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4 Mistakes Not to Make When Doing Business in Batam

4 Mistakes Not to Make When Doing Business in Batam

It is easy to comprehend why doing business in Batam is such an attractive approach for investors from around the world.

A predominantly open trade regime in Batam has contributed to its sustainable growth in the city as well as throughout Indonesia.

Currently, doing business in Batam is considered a fairly easy process while foreigners classify Batam as one of their top destinations for investments.

Batam is a free port and free trade area in Indonesia, serving as the major region for boosting the country’s economy through foreign direct investment (FDI).

The lack of restrictions in Batam makes the city not just limited to the hospitality and tourism sectors, but other industries and business segments have also seen striving on this dynamic land.

According to the Indonesian Promotion and Protocol Public Relations Bureau, the investment realisation in Batam continues to grow in 2021 onwards. As of 2019, the realisation of FDI in foreign-owned companies (PMA) reached US$359 million.

This article provides insights into doing business in Batam to assist foreign entrepreneurs who consider entering this market. Cekindo’s legal experts in Indonesia are available to advise you.

Top Investment Sectors in Batam

More and more business opportunities are available in Batam due to the city’s open policy for many different kinds of industries.

However, it is no secret that the growth and wealth of Batam, the largest city in Riau Islands, lies within some of the top sectors.

The most prominent industries in Batam, in terms of their sizes and investment values, are as follows:

  • Electronic and computer-related industry (audio and video equipment, components and parts, printed circuit board makers, automotive parts, and others)
  • Light manufacturing (shoes, leather goods, textiles and garments, toys, household products, consumer products, and healthcare products)
  • Heavy industry (pipe threading, steel fabrication, oil exploration equipment, offshore jackets, oil rig production, and heavy equipment)
  • Chemical industry (paint production, pipe coating, fatty alcohol production, and others)

Our company registration consultant at Cekindo can offer you more information about the favourable investment sectors and governmental policies that support the industries.

4 Mistakes You Should Avoid When Doing Business in Batam

To help shed some light on how to victoriously do business in Batam, our specialists have compiled a list of the most common mistakes that business owners should avoid making.

1. Not Having a KITAS to Work

Working without a KITAS (a work visa and stay permit) is one the most common mistakes while doing business in Batam, and also a serious one. It means that you work illegally and you may run the risk of getting a severe fine or even losing your business.

Related article Batam Visa Options: Which One Do You Need?

2. Not Having a Business Plan for Company Registration

A well-written business plan is crucial to the success of your company registration. This is because a complete business plan specifies your business classification (KBLI) and business activities.

Not having a well-executed business plan means that you may spend a lot of money on changing licenses in the future.

3. Not Engaging a Reputable Company Registration Consultant

Foreigners who are inexperienced in the business environment in Batam may get tricked by company setup scams or unqualified agents. These deceitful people claim to be able to help you to set up your company with sky-high charges.

In the end, they take your money and nowhere to be found. Your entrepreneurship then gets shattered.

Therefore, always go through comprehensive checks and research about the company registration company you’d like to engage with.

4. Not Using a Proper Special Purpose Vehicle Arrangement

It is downright risky to resort to your friends and family through a verbal agreement when it comes to Special Purpose Vehicle arrangements such as professional shareholders, professional commissioners, and professional directors.

This type of unofficial agreement will put your business in danger and you may fail to keep the control of your business – when your relationship with your family and friends turns sour.

So, doing your Special Purpose Agreement through a licensed provider of good repute is the way to go – to protect your business under the law in Indonesia.

Start Your Business Right in Batam with Assistance from Cekindo

When doing business in Batam, no matter if you are dealing with company registration or business license application, you need to have a deep understanding of the Indonesian regulations – which are embodied in all aspects of a business.

Therefore, it is vital to approach and obtain business advice from experts. Our experienced business consultants at Cekindo will guide you in each step to achieve the right path in starting a business in Batam.

Through Cekindo, not only can you gain the knowledge needed for successful company setup, network building, and business operation in Indonesia, but you can also enjoy ideal dynamic resources and solutions to enable professionals doing business in Batam.

To know more, send us an inquiry via the form below and Cekindo’s consultants will be glad to work with you.

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