indonesia means to understand the culture of it. You don’t have to be fluent in Indonesian, but you have to know what things that attract the Indonesian people, and other things that might be sensitive issues for them. Always try to learn the culture of the people, and understand how to advertise well and to keep your company image in Indonesia. Because, once your company has a bad image in front of Indonesia people, there is only a little chance that you can be successful in your business.

As long as you understand your needs to open company in Indonesia, actually you will find that to do it is not as complicated as you think. Always follow the rule and understand what you want to do with that business.