Business in Indonesia, The Challenges to Run a Business as Foreigners

Apart from the fact that Indonesia has unsolved economic problems, many foreigners see the country as a strategic and attractive place to form a business. Starting a business in Indonesia is far from easy, according to World Bank's rank of ease of doing business. Indonesia sits on 166th which means the foreigners need huge attempt to start up. However, the big country remains promising for several reasons. The natural sources and strategic place make Indonesia counts.

Business in Indonesia, The Challenges to Run a Business as Foreigners

Five Challenges to Start Business in Indonesia

In case you already decided to run a start up in Indonesia, there are several things that you should know. It relates to the challenges that you have to face whenever starting and registering company in this country. There are five short-listed challenges that you should be ready to face.

First is long registration process. It is not a secret that Indonesia has long bureaucracy in almost any process. When it comes to registering your company, it usually takes 47 days of average to complete. Not to mention the complicated process because you must liaise with Ministry of Manpower, Ministry of Law and State Treasury. This is only the first struggle that you should face whenever starting business in Indonesia. Not surprising if the country sits on 166th positions of ease of doing business.

Not only registering the company, it is also an obligation to get construction permits. To get this, it takes 158 days that involves 13 procedures. There are some certificates that need to be acquired before building your own company. You must consult with Zoning Department as well as visit tax office and Ministry of Industry and Trade. Second is about getting the credit. Do not expect too much when you want to get credit in Indonesia. According to World Bank, Indonesia places 129th position for ease of getting credit. It makes forming business in Indonesia more challenging. There are some procedures that should be performed including conducting research.

Another challenge to face is about paying taxes that takes much time. There are approximately 51 tax payments that should be made for each year. To deal with this, company takes 259 hours. The long process also becomes a problem that foreign company owner should know before opening business in Indonesia.

Next is protecting the investors. Indonesia applies a really strong protection to investors, making it positions the top 50 among other countries in the world. The government upholds and recognizes the rights of foreign continually. It helps the Indonesian government keeps the foreigners do not get more than what they should get. In other side, it is a challenge for the company owner to deal with. And the last, work culture in Indonesia is somehow challenging for foreigners to run a business. Lack of transparency and some industrial disputes are the other difficulties.

Those are some common challenges waiting for foreigners who want to form a business in Indonesia. Apart from the lacks, Indonesia remains an attractive country with potential market to grow your business.

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