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Doing Business in Indonesia
Topics:
Investment Climate, Discipline, Take your time, Contracts,
Maintenance, Be Seen, Procedures,
Personal Relationships, The Unseen
Have a look at our Indonesian History page.
Indonesia Business Links
abnamro (ABN-AMRO Bank's
Indonesian branch)
bca (Bank BCA, one of the most popular consumer banks)
bi.go.id (Bank Indonesia with an English section)
bii (Bank International Indonesia)
bni (Bank Negara
Indonesia)
bri (Bank Rakyat
Indonesia has branches even in the most remote villages)
citibank (Citibank's Indonesian
branch)
danamon
(Bank Danamon)
indoexchange (market and financial information)
hsbc.co.id (HSBC's Indonesian branch)
imq21 (real time
Indonesian stock quotes and
currency exchange rates)
jsx.co.id (Jakarta Stock Exchange
-largely in Bahasa Indonesia)
antheusd (organizers of business
promotion events in East Java, such as Indonesian City Expo and Pameraya
Surabaya)
bisnis (business information in
Indonesian)
central-java.
(Central Java Investment Board)
CVMakmurLestari
(Everything you need for organic agriculture -this site is in Indonesian only)
JatengPromo (Central Java
promotion -only in Indonesian)
ekon.go.id (Department of Economy's
reports; click on English News)
expat-workshop (the only regular
permits for expats workshop in the country New!
indocompanies (directory of
companies with products ranging from furniture to software to crayfish)
indonesia-design
(online export market channel
for Indonesian exporters of home decoration products)
Indotaxcenter (one stop tax and
customs information)
jogja-export. (Jogja-Export
combines a number of producers of rattan, bamboo, wood, silver and batik
paintings, handicrafts and furniture)
juniorchamberd (Junior
Chamber Indonesia)
kadin.net.id (Chamber of
Commerce, the site is mostly in Bahasa Indonesia, but has a buyer-seller section
in English)
Metro Tanah Abang (producers of kids
clothing, wholesale and retail)
narmalatextiles (wholesale
Indonesian textiles)
okusi.net (service agent to help you
with visa applications, business services, investments, real estate and more)
tradeindonesia (extensive
B2B forum, also in Dutch and German)
us-asean (business oriented
site: US-Indonesia ties)
yellowpages (Indonesia
Yellow Pages -English and Indonesian, but site works very slowly)
Indonesia's Investment Climate
Indonesia's government is making steady progress in attracting foreign
investors through a conducive investment climate. There are numerous opportunities for large and small investments in
any of the economic sectors.
Despite these efforts, widespread corruption remains a major
obstacle. Also legal protection for (foreign) entrepreneurs is an issue,
as is the tax system that can be interpreted and applied in different ways.
For all those reasons the successful business person should make several
trips to Indonesia to test the waters, talk with those who have gone before and
establish a good relationship with the local business community and relevant
government institutions and trade organizations.
There are agencies, such as Okusi
Associates, providing professional assistance.
Talk with your Embassy and don't hesitate to hire a good Indonesian lawyer.
Discipline in
Indonesia
Doing business in Indonesia and working together with Indonesians is not much different from doing so in other countries.
Unfortunately Indonesians and Indonesian business people still bear the stigma of being undisciplined. It is believed that they always show up late
for appointments or not at all and like to change agreements after the signing of the contract.
Some of that may have been true. But things are changing fast in Indonesia. On time arrival for appointments, honoring commitments
and living up to expectations are now accepted practices.
You may improve the situation further by taking into account a few more
points:
Take time, lots of
time
Time is fast becoming a scarce commodity, also in modern Indonesia. Yet, you will need lots of time in getting to know your Indonesian business partners: building up a
strong personal relationship with them is considered
more important than the deal itself.
The bottom line is: become friends. Doing business successfully without
being friends is one of the most difficult things to accomplish.
In Indonesia it is not done, in general, to be blunt or too direct. As part of
your first-time business meeting in Indonesia it is not a bad idea to invest
time and money in a cross-cultural training. If it is a good training program
you will be introduced to the notion of tidak enak (not nice, not tasty
and also doesn't feel good). Indonesians often feel that it doesn't feel good to
say what is on their mind. It might offend the other party and make him or her
loose face. The result is that you may think the deal is done, while in fact
your partner is not in full agreement with all the terms. You will find out
later when those parts of the agreement are ignored or cause problems.
From your part it is good to hold on to being as outspoken and direct as you
would be in a business meeting at home.
It is absolutely impossible to fly in, do a quick deal and fly home again before the weekend.
The result will be very disappointing.
More on this topic in our recommended travel and culture book Enjoying
Indonesia
Contracts
Any contract is only a number of sheets of paper. Although officially signed on
meterai (tax stamps), in essence they remain just that: paper.
To ensure that the deal goes as agreed you need to rely not only on the personal relationship
you have cultivated with your business partners, but also on frequent
follow-ups.
Send email, make phone calls and, most important of all, make
regular visits to your business partner.
Maintenance
Attention to details is all important: Indonesia has been cash strapped for so long that a work mentality has developed in which 'fixing things' has become highly accepted.
The need for maintenance is almost always overlooked or ignored. Instead, one waits until something breaks down and only then tries to fix it. If there is no fix, the tool, machinery or object remains as it is: broken.
Budgeting and regular training for quality management and maintenance are essential. Ensure that the maintenance budget is actually used for that purpose and not siphoned off.
Be Seen
Many problems can be avoided with very little effort.
If you have your office or factory in Indonesia, make a point to be seen and be heard: get out off your office regularly and
spend some time on the work floor several times a week. Look at the production process, ensure that quality is delivered.
Build a
supportive relationship with as many of your workers to ensure that they understand what you mean with quality. Chat and joke with them, be interested in them. Solve problems with them.
Don't ever raise your voice, but solve issues behind closed doors.
The secret is to become a real and caring bapak (father figure) or ibu (mother figure).
Procedures
Procedures in Indonesia are rather bureaucratic. They are also rather
complicated and often difficult to comprehend.
Many formalities require going to offices, standing in line, filling out forms,
and paying fees (sometimes you will not get receipts).
Living in Indonesia, of course you will have staff to take care of all that, but still you may need more time to get things done than you had
anticipated.
Fortunately there are several agents to help you obtain visas and all sorts of
permits, even to set up your own company and in general to help you make a trail
in Indonesia, including Okusi
Associates.
Personal
Relationships
As with business relations, building relations with officials pays: unfortunately Indonesia ranks very high on the
international corruption list.
Somehow you will have to develop ways to reduce the amount of corruption you are exposed to.
One way of doing that is to build relationships with officials you have to deal with regularly.
Such as at the Immigration office, the Home Department, customs officials (if
you are importing or exporting) and even the sub-district office in the city or
town of residence.
Establishing and maintaining high business values and norms, and high standards of accountability and honesty are other ingredients of doing business
successfully, but possibly slower than you wish.
The Unseen
There is a different reality in Indonesia few expatriates consider a serious
issue. It is magic, sorcery, witchcraft; the unseen world of good and evil
forces.
Modern Indonesian businessmen alike may shrug it off as old fashioned rubbish.
Yet, very little is needed to upset someone seriously enough and bring him or
her to consult a master in witchcraft, with the objective of casting a
curse on you or your family.
Take some time to ask people to tell something about guna-guna and ask
if they have had any experience with it.
Although the tales may sound unrealistic, it is better to be safe than sorry.
The Unseen is a factor you might as well reckon with.
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