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Doing Business in Indonesia: An Overview of Indonesian Market Landscape

We have all witnessed how the Indonesian market slowly rose to become one of the world’s emerging economic hotspots. With the growing attention that the archipelago has been getting, surely there is no lack of foreign investors seeking great opportunities like this and start a business in Indonesia.

According to the 2016 Economic Survey of Indonesia, a sound macroeconomic policy framework will pull a miracle economic performance. However, it will still be facing challenges that can be overcome by the strong mandate from the administration.

Indonesian Market Landscape throughout The Years

Ease of Doing Business (EODB) in 2014

The past few years have brought significant change to the Indonesian market landscape. In 2014, the Indonesian people pushed President Jokowi to realize his promise of sustainable growth and economic development in Indonesia. With infrastructure development as the top priority, the Jokowi administration made great efforts to create an investor-friendly government with a minimum regulatory process for doing business in Indonesia.

PricewaterhouseCoopers (PwC) points out that Jokowi’s administration is in a constant implementation to increase infrastructure spending until 2019. The gross domestic product (GDP) will also reach a peak of 7.7 percent in 2017 forecasted by PwC. They are also in full force promoting a Public-Private Partnership (PPP) scheme, encouraging investment in the infrastructure sector.

Ease of Doing Business in (EODB) 2016

In late 2016, Indonesia’s ranking in EODB made its way up from 106 to 91 out of 190 countries; according to World Bank’s global survey.  Thanks to a series of fundamental reform packages—now 15 of them—making a 15-place jump for EODB. It has proved that the government’s multi-pronged efforts have been fruitful with Capital Investment Coordinating Board (BKPM) living up to its goal to do better. Company registration in Indonesia is made simpler this way.

Indonesia is a strategically important market with the largest economy in Asia—a GDP of 932 billion (USD); it is also in the third rank for the fastest growing economy, competing with all the countries in Asia. A projection from IMF estimates the purchasing power to reach 5.1 percent growth in 2017 supported by the strong private consumption—with a 5 percent growth over the past decade—putting Indonesia in the 8th place in the world with its purchasing power parity.
With this emerging economic opportunity, setting up a company in Indonesia seems like a good way to reap the economic benefits in the long run. The prime economic sector with 24.3 percent of GDP is the manufacturing and process sector.

Ease of Doing Business Nowadays

As a matter of fact, Indonesia is the fourth most populous country in the world with a huge population of over 250 million. It is also one of the largest archipelagic countries; with over 17, 000 islands contributing to its abundant natural resources and major transport links. The large population means a large market available to invest in by foreign companies in Indonesia.  Today, Java is the most developed and populated island, keeping the most businesses and investments at its heart.

With the effort to build a modern infrastructure; to reduce the digital gap between Indonesia and other countries; with the estimation, the data traffic in Indonesia will rise sixfold by 2020. Together with that, Indonesia made its name in the digital world with the fourth largest users of Facebook globally; Jakarta is the largest user of Twitter in the world.

In conclusion, given the optimistic market landscape, starting a business in Indonesia has never been easier. Many investors are welcome to unlock Indonesia’s Massive business and investment opportunities.

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As a leading consulting company in Indonesia, Cekindo provides comprehensive services related to market entry and incorporation, from company registration and product registration to visas and permits.

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