Bureaucracy and Complexity of Law
You must underline that the bureaucracy in Indonesia is unique, it can overwhelm any foreigner who is new to the regulation. Even though the government has started to implement several online systems and One-Stop-Service services to simplify the bureaucracy, there are still some complex processes to go through
On the other hand, policies or laws that are often inconsistent and changing. So, you need to realize that knowing the latest regulations is important.
Uneven infrastructure development
Development in Indonesia has long been focused on the island of Java (6 Provinces: The Capital City of Jakarta, Banten, West Java, Central Java, the Special Region of Yogyakarta and East Java).
All infrastructure and facilities are extremely focused on this island. Therefore, doing business in Indonesia, especially in these 6 provinces in the center of the Java archipelago has been a trend for a long time.
However, there are also several other big cities on other islands that are targeted by foreign investors. Of all the things that you need to consider, the main thing is to find a place that fits your business so that it has great potential to support your company.
Lots of Natural Resources and Raw Materials
Indonesia has many types of natural resources that are abundant and diverse. If you need natural resources and raw materials to run your business, make sure you know where to get these natural resources and raw materials properly. Consider carefully and know that Indonesia consists of islands that are widely spread over a large area, distribution of goods can be expensive if you choose the wrong place.
Apart from the business sector, many foreign companies hope to run a profitable business with the rapidly developing economic conditions. You may be wondering what business entity you can choose in doing business in Indonesia legally.
What type of company is most suitable for your business?
If you have seen the potential in this archipelagic country and started to consider getting into the business sector, you should know what types of investment you can make in Indonesia. First, you can open a representative office or make a foreign direct investment company (PMA). You need to know that some business fields are limited to foreign ownership, so you can only build Local Nominees.
Local Nominee / Local Company
A Local Nominee is basically a local company owned by local (Indonesian) people. However, you, as a foreigner, can have a lot of control over the company. This is a good solution for foreign investors, especially when dealing with businesses that are listed on the Negative Investment List.
Representative office
A representative office is basically built for a specific purpose, such as promotion, marketing, buying, and selling agents, or market research. As a representative office, you will get an operational license for the public for 2 years.
