Indonesia Country Profile

Recommendations:

Indonesia is a populous, resource rich country which can be challenging for foreign companies due to an inconsistent regulatory environment and corruption. Ongoing structural reform initiatives in banking, tax law, and business law are gradually improving the business environment. **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:

– G20 Member; Largest economy in Southeast Asia; Projected 5% growth in 2022
– Largest working population in ASEAN
– Abundant natural resources to include timber, oil, natural gas, silver, coal, fertile soil, gold, bauxite, tin, copper, timber, and nickel

“Indonesia’s population of 270 million, GDP over USD 1 trillion, growing middle class, abundant natural resources, and stable economy all serve as very attractive features to U.S. investors.”

World Bank, 2021

Country Facts:

Population:

275 million; 3.7% growth in 2021

GDP:

$1.05 trillion USD; 5% average growth

GNI per capita:

E-commerce:

$3,833 USD; 1.9% 2021 inflation; lower mid-income

$38 billion; 37% Growth

Industries:

Manufacturing (auto, electronics), agriculture (rice, rubber, fisheries), mining, petroleum, and timber

Tourism:

4.97% GDP; #26 Country with 4.05 million visitors; Covid-19 restrictions hurt Bali tourism

#73/190

#102/180

54%

185 M

$4,450 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:

$1,008 USD

Internet penetration:

73.7%

Shop online:

82%

Mobile ownership:

125%

Primary messaging:

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%

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 local office in Seoul. BBA can assist SMEs make sales in most sectors, research market opportunities, and find trusted local partners.