Investor Indonesia – Southeast Asia is a challenging market for investors around the world. Some countries provides numerous of promising, lucrative opportunities yet challenge like foreign ownership restriction is there. The rapid modernization in some developing countries makes them observe massive preparation to improve their landscape.
Meanwhile the civilians, they get into consumer class as they seek for products and services on daily basis.This condition is surely a tremendous motivation for foreign investor to make fortune. For optimal business operation and minimize existing obstacles, here are a guideline before you officially in the investor Indonesia.
Government Regulation
One on the most essential challenges in establishing business in Indonesia is government regulation. Before you are in the investor Indonesia, you need to closely observe this key factor. Set of business regulation in the country is considered among the most complicated and time-consuming. It is important to relate with knowledgeable local partner that is able to provide you access to the related officials. In Indonesia, government involves in almost all business sectors.
In the process of business establishment, foreign investors should be directly involved at the beginning of the whole tangent. You need to communicate basic information and other details of your business. Meanwhile, certain business classification require more involvement from investors to appear forward the related official board, accompanied by a senior consultant of a hired agent if you need to be.
Restriction for foreign investment in Indonesia is regulated by the negative investment list. It determines which sectors are allowed for foreign investment along with the amount of ownership provided. The negative investment list is revised every few years.
The revision will not affect business which has previously operated and later get into the list. However, more and more business classification gain permit nowadays and the percentage of foreign ownership is increased. The latest significant revision is a full ownership for foreign visitors in property industry.
Insufficiency of Qualified Human Resources
As the country with the third largest population in the world, Indonesia is abundant of people in productive age. Unfortunately, the number of qualified people do not get along with the massive population. Many have complained that they do not get enough people to fill position in entry level.
People who come for the jobs often time do not meet the expected requirement. The condition is more moderate in manager level. Still, the problem is it is hard to find people with qualified global knowledge and leadership skill which are essentially needed for business to improve. One effective solution is companies should provide training in order to develop people skill.
Insufficient Infrastructure
The problem of insufficient infrastructure in Indonesia result the country less competitive and less attractive for foreign investors. Inadequate infrastructure rise the logistic cost. The problem is severe when intense rainfall season occurs. Poor water flow system often ends up in floods that even more consume time in delivering goods.
Good news is, now the country’s government intends to increase the number of foreign investors. Therefore, adequate infrastructure is on the top priority. Improvement and modernization of basic facilities such as roads, bridges, ports, airports, and electricity is carried out. Holiday and business trip to and within the country will be more enjoyable, comfortable, and effective than ever before.
Inadequate infrastructure itself of course, opportunities for foreign investors to be involved in projects. The country’s business regulation is frequently revised so that foreign investors can now have more ownership. Infrastructure development is recently on the top promising sectors for investment since the country intends to increase international arrivals. Besides, domestic modernization requires qualified infrastructure, too.
Diverse Audiences
One of the country’s main attraction to the world is the diverse in cultures and languages. Indonesia consists of thousands islands with their own identities. All are unique and exceptional. However, this character transforms into a challenge for investors to determine their target audiences. Cultures affect greatly on majority of indonesians’ behavior.
Moreover, there are difference in religion and belief. Relationship with God also affects most Indonesians in their daily lives. This behavior later affects people in choosing products or services since people prefer those which accommodate their (personal) identities. This is quite tricky to map out target audiences and it is believed willnot be as easy as it is in other countries.
Indonesia is in the world’s ‘fragile five’economy. Establishing business in the country offers promising market as well as unpredictable condition. Regulations as main factors in investment are continuously revised for more attractive business climate as government sees investment is important in order to increase the country’s economy. Therefore, it is essential to keep informed from the forerunners as well as reliable local partner on the development of the country’s economic climate. Therefore, you will be closer to become part of those who succeed in investor Indonesia.
