A Brief Guide on How to Invest in Indonesia

Investing in Indonesia is tempting. Currently ranks 4th as a global investment destination after India, China, and the United States of America (USA), Indonesia is the largest economy in Southeast Asia with a nominal GDP of $888,6 billion.

Many economists believe that the fourth most populated country in the world is one of the best places to invest including the terms of climate and investment services.

Indonesia has almost everything, from natural resources, well-trained workers, and the large, growing domestic market. Here are the reasons why you should invest in Indonesia.
There are Singapore, Malaysia, Japan, and South Korea, yet, Indonesia is believed to be the global powerhouse in Asia. In 2014, Indonesia reached not less than $870 billion, making the highly populated country as the largest economy in Southeast Asia.
After emerging from autocratic into the democratic country 20 years ago, Indonesia has successfully managed the political stability. It turns out to be one of the keys why many investors have been willing to do business here.
Indonesia is heaven. They have so many natural resources such as mining resources, oil, natural gas, coal, copper, gold, tin, bauxite, nickel, and many more. Not to mention the beauty of the thousands of islands where you can start a tourism business.

Sound economy

Political stability

Natural resources

However, there are risks that potential investors need to calculate, including demonstration, high numbers of corruption, bureaucracy, infrastructure, and natural disasters.
Investors should also look at these two risks.

Indonesia has long faced inflation repetitively along with economic growth. If the value of the Rupiah is not stable, the cost of production will be difficult to predict. The production cost will simply raise when the dollar is weakened, so investors investing in manufacturing industry would cut down their interests.

Being in Southeast Asia as a developing country makes Indonesia face more geopolitical risk than other developed countries. The global issues on security and peace, economy, and humanitarian problems are often disrupting the traffic of investment.
There are two options for establishing a legal presence in Indonesia. It will be done through the authorities, the Indonesian Investment Coordination Board (BKPM) in the form of Limited Liability Company – Foreign Direct Investment (PT PMA) or Representative Office.
The job is to make sure who are and are not allowed for foreign investment. PT PMA will verify your business area in the Negative Investment List (DNI) whether or not it is open to foreign investment, closed, or open with restrictions.
Foreign companies can establish a representative office in one of the capital cities of the province in Indonesia. However, the operation is limited to supervising and coordinating. The representative offices are not allowed to do the direct transaction with other companies and/or to individuals. What they can get is a work permit for expatriate’s manager and visa. Interestingly, a lot of foreign investors establish a representative office just to promote the company. It is up to them whether they want to establish a limited liability company in the future or not.

How to invest in Indonesia

Limited Liability Company – Foreign Direct Investment (PT PMA)

Representative office

With a lot of potentials, Indonesia attracts many investors to invest their money here. Make sure to learn everything needed before you invest in Indonesia. Good luck!