When it comes to doing business in Indonesia, many regard Indonesia as a land full of potential, rich culture, diverse resources, and abundant workforce with a wide array of opportunities – thus opening Indian companies in Indonesia.
The attractive characteristics have sparks many investors’ interest. Corporate giants have continuously flocked to grab their market share, including from India. More and more Indian companies in Indonesia, are expected to grow in numbers.
According to Randstand Workomonitor, Indians between 25 and 34 years old prefer to start a business on their own. The survey also stated that 56% of the respondents have a strong will to start their own venture. With Indians’ great intention to become entrepreneurs, Indonesia has become a favored investment destination.
Before jumping right into the Indonesian market, know your options. Make sure your entrepreneurial journey is a smooth one. Do not waste away your time and money.
This article is going to discuss essentials you should know as an Indian who is interested in doing business in Indonesia.
Traditionally, the majority of Indian businesses in Indonesia are still in trade, wood products, textiles, and manufacturing.
But now, more and more Indians are interested in investing in certain industries such as the health industry and infrastructure industry. This sector has seen very positive investments from India to Indonesia with significant growth every year.
Indian investors are more tempted to participate in the infrastructure industry. India has the same challenges and opportunities in the market. As two of the world’s largest emerging economies, both countries are encountering the infrastructure gap.
The Indian ambassador also mentioned in Jakarta’s second India-Indonesia Infrastructure Forum (IIIF) that urban railways, roadwork, airports, oil and gas, and the health industry are their main focus. These sectors allow Indian companies to become beneficiaries through Special Purpose Vehicle arrangements.
Furthermore, waste management through technologies, information technology, are also fields that Indian investors are highly interested in.
It has become less complicated for Indians to enter Indonesia. The government has implemented many friendly policies.
However, the basic rules still apply. You must have an Indian passport of at least 6-month validity and blank pages on your passport for visa stamp. You will be denied entry if you do not comply.
You will get a free visa that lasts for 30 days to survey the Indonesian market, as long as you do not engage in any business activities that generate income. This free visa cannot be extended and it is a single-entry visa.
Visa run is not recommended if you are planning to stay for more than 30 days. You will risk being denied into Indonesia if you do it too often.
If you plan to stay for more than 30 days but fewer than 60 days, here are your options:
Social and Cultural Visa
This is valid for 60 days and you need a sponsorship letter.
Visa on Arrival (VoA)
A VoA is only valid for 30 days and you can extend this visa once. You can purchase it at the airport directly. Do remember to keep your receipt, you will need it for extension.
This is probably the best option for most Indian investors to stay for a longer period. It is valid for 60 days (extendable). It is also available in single-entry or multiple-entry.
To quicken the process of your Indonesia business visa application, you can apply online.
Foreign companies (PT PMA), local companies (PT) and representative offices are the most common forms of entities that Indians start in Indonesia.
Also known as a foreign limited liability company, PT PMA’s can be owned by Indians. The foreign ownership is subject to the Negative Investment List (NIL). It depends on the type of sector you’re involved in.
Only Indonesian nationals can fully own this entity type. It is only possible for Indians through the Special Purpose Vehicle arrangement with an Indonesian partner.
This is a good option to test the water in Indonesia before you set up your company. It can act as a branch of your parent company abroad. Do take note that it cannot conduct business activities that generate profits or revenues of any kind.
Not sure which legal entity option suits your business needs best? Discuss your market-entry plan with us. Our team of consultants and legal experts will be happy to provide you with the advice and consultation you need. We have assisted a lot of Indians who are interested in doing business in Indonesia.
Get in touch by filling in the form below. Or, visit our offices in Jakarta, Bali, and Semarang.