Expats doing business in Indonesia? Check Out These Tips To Get Started

With burgeoning domestic spending, Indonesia is a good place to start your business for everyone. Read on to find out how to start a business in Indonesia.
Expat Business in Indonesia
Diversity team in business development meeting with charts, Indian CEO and Caucasian executive crunching numbers, charts and figures on the desk

RumahCom – The Indonesian economy is known for its domestic spending strength, which allows for continuous growth even amidst the struggling global economy. Combined with the wealth of natural resources and abundance of talent, Indonesia is a thriving market to start a business in. Expatriates doing business in Indonesia sometimes are discouraged because of the bureaucracy involved, but fear not! This article will help you to kickstart your venture.

Step One: Know the Type of Businesses You Can Start

Before you start a business in Indonesia, you need to know the types of business you are allowed to start. Luckily, President Joko “Jokowi” Widodo’s administration has eased the business whitelist, making your business options now more diverse than ever. The Indonesian government used to keep a long blacklist of businesses that expats can’t enter to protect local businesses. However, in 2020, the blacklist was changed to whitelists. Most business types are allowed, except for micro, small, and medium enterprises (MSMEs) and businesses that violate Indonesian law, such as businesses related to illegal drugs and armor.

Step Two: Know the Legal Process

After deciding the business you want to start, you should know the legal processes. Some businesses require you to partner with an Indonesian, such as owning a hotel with less than three stars or owning a business with capital less than IDR2.5 billion. If you already have a partner in mind, great! You can move on to the next step.

The next step is to establish a legal ground so that your business is recognized. Usually, a business will need to be registered as Perseroan Terbatas (PT, or Limited Liability Company). A PT (Limited Liability Company) can be registered with the help of a business consulting company or a notary. This article explains in detail, how to start a PT and what you need to prepare beforehand.

Step Three: Avoid Pitfalls

Settled your legal requirements? Great! Now, you can start planning for your business. Research has shown that a lot of businesses fail in their early years due to inadequate planning. Therefore, you need to have a solid business plan to survive. Initially, you need to at least secure your capital, choose a place, and prepare working permits for your employees if you plan to hire another expat. A working permit in the form of KITAS is needed for you and your employees while staying in Indonesia to avoid deportation.

Choosing a place for your business is also important, as a strategic place will allow your business to flourish. Generally, your desired building should be classified as suitable for business in its IMB (Izin Mendirikan Bangunan, or Building Permit). Check the article on one of the commercial buildings here.

After your business is running, you should also remember that Indonesia is a growing company with its own growing pains and one of them is the ever-changing business regulation. An article you read yesterday might not be applicable tomorrow, so you also need to be agile in your research and avoid overplanning your business to allow it to survive. If you are used to a certain timeframe when starting a business in developed economies, it is recommended that you have a flexible timeline for your Indonesian business as things are different here.

The most important thing is you to start a business in Indonesia. A lot of expats are enticed to commence a business in Indonesia because of the economic situation, but packed-up after seeing the complexity of bureaucracy and business situation after arriving here. Remember that the most important thing in business is to seize the opportunity by just taking the first step to start.

Successful Expat Businesses in Indonesia

Bali is one of the favourite places for expats to start or expand their business. Bali is well-known due to its indigenous culture and diversity of people residing there. Moreover, Bali is also chosen as a favourite tourist destination both by locals and foreign people, making this island the right place to establish a business.

Bali Brides is one of the most successful bridal specialists in Bali. Started and operated by Australians who fell in love with Bali’s beautiful culture, they offer wedding packages for locals and foreigners who choose to get married in Bali. Their recommendations are personalised and they could work with any type of wedding, from a small reception to grand ones.

Another successful business run by Australians in Indonesia is Bali Villa Escapes, which offers hand-picked luxury accommodation in Bali. Visitors could choose between hundreds of available villas in various region of Bali, and get discounted rates if they enquire through the website. If you are interested to rent a villa in Bali for your next trip, you can visit Bali Vila Escapes.

Located about 90-minute cruising on a ship to the east from Bali island, Sumba island displays landscape that is as magnificent as Bali. The island attracts world tourists’ attraction for its unique wildlife and stunning natural beauty. Also, the magnificent beach landscape, with white sand and crystal-clear bluish ocean have been simply the key factors in the increasing number of tourists to the island.

On the island, an entrepreneur expat Chris Burch established a five-star hotel called Nihi Sumba. Located in Hobawawi Village, Wanukaka District, Sumba, the hotel is set on a deserted stretch of private, gold-sand beach backed by raw, tropical jungle. Its remote location, surrounded by ‘wildness’ is worth the travel. Built-up with traditional grass-thatched roofs, teak wood, and local artwork, the hotel character and building style reflect the traditional Sumba culture and architecture. The hotel also provides various adventurous activities, such as “safari spa” that allows the visitors to wander off the nature of Sumba island. Thanks to these irreplaceable holiday experiences, the hotel was nominated as the best number 1 hotel from World’s Best Travel Awards 2016.

Apart from Bali and Sumba, let us never skip Jakarta. As the nation’s capital and the biggest business and industrial center in Indonesia, Jakarta boasts a diverse range of places where expats can very possibly own a business. Blok M is a home for Japanese expats. The existence of Japanese expats residing in this area makes Blok M called a “Little Tokyo”. The history began when Aldiron House in Blok M was used to be a guest house for Japanese expats. Various businesses like restaurants, clubs, karaoke, spa, and supermarket started to open to meet the needs of Japanese expats. The businesses were also owned by either Indonesians or Japanese.

Among many Japanese restaurants in Blok M, Daitokyo Sakaba has attracted the crowd with its tantalizing Japanese authentic food. Besides ramen, kaarage, and sushi, the restaurant offers its specialty dish called gyutan don or a bowl of rice topped with remarkably enticing four slices of beef tongue. The restaurant’s ambiance brings our memory to the authentic Japanese house thanks to the brownish wooden interior in all parts of the restaurant.

Another interesting Japanese restaurant is Kashiwa which carries the concept of izakaya (sake bar). Like many other Japanese restaurants in Blok M, Kashiwa is decorated with mostly wooden interior and slightly dim lighting. Not only the dining table, the restaurant also provides an area where customers can have a meal while sitting cross-legged or originally known as Seiza in Japanese tradition. Kashiwa also offers various comics and Japanese magazines that you can enjoy while eating. The menu offers various authentic Japanese dishes, such as onigiri, sashimi, and tempura. According to the concept, this Japanese restaurant provides suitable food to accompany alcoholic drinks. However, despite the alcoholic drinks, all food served is all halal.

We hope that our article will help you to kickstart your business in Indonesia.

Looking to move to Indonesia and find a home? We can help. Check our rental listings here.

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