Overview of Why to Invest in Indonesia
Invest in Indonesia – Indonesia is a promising country for investors to invest their fund. The country offers abundant of natural resources and great population which many of them are in productive ages, young and skilled. The investment climate is also improving every year, making the country even more favorable for investors.
Indonesia’s already vast economic growth still has times for takeoff. The democratic system in the country support economic stability which is useful for business operation. Investing in Indonesia is advantageous. If you are one among those investors who are interested but still considerate to invest in Indonesia, here are guidelines to help you closer to decision making.
Potential Market in Indonesia
Today in 2017, Indonesia is still considered as Asia’s next big thing. The economy grows fast recently with the number 6.2% last year. Business in the country nowadays is not only limited to contract or manufacturing plans. Recently numerous plans involve joint venture with local representation in Indonesia to make business decision in investment, target market, and capital expenditures.
Benefits in Investing in Indonesia
The level of economic growth, natural resources, and abundant human resources in this world’s fourth largest population country offers promising business development. Here are beneficial aspect the country provides for you to invest in Indonesia.
- Business operations are easier every year
Indonesia made its way rise upward in the World Banks’s statistic of The Ease of Doing Business. Indonesia is now standing on the 91st position. A remarkable move compared to 2013 where the country is on the 128th position.
Some of indicators that contribute positive influence in making business easier in Indonesia are; easiness in business establishment, improving access in electricity, easiness in registering a property, engaging in cross-border trade, and improvement in contract establishment. It is an important reason to invest in Indonesia.
- More opportunities for more business classifications
The regulation of foreign ownership is revised every few years in Indonesia. The 2016 revision has determined a significant increase level of foreign ownership. Also, it has allowed many industries to open. For example, foreign investment now obtains 100% of ownership in property industry, compared to 0% in 2014. The industry of restaurant, café, and bar also allow full foreign investment ownership level. Previously, the regulation only provides 49 to 51% of ownership on those businesses.
- Land ownership for foreigners
Government regulation in the early 2015 that allows foreigners own property in Indonesia was a great support. Foreigners can own a land for three different purposes with these certificates:
- Right to build (Hak Guna Bangunan)
- Right of cultivation (Hak Guna Usaha)
- Right to use (Hak Pakai)
Hak Pakai gives the biggest advantage. With that certificate, a foreigner is allowed to have either a landed house or an apartment in Indonesia. However, foreigners have to fulfill these conditions to apply for the certificate:
- Having a PT PMA
- Having a local company
- Having a valid work and stay permit (KITAS)
- Natural resources
Abundant of natural resources such as gas and mining are available in Indonesia. Petroleum and mineral are the majority exports of the country.
- Political stability
Political stability support the rapidly growing economy in the country. As a young democratic nation, Indonesia has succeeded in maintaining political stability.
- The movement of corruption eradication
Corruption has been one of the major hurdles in Indonesia. However, this issue is now seriously dealt with. The Corruption Eradication Commission works to track corruption to set a cleaner economy in the country. Good news for investors, the Corruption Perception Index shows that Indonesia has a steady improvement.
- Rapid growth of the domestic market potential
The middle class in the country is growing fast and becomes an essential target for investors. They will be in consumer class by 2030. This huge market potential will contribute for an additional annual spending and the number of active, developed consumers.
- Demographic and urbanization
Indonesia is well known as the world’s fourth most populated nation. The already huge number will still increase ever year according to Worldometer’s statistic. The demographic shows that people in productive ages dominate the population. This means great numbers of people are available to operate business. Moreover, people under the age of 2 also construct the major population. Of course in coming years they will be in consumer class.
Indonesia has rapidly became an urban nation. Many people tend to move to cities and become consumer class. They seek for products and services. This is a big market potential for present and future investment.
- One of the biggest economy in Southeast Asia
As one of the country with the largest population in world, Indonesia efficiently become one source of economic strength in Southeast Asia. It is shown by the GDP graphic in recent years. Indonesia’s GDP graphic indicates a healthy improvement and notch it to be the biggest total GDP in the region.
