Difficulties Doing business in Indonesia – is not as easy at it sounds, especially setting up the foundation of the business. Even-though Indonesia has a lot of natural and human resources but still, sometimes the foreigners find it difficult to figure out how to start the business here. That is why obtaining local assistance can be well worthwhile.
Some of the reasons why they find it difficult are because;
1. Complicated Government Regulations
To register your business in Indonesia, you have to pass through so many licenses until your company can be successfully registered here. But, the Indonesia government has a lot of regulations that always change from time to time. Sometimes, because of this dynamic regulation in Indonesia, it slows down the process of establishing a company in this country.
2. Ownership Limitation
Not all foreign investment in Indonesia can be owned 100% by them. The government in Indonesia already categorized which sectors can be owned 100% by foreigners which one is not. It sometimes causes them a little bit hassle and uncertain with which category is suitable for their business type.
This investment category is called the Negative Investment List (DNI). It listed several categories from Closed to Investments, Reserved for Small and Medium Enterprises (SME), Through Partnership with SMEs, Limited Foreign Capital Ownership, Defined Location, Required a Special License, 100% Domestic Capital, and Foreign Capital Ownership.
3. Uncertain Economic Condition
Based on Bank Indonesia Press Release : BI 7-Day Reverse Repo Rate Held at 6,00%: Strengthening External Stability, Promoting Economic Growth Momentum, global economic moderation has fed through to lower economic growth in Indonesia than previously expected. Indonesia’s economy grew 5.07% (yoy) in the first quarter of 2019, down from 5.18% (yoy) in the previous period yet up compared with the 5.06% (yoy) recorded in the first quarter of 2018. Global economic moderation and sliding commodity prices have weighed down export growth in Indonesia, thus leading to slower household consumption and non-building investment. Moreover, the effect of election spending on consumption was not as significant as initially predicted.
The uncertain economic stability in Indonesia may damage the foreigner’s investment or business in this country. Some maybe already invested their money in Indonesia, but then just because of this uncertainty, they put a high risk of losing what they have invested.
4. High Cost of Importing Goods
To import goods in Indonesia is not easy, even for sending the sample of your goods before you start to open your business in this country can cost you millions rupiah. In some cases, you have to register your goods first in the relevant authorities and either it will be difficult or takes you ages until you can import them to Indonesia because it has to follow a long bureaucratic process first.
Therefore, the assistance from us might be very helpful for you to ease away the confusion of starting your business in Indonesia.