Doing business in Indonesia offers access to one of the world’s largest emerging markets, supported by a growing economy, abundant natural resources, and a young productive workforce. These advantages have made Indonesia a preferred destination for investors seeking long-term growth opportunities in Southeast Asia.
As the government continues to improve the investment climate through regulatory reforms and business facilitation programs, companies across various industries are finding it easier to establish and expand their presence in the country.
Why Doing Business in Indonesia?
Doing business in Indonesia has become easier throughout the year and that is just one reason to invest in this country. Indonesia is the ideal investment destination for many other reasons including:
1. Economy Growth
In the first quarter of 2021, the economic growth of Indonesia experienced a recorded highest since the fourth quarter of 2004 with a 7.16% growth. This indicates a stable and sound economy. In fact, Indonesia is one of the largest economy in Southeast Asia.
2. Political Stability
Indonesia’s political stability for the last 17 years indicates a good economic situation. These determining factors should be taken into account by investors who consider having business in Indonesia.
3. Investment Climate
The Indonesian government continues to reform the investment climate and regulation to attract more investments to Indonesia.
4. Natural Resources
Indonesia is well known for its abundance in natural resources from natural gas, gold, oil, copper, and amongs others.
5. Demographic
Based on the Central Bureau of Statistics (BPS), Indonesia expects a demographic bonus in 2030-2040. Demographic bonus is defined as the situation where the productive age population outweighs the non productive age population. BPS predicts that the productive age (15-64 years old) population will make up 64% of total population.
6. Domestic Market
Indonesia as the 4th biggest population in the world, which indicates a huge potential for their domestic market.
7. Global Influence
Indonesia has significant influence in its role in global affairs, considering that they are the only member of G20 from Southeast Asia.
Read More: Indonesia OSS RBA Guide for Business Licensing
Reformation of Investment Rules and Regulation
Investors who wish to keep having business in Indonesia or plan to invest in Indonesia will enjoy the improvement within their investment climate committed by the government.
The Investment Coordinating Board (BKPM) has taken strategic steps to keep the flow of investment stable during the pandemic and it will continue to do so in the future. These strategic steps involves:
- Help and facilitate the existing companies to overcome any obstacle they deal with while having business in Indonesia
- Facilitate stalled investment
- Provide incentives to companies that plans on expansion
The government provides incentives to improve human resource quality in Indonesia. The regulation covers three different areas: the labor-intensive industries, industries involved in vocational education programs, and industries that hold research and development activities to produce innovation.
Read More: How to Choose the Best Manufacturing Location for Cost and Efficiency
Those are the reasons to keep doing business in Indonesia and as to why investors may consider investing in Indonesia.
Looking to capitalize on Indonesia’s growing investment opportunities? Subang Smartpolitan provides a strategically located industrial park with integrated infrastructure, helping businesses establish and expand operations in one of Southeast Asia’s most promising markets.
FAQ
1. Why is Indonesia attractive for foreign investment?
Indonesia offers strong economic growth, political stability, abundant natural resources, a large domestic market, and ongoing regulatory reforms that make investing easier for local and foreign businesses.
2. What are the advantages of doing business in Indonesia?
Key advantages include access to Southeast Asia’s largest economy, a growing middle class, competitive labor availability, government incentives, and increasing infrastructure development.
3. Which industries have the biggest investment opportunities in Indonesia?
Manufacturing, renewable energy, logistics, automotive, electronics, consumer goods, digital technology, and downstream processing industries are among the sectors attracting significant investment.
4. How is the Indonesian government supporting investors?
The government continues to improve the investment climate through business licensing reforms, investment incentives, infrastructure development, and digital platforms such as OSS-RBA that simplify business establishment.
5. Why is Indonesia’s demographic bonus important for businesses?
Indonesia’s growing productive-age population provides a large workforce and consumer base, creating long-term opportunities for business expansion and economic growth.