Doing Business

September 8th, 2006, in Business & Economy, by Patung

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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.

6 Comments on “Doing Business”

  1. Pinaki Bhadury 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. musa alkatiri 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. Leon 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. Victor 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. mehtap 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. Shamsher Ali 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

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