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Indonesia Country Profile

Recommendations:

Indonesia is a populous, resource rich country that generally has trouble attracting foreign investors due to a challenging regulatory environment and widespread corruption. The Indonesian government’s ongoing reform initiatives have the potential to make the country more attractive to foreign investors   **Good for investors looking for a large base of consumers and workers, with tolerance for short term risk and complexity.**

(+) World’s fourth largest country, with a youthful, increasingly wealthy population
(+) Commodity and resource rich
(+) Consistent economic growth over 20 years
(-) Pace of reform is slow; remains challenging to open and operate a business
(-) Corruption is common, although this is improving
(-) Human capital is lower than in other Asian states

Highlights:

– Largest economy in Southeast Asia
– Fourth most populous country in the world, but underperforms economically relative to population size
– Abundant natural resources to include timber, oil, natural gas, silver, coal, fertile soil, gold, bauxite, tin, copper, timber, and nickel

“The largest economy in Southeast Asia, Indonesia has charted impressive economic growth since the late 1990s. Today, Indonesia is the world’s fourth most populous nation, the world’s 10th largest economy in terms of purchasing power parity, and a member of the G-20.”

World Bank, 2021

Country Facts:

Population:

275 million, 1.07% growth in 2020

GDP:

$1.12 trillion USD, 5% average growth

GNI per capita:

$4,050 USD, 3% Inflation, upper middle-income

Industries:

Manufacturing (automobiles, electronics), wholesale/retail, trade, agriculture (rice, rubber, fisheries), mining, petroleum, and timber

Tourism:

Investment:

#26 Country in the world for tourism revenue
#40 most visited country in the world (WEF Report)

Foreign investment is difficult, but the Indonesian government is trying to make it easier

#73/190

#102/180

54%

136 M

$988 USD

#74/100

31% NYC Prices

Ease of Doing Business

Corruption Perceptions Index

Human Capital Index

Working Age Population

Household Expenditure Per Capita

English Language Capabilities

Cost of Living Plus Rent Index

Marketing:

Per capita expenditure:

$8,269 USD
Internet penetration:

56%

Shop online:

11%

Mobile ownership:

91%

Primary messaging:

Whatsapp

Primary website:

Facebook/Google

Average Labor:

Infrastructure:

Opening a Business:

Relevant Laws:

Double Taxation Relief with 66 countries, including tax convention with the U.S

Time to Incorporate:

2-3 months to incorporate/register, ~60 days to complete additional tasks
Fees to Incorporate:
Depends on may factors, but fees range from nearly zero to $177K USD for some finance, logistics, & e-commerce companies
Corporate Taxes
25%, though listed companies meeting certain requirements may be able to reduce to 20%
Remittance Taxes:

Corporation dependent (15% for a branch corporation to transfer to head office)

Foreign ownership:

100% foreign ownership possible in many circumstances

Restrictions:

Multiple sectors closed to foreigners, including airport/seaport construction and operation; electricity production, transmission, and distribution; drinking water; railway service; and certain medical services.

BBA Services:

BBA has a small staff in Jakarta, plus Indonesia experts living overseas. BBA can help match you with local partners, navigate local norms, and establish a foothold in Korea.