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.
Tags: Forecasts & Reports, Investment
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.
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.
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