with a population of nearly 240 million people, with more than 17,000 islands, and with an important political and economic center in Southeast Asia, Indonesia plays an increasingly important in the global economy. Consequently, not only is Indonesia obvious interest to foreign investors, but it also arouses excitement in foreigners wishing to come to the archipelagic state to enjoy its beauty and culture while building their business in a growing market.
is outside the scope of this article to cover all aspects of doing business in Indonesia, however, serve as a guide in terms of where to look for information and what to look for. In addition, there will be a further analysis of the corporate structure options available for foreigners in Indonesia.
According to "Doing Business 2013: Indonesia", the country is ranked 165th out of 185 economies on the ease of starting a business In comparison, China ranked 151th and Malaysia. 54th.
This means that if the market is tempting, it should be well analyzed and studied by foreigners who wish to do business in Indonesia.
After selecting a location and appropriate market foreign investors should consider the following issues from a legal perspective: dealing with construction permits, employing workers, registering property, getting credit, protecting investors, paying taxes, trading border and enforcing contracts.
the concerns mentioned above are especially important to consider if it intends to open a local office. the common structures established by foreign desks of representation, a regional representative office, or joint venture Foreign venture.
If a foreigner wants to sell products or services without the need to be present in Indonesia, options include the appointment of an agent or distributor.
A representative office (RO) provides the legal presence in Indonesia and is cheaper and easier to build. However, DS usually make promotion or gather information activities because they are not authorized to conduct business or negotiation of operational activities, such as receiving payment of sales in Indonesia. BR are primarily set up for marketing purposes, market research, buying or selling agents, the company brand monitoring, and stay in close contact with distributors and customers.
Regional Representative Office (RRO) is usually set up by a multinational company to manage its operation. It is limited to the use of two expatriates who can coordinate and monitor the area of management.
Foreign Joint Venture companies (LDCs) should always take the form of a limited liability business (PT) and may involve legal entities (companies) or individuals. Any company holding a percentage of foreign participation is a partnership of LDCs. A joint venture can be established with 100% foreign ownership; However, within 15 years, the company has to sell (some) shares to Indonesian investors by investing directly or indirectly through the national stock exchange.
Most investment projects must be approved by the Investment Coordinating Board in Indonesia (BKPM) and commercial licenses that are officially granted for 30 years now remain valid as long as the operations occur.
The amount of capital to invest in a foreign company is decided by the parties themselves, and approval from BKPM is based on the scale and economics of the project.
The things that are considered sensitive for foreign investors include: find a good lawyer, the Travel understanding of business visa, ensuring that intellectual property rights are protected, understanding of taxation and tax incentives, ensuring that the company follows through accounting and auditing requirements, good use of both expatriate and local employees, repatriation of profits, and meeting the obligations of corporate social responsibility, among others.
It is recommended that anyone with an interest in doing business in Indonesia downloads an economic profile provided by the World Bank. It includes detailed information on starting a business in Indonesia, the economic environment of the country, the details of the laws and regulations applicable to foreign companies, the establishment of procedures and development, and how to treat concerns.
This is where you can find this clear and complete information http://www.doingbusiness.org/data/exploreeconomies/indonesia. You can download the free economic profile.
In addition, http://www.nzte.govt.nz/explore-export-markets is also a great site to understand the business environment in Indonesia.
(Everything written in this article is intended to provide information only and is not intended for legal advice).