PKF Hadiwinata – Public Accounting Firm Based in Jakarta, Indonesia

Chartered Accountants & Business Advisers

Drs. Paul Hadiwinata, Hidajat, Arsono, Retno, Palilingan & Rekan

Publication

How To Do Business in Indonesia

borobudurWith more than 210 million inhabitants, Indonesia is the 5th most populous country in the world  and  is  among  the most culturally  rich  countries  on  earth. Indonesia has  more than 300 ethnic with some 250 distinct languages and dialects throughout the nation. Despite of  these  differences,  however,  Bahasa  Indonesia  has  been  adopted  as  the  national language  as  well  as  the  language  of  unity  which  is  spoken  by  almost  everyone.  English is  generally  spoken  by  businessmen,  government  officials,  and  foreign  graduates.  For the  last  ten  years,  Chinese  or  Mandarin  language  has  been  commonly  used  and  has become  advantage  for  businessmen  doing  business  with  China.  As  economic development  and  modern  education  spread  throughout  the  country,  the  ethnic  and regional differences are being diluted.

Advantages of investing in Indonesia

Following  the  experience  of  economic  and  financial  crisis  in  1997,  the  government  of Indonesia recognized that foreign investments have important role in order to reconstruct the  Indonesian  economy.  During  the  following  years,  the  successive  government enacted  legal  and  regulatory  reforms  which  were  designed  to  make  Indonesia  an attractive and competitive destination for foreign investments.

ed-indonesian heritageIndonesia  has  increased  domestic  consumption  and  investment  which  should compensate  for  a  global  slow  down  in  export  growth  to  increase  economic  growth  from 6.3  per  cent  in  2003  to  6.4  per  cent  in  2008.  This  should  continue  to  attract  foreign investment  and  support  the  focus  on  increased  infrastructure  spending  and  improving the  investment  climate.  Indonesia’s  developing  economy  has  been  largely  based  upon primary  industries  notably  agriculture  and  natural  resources  such  as  oil  and  gas, minerals and forestry. The exploitation of natural resources is the most important source of  taxation  revenues  and  foreign  exchange  for  Indonesia.  In  order  to  reduce  its  relative reliance  on  oil  and  gas  related  revenue  and  therefore  its  susceptibility  to  fluctuations  in the world demand for oil and gas, the government is encouraging growth and investment in areas such as manufacturing and the exploitation of other natural resources.

The  Government  also  recognizes  the  need  for  foreign  investment  in  order  to  assist  the continuing  development  of  the  economy.  The  government  is  particularly  interested  in foreign  investment  in  areas  where  capital,  advanced  technology  and  management  skills are  not  readily  available  internally  and  in  areas  where  investment  will  increase  export earning and transfer technology to Indonesians.

For further information please visit  PKF Publications – Doing Business in Indonesia