doing business in indonesia - company establishment and market entry by indoconsult
DESCRIPTION
How to setup a company in Indonesia? What are the requirements for foreign investores? What do you need to consider when doing business in Indonesia?TRANSCRIPT
Indoconsult®
Business & Intercultural Consulting Indonesia
Doing Business in IndonesiaCompany Setup & Market Entry
Christian Hainsch
Managing Partner
Indoconsult®
Business & Intercultural Consulting Indonesia
What do you need to establish business in a foreign country?
Demographic Data
Basic Country know how
Infrastructure and Location details
Economic and Market Data
Information about Laws, Regulations and Taxess
Intercultural information and know how
Country specific experience or consulting
Market Entry Strategy
Indoconsult®
Business & Intercultural Consulting Indonesia
Ways of doing business
in Indonesia
Indoconsult®
Business & Intercultural Consulting Indonesia
In general open market for foreign investment (Limitations in some areas)
„Single Point of Entry“ for Investors via Investment
Coordination Board (BKPM)
Foreigners can hold up to 100% of companies in Indonesia (Limitations in some areas)
Currency conversion & transfer w/o restriction
Several tax incentives available
− Authorities do not work efficient
− Corruption is still a big issue
− Unequal treatment of foreigners
− Lack of Infrastructure
− Inscrutable jungle of Laws & Regulations
Market Entry | Not easy but possible
Indoconsult®
Business & Intercultural Consulting Indonesia
• Sales Market
via own local company
via distributor / agent
• Sourcing Market
• Production
• Research & Development
• Executing Projects
What is possible in Indonesia
Very limited
Indoconsult®
Business & Intercultural Consulting Indonesia
Variety of engagement in Indonesia
Sales Agent
Representation
Office
Local Company
Local partner (Distributor) for sales of
products in Indonesia
„First Step“. Branch of your company. No
operative business allowed!
Limited Liability Company
PT (Perseroan Terbatas).For foreign investment - PT PMA
(Penamanan Modal Asing).
Joint VentureInvestment in existing local
company
Indoconsult®
Business & Intercultural Consulting Indonesia
Process of company registration
1. Preparation
2. Company Setup
3. Permanent Business
License
Indoconsult®
Business & Intercultural Consulting Indonesia8
What does a company need?
Indoconsult®
Business & Intercultural Consulting Indonesia
Preparation
Is your business
open for foreign
investment?
You need to check in the
Negative Investment List (DNI)
if there are restrictions or
special requirements for your
area of business in Indonesia.
Indoconsult®
Business & Intercultural Consulting Indonesia
Do you have
sufficient money
for investment?
Foreign Investors have to meet
minimum capital requirements
for certain areas of business.
Every foreign investors has to
proof its investment by
presenting an investment
utilization plan
Indoconsult®
Business & Intercultural Consulting Indonesia
How should your company
structure look like?
Is your area of business
open for foreign
Investment? Which
structure is required to
meet legal requirements?
This topics need to be
planned in Detail before
setting up your business.
It is important to select
the right people for the
necessary positions (e.g.
director, commissionaire)
Indoconsult®
Business & Intercultural Consulting Indonesia
Where should your
company have ist
domicile?
Indonesia is big, very big! For
operative business and
administration processes it is
important to select your place of
domicile carefully. Of course can
do business all over Indonesia but
your company domicile is the
place where you management is
located.
Indoconsult®
Business & Intercultural Consulting Indonesia
Company Setup
Applying for your
Company Name!
To take you good name to Indonesia is
fine but not that simple. Before getting
your company registered you need to
get approval to use it in Indonesia.
Indoconsult®
Business & Intercultural Consulting Indonesia
Investor
Administrative Act
Obtain administration
Number for License
Agreement Letter
Validations:
necessary
Validations:
• Negative Investment
List
• Letter of
Recommendation nötig
• Local partnership
necessary
Return of Application
Application Receipt
Issue of approval by
Back Office
Application Form:
All necessary documents
including attachments
Self Assessment
(Self Assessment Check
list)
BKPM Assessment of all
application documents
and attachments
Application received
and completed
Application Process – BKPM for Principal Licences
Mandatory Process
incorrect
correct
Indoconsult®
Business & Intercultural Consulting Indonesia15
Some points for successful Market Entry
� Be prepared, plan in detail and have a solide strategy
� Take a look behind the curtains of business in Indonesia
� Take care not to be rushed
� Get good advice and consulting
� Keep calm, be patient and have endurance
� Select local partners and employess with great care
� Indonesia is not Europa
� Not everyone who is smiling at you is your friend
Indoconsult®
Business & Intercultural Consulting Indonesia
Do you have questions about doing
business in Indonesia?
We support you with Market Entry
consulting & services, setting up
your company and business
structure in Indonesia.
Christian Hainsch
Managing Partner
Phone: +49 (0) 1522 4604094
Picture Sources:
Government of the Republic of Indonesia
Istockphoto.com
HorizonP Coaching & Training e.K. Munich