Located off the coast of mainland Southeast Asia, between the Indian and Pacific oceans, Indonesia’s land archipelago is vast. Rich in heritage, culturally diverse, innovative and progressive, it provides incredible opportunities for international businesses.
Covid-19 latest information
This guide is an accurate reflection of the pre-Covid-19 business environment in Indonesia. Please note that due to the current situation, some circumstances may have changed in this country. Figures and data in the guide were last updated in August 2020.
One of the most densely populated countries in the world, Indonesia has a high-performing, fast-growing economy. HSBC has a long and diverse history in the country, with the Hongkong and Shanghai Banking Corporation Limited opening its first branch in Jakarta in 1884.
The extensive footprint of PT Bank HSBC Indonesia in the country has allowed us to contribute directly to the growth of the Indonesian economy, connecting customers to opportunities through our expanded capabilities and geographical reach, both locally and globally.
With award-winning solutions, we believe we have much to offer you and your business to soar and capture every opportunity that Indonesia has to offer.
We look forward to working with you!
1 World Bank Group, 2019
2 Organisation for Economic Co-operation and Development (OECD), 2019
3 Central Intelligence Agency (CIA), 2019
4 Trading Economics, 2019
5 Statista, 2020
* Map shows cities of economic significance according to the CIA, 2019
for ease of doing business (in a survey of 190 measured economies by The World Bank)
This is the tenth largest global market. Indonesia is the world’s fourth most populous country, from Aceh in the west to Papua in the east. Consumer sentiment has also been hitting record highs.
Indonesia is one of the top innovators among emerging economies. The country ranks 31st and 32nd in innovation and business sophistication respectively.
Indonesia is rich in natural resources including coal, tin, copper, nickel, bauxite, oil and gas. Above ground, its vast land mass grows palm oil, rubber, coffee, cocoa and rice.
There’s a reason why Indonesia is one of the emerging CIVETs (Colombia, Indonesia, Vietnam, Egypt, Turkey and South Africa) – it has incredible potential. This economy is projected to be the seventh largest in the world by 2030.
This vast archipelago of 17,000 islands is home to at least 300 different ethnic groups. This makes the country culturally diverse, yet with a distinct national identity.
Indonesia is the world’s fourth most populated country. It’s a vast patchwork of islands, peoples and economies.
Indonesia, its government, private and public sectors are focusing on the need to boost economic growth, investment and job creation. The administration has also been dismantling barriers that have previously dampened foreign investment. Businesses that align with some of the macro-trends and factors could do well here.
Opportunities in Indonesia also extend beyond its large domestic market. It benefits from favourable trading terms with other members of the ASEAN bloc.
There’s also now a shift in the production and manufacturing of goods from traditional North Asian manufacturing powerhouses, such as China and South Korea, to Southeast Asia, which includes Indonesia.
ASEAN comprises 10 countries including Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Vietnam, Laos, Myanmar and Cambodia. This is a regional inter-governmental organisation that promotes co-operation and facilitates economic, political, security, military, educational and socio-cultural integration.
Read on to discover more about the dos and don’ts of doing business in Indonesia. Also find out how trading in or with the country could help boost the future growth of your business.
It can take time to build relationships here and become a ‘trusted partner’, so businesses should ensure enough provision for this in their plans.
Dealing with government bureaucracy can also take time. The government is preparing to ease restrictions in 11 critical areas, including labour law, capital investment, business licensing, corporate tax and land acquisition.
Significant advances are needed in labour market efficiency to minimise redundancy costs and improve flexibility in determining wages. To help address this, the government has prioritised a program to upskill the workforce to improve its competency.
Despite investment, there are still some issues with the supply of infrastructure. The country is rated quite poorly in terms of technology readiness.
1 World Economic Forum, 2020
2 TMF Group, 2018