Invest Indonesia : Promising and Challenging
Invest Indonesia – Indonesia is one of the country that offers promising market in Southeast Asia. It has been a market destination for investors from around the world. Even though forerunner businessmen have proved amazing growth, interested investors are supposed to observe the field first. Yet, invest Indonesia is promising and challenging.
Market Potential
Indonesia has many attractiveness for investors to consider. Since a long time ago, the country is known for abundant natural resources. It produces natural gas, mineral, wide variety of plantation, crafts, and so much more. The material wealth is supported by the large population which is dominated by productive ages. This group of people are ready to train and work.
Moreover, Indonesians under the age of 2 also construct major demographic making it promising for future market. In coming years, this group will seek for products and services. Besides those classic advantages, good news for investors also comes from improvement on the easiness level to open business in the country.
Regulation is revised every few years, bureaucracy is simpler, corruption is now dealt seriously, and more license for certain business are just among reason why invest Indonesia is becoming more attractive and promising.
Challenges
Further market observation may lead you to find some challenges in operating in Indonesia. Despite its growing economy and potential market, the country is still unpredictable business place for some investors. One of the biggest challenge comes from the regulation in company establishment.
Although it is said that business is becoming easier in Indonesia, investors have to be ready with set of regulation and process which will consume some time. To establish a company, foreigners have to inform the detail and other important information and face in front officials. Therefore, it is important to relate with a knowledgeable and reliable local partners since they will help providing access to related officials.
The process of company establishment can be easier and less complicated by using consultant services. This agent will guide you along the process which presumably takes more than two months. By the services they offer, foreign investors are allowed to be directly involved in the beginning of the whole process.
However, some business classification need to obtain additional licenses so more involvement of the investors is necessary. If you must appear in front of the related board or institutions, consulting firm will keep you accompanied by a senior consultant. Choose a reliable, proven consultant firm to be partner with. Information from a forerunner will help you to decide which one.
Risk in Operating Business in Indonesia
Invest Indonesia is an attractive challenge for investors all over the world. Despite its promising market growth, the country still has many issues to consider. There are some common risks in operating business in Indonesia.
- Politic and demonstration
Indonesia is the world’s largest democratic country. As a young democratic country, Indonesia is considered success in managing political stability. However, since it first emerged from the former constitution, the country is more open for demonstration. People gather to demonstrate in relatively small scale. It occurs mainly over government policy on issues like politic, economic, and social.
- Economic
Despite general growth shown in graphic, Indonesia is still facing internal challenges in economic. They are regional income disparity and economic slowdown. Java island generates majority for the country’s GDP. In 2016, economy in the country expanded. Unfortunately, it slowed in the fourth quarter of the year.
Economic slowdown is closely related to the country’s budget cut policy which intends to minimize the risk of higher deficit. Meanwhile, exports in Indonesia is affected by external conditions. For example, China’s economic slowdown gives unfavorable effectsince Indonesia’s export is expected to remain low.
There is an important note about spending capacity in the country. Any revision of fuel subsidy significantly affects people’s spending. Unfortunately, it is uncertain whether oil price will rise back or remain stable.
- Corruption issue
By the establishment of Corruption Eradication Commission or KPK, corruption issues are taken seriously. More transparency is urged in financial flow and interaction between business institutions and government officials are closely monitored. Any form of bribery and corruption is against the law. However, it is still a major hurdle in Indonesia. The task is still a long way to go for the commission to complete.
- Infrastructure
Despite numerous of facility building nowadays, number of infrastructure in Indonesia is still considered lack to sustain a dynamic business. The construction of roads, bridges, and transportation device are expected to increase investment in recent time.
- Natural disaster
Indonesia’s geographic location makes is vulnerable to ranges of natural disasters like earthquake, volcanic eruptions, tsunami, landslide, and floods. The country is located in the Pacific ring of fire. Natural disasters surely cost physical damages and casualties. Among the most disastrous calamity is the Aceh tsunami that hit back then in 2004. Indonesia was one of the worst-affected countries. Great numbers of people perished and infrastructures were heavily damaged in the disaster.
