Doing Business

Sep 8th, 2006, in Business & Economy, IM Posts, by

Indonesia remains a difficult place for doing business as a report by the World Bank puts the country at 135th best in the world.

The survey, done by the World Bank and its financial arm, the International Financial Corporation (IFC), entitled "Doing Business 2007" saw Indonesia's ranking at 135th out of 175 countries, as compared to 131st last year out of 155 nations measured.

These are Indonesia's rankings broken down by the factors that make up doing business.

Ease of... 2006 rank 2005 rank
Starting a Business 161 161
Dealing with Licenses 131 129
Employing Workers 140 141
Registering Property 120 118
Getting Credit 83 76
Protecting Investors 60 58
Paying Taxes 133 129
Trading Across Borders 60 55
Enforcing Contracts 145 144
Closing a Business 136 126

Among the countries that make up the East Asia & Pacific category Indonesia is ranked 20th out of 23, with only the basket cases of Cambodia, Laos, and East Timor being worse places to do business. Meanwhile Singapore is number one best place to build a business, Hong Kong second, Thailand 3rd, and Malaysia is ranked 4th best. Of other Asean countries Vietnam is ranked 17th and the Philippines is 19th.

Indonesia saw improvement in its reduction of the time and cost needed to start a business, but in other areas such as registration and licensing, tax payment, employment, trade, financing and contract enforcement, the rankings barely moved.

While it now takes only 97 days, down from 151 days, to set up an enterprise in Indonesia, and at a reduced cost of 86.7%, as against 101.7% previously, of the country's per capita income, it still takes almost a year to get through the tangle of licensing.

It also takes another month's time each for the paying of taxes and for clearing customs, as well as almost two years to settle labour disputes.

While other countries have improved their attractiveness to investors by a considerable degree it appears that Indonesia has only made modest advances, and hence its continued poor performance in indicators such as this, which fail to highlight the benefits and advantages that the country has. Those weighing up the pros and cons of doing business in Indonesia will likely have much to ponder on in these figures.


21 Comments on “Doing Business”

  1. avatar Pinaki Bhadury says:
    January 8th, 2008 at 2:22 pm

    We are looking at option of setting up business in Indonesia. Could you tell us the cost of industrial building in Indonesia and how strict are labour laws there? Is hiring contract labour an issue in Indonesia?

    Look forward to your clarification.

  2. avatar musa alkatiri says:
    May 22nd, 2008 at 11:08 pm

    To setting up business in Indonesia is very easy.
    about the cost industrial building in Indonesia cost to compare with another country , Indonesia indicate very relative cheap and profitable that kind business. and about labour laws is nothing hard , easy and simple and about laws isn’t strict , because a lot of people unemployee and I believe Indonesia goverment will support every investor in Indonesia currently. and about hiring contract labour it’s been long issued in Indonesia look at a lot of employment supplier for contract labour in jakarta for middle east and asia currently, and all of them contract labour 2 or 3 years, if you need any information detail just call me.
    cell;704-222-8477, 704-643-2783

  3. avatar Leon says:
    September 9th, 2008 at 12:15 pm

    Hi

    I am considering setting up a surf and study English school in Bali for travellers as it is both a great place to surf and a very cheap place to stay while studying. You might say why english in Indonesia – well many of the baliness people speak english and so do many of the tourist therefore practising won’t be a problem.

    I have seen the lengthy process for starting a biz -

    The questions i have for you are –

    1)Is their any specific legilation i need to know about in relation to my business idea ?
    2)Once the process is complete how do visas work for entry and exit ?
    3)Can anyone help me with the process of setting up my business idea?

    Thanks Leon cheekymonkeyunit@gmail.com

  4. avatar Victor says:
    November 13th, 2008 at 3:52 pm

    Hi

    I would like to start an agency in indonesia. Our agency will provide guardianship, homestay and education services for indonesia student who like to study in Singapore.

    The questions i have for you are –

    1)Is their any specific legilation i need to know about in relation to my business idea?
    2)Do i need to apply any visa on indonesia for those student who want to study in Singapore?
    3)Can anyone help me with the process of setting up my business idea?

    Thanks & Regards,
    Victor Ng
    victor_ng75@hotmail.com

  5. avatar mehtap says:
    April 1st, 2009 at 7:28 am

    Hi I want to open a restaurant at Indonesia but I heard from people it is not easy as my thought. Can you please tell me:

    1-Do i need to apply any visa on Indonesia?

    2-Is their any specific legislation I need to know about in relation to my business idea?

    3-What do I need to do for open a business in there?

  6. avatar Shamsher Ali says:
    June 18th, 2009 at 8:13 pm

    Hi,

    We are planning to start a small software company to support our in-house requirement initially with 6-8 software developers, Can any one guide me how much its going to cost or can provide some specific document related to this.

    Regards

  7. avatar Trevor Robertson says:
    July 12th, 2010 at 1:04 pm

    Hi,

    I am looking at opening an English School in Indonesia that will have direct links with a Business School in Sydney Australia.

    Can anyone sed any light on the process that needs to be taken to register a business in Indonesia.

    Thanks

    Trevor

  8. avatar Edward says:
    February 10th, 2011 at 2:25 pm

    Hi, my friend an Indonesian national wishes to open a sole proprietorship in Jakarta. Could anyone kindly inform the best way and what are the procedures to follow.
    Thank you.

  9. avatar Tahir says:
    July 15th, 2011 at 6:57 pm

    I am also looking to start a business in Indoensia. Any information on it or help will be appreciated.
    Specially in Bandung area, what type of business with small amount.

  10. avatar de roos says:
    September 8th, 2011 at 12:47 pm

    i alredy start a bisnis its a restorant the problem is there is no IMB to get it i must pay can you tel me the amount to be legal? the told me if i dont pay the close me down? the talk about 80.000.000

  11. avatar Fred Anderson says:
    December 16th, 2011 at 10:36 pm

    Hello friends, I wish to open a restaurant in Jakarta or Medan. Can any one plz guide me about what kind of licencing do I need and how much investment would I have to make? I am an american national and I heard that foreigners can easily set-up a business in Indonesia, Is that true ??

  12. avatar harlys says:
    December 17th, 2011 at 9:34 am

    No Its not easy I got a Cafe Restaurant in Bogor (java Barat)

    1-Do i need to apply any visa on Indonesia? Yes but Thats easy

    2-Is their any specific legislation The wil make your live a hell but with money and know the way to do it its possebel

    3-What do I need to do for open a business in there?

    Friends in all positions at the goverement , police and local

  13. avatar harlys says:
    December 17th, 2011 at 9:37 am

    If this link can stay This is de cafe in bogor take 2 year al kind of problems but is now
    WE CAN OPERATE
    WE ARE LEGAL

    HARLYS DINAMIC facebook

    http://harlys.pub-party.com/

  14. avatar bonni says:
    December 17th, 2011 at 12:18 pm

    Harlys,

    Just checked out your website. How far is your cafe from ciawi? I am in puncak at the moment. So bored here. Arrrggghh… Might come to have a drink after safari night…

  15. avatar harlys says:
    December 17th, 2011 at 3:56 pm

    Jambu dua you know? airmancur Then take the jl dadali (road factory goodyear)

    Thats also the street where Harlys is on !

    Link facebook

    https://www.facebook.com/harlysdinamic

    There is also the the adres and phone nr

  16. avatar bonni says:
    December 17th, 2011 at 4:17 pm

    Thank you harlys. I’ll check it out.

  17. avatar harlys says:
    December 17th, 2011 at 4:19 pm

    Ok see you mabey at the cafe !

  18. avatar bojog says:
    December 17th, 2011 at 9:10 pm

    I’ve owned a factory and retail store in Bali and have exported 33 containers of assorted merchandise from Indonesia to the USA over a 15 year period with a retail value of $6.5 million USD. The last 4 years of our business I was netting $375K/year and working a 25 hour week.
    I’m retired now in Bali and will consult with anyone opening a business or factory in Indonesia. I’m not cheap ($100/hour) but I promise I can save you millions (depending, of course, on the size of your business).
    I’ll give you one piece of invaluable advice. If a local here offers to help you for free, for however credible a reason, and you trust him to do your permits, sourcing, finding staff, etc — you’ve just surrendered about 20% of your net profits for the life of your business. Rule #1. Trust NOBODY. You’re not in Kansas anymore.
    You get what you pay for. My assistant and I both have Ivy League degrees (Wharton and Columbia). Honestly, degrees are meaningless. This is all about avoiding costly mistakes, putting together a business plan for this country’s unique dynamic, sourcing directly, cost effective marketing and avoiding the middlemen.
    Briefly, write to me your plan and I’ll get back to you if yours is a project I want to undertake.
    Beryl Dov Lew
    bojog26@gmail.com

  19. avatar ami says:
    January 12th, 2012 at 11:18 pm

    Dear Bojog,I wish I can continue your business.

    I ve been living in Syracuse NY for a long time,I ve been owning food distributor in the last 15 + years my spouse passed away 3 years ago,somone has been dealing with us for these years stole it from us and sell it to other people behind my back.

    My original country is Indonesia from Java island,I ‘ve been in Bali many times.I am interested to import something from there(I used to export heavy equipment) or I can export from here anything.I know all the paperwork.

    I graduate from Gajah mada Univ and I took some MBA class in SU years ago.My Spouse was in Harvard JFK and SU Maxwell school.

    I am looking forward to hearing from you.

    Amie.

  20. avatar S.Anandan says:
    February 1st, 2012 at 11:37 am

    Dear Boj, im base in Singapore and im tieup with wellness and beauty industries operates in Malaysia, KL and I have a product which is very good for the Indonesia market and I am looking for someone with good leadership capabilities to spearhead this business.
    These products can be sold through to the usual retail channel or more effectively direct marketing or MLM. You will be the owner of the MLM company (or parntership) and I a the supplier of the products name QueFIR Sauna which suits to wellness centres, clinic, terrace house, condominium & apartments and bunglows etc….please can you guide me,

    I am looking forward to hearing from you,

    Thanks & Take care,

    Cheers, Anandan

    sanandan65@hotmail.com/ 65 9437 5062

  21. avatar Hidayat says:
    February 15th, 2014 at 2:58 am

    I want start cafe in Jakarta… Pls Can some one guide me how much cash do i need to start the cafe..thanks in advance
    Best regards
    Khan



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