Doing Business In Indonesia

  1. Indonesia’s overall Doing Business 2013 ranking is 128 out of 185 economies, recording an increase of 2 points compared to last year. This improvement reflects an 11 point increase in the Getting Electricity indicator.
  2. According to the latest Enterprise Surveys (2009), Access to Finance, Practices of the Informal Sector, and Political Instability represent the top 3 obstacles to running a business in Indonesia. 65.1% of firms report competing with unregistered or informal firms, compared to the regional average of 50.1%. Only 18.2% of firms them report having a line of credit or loan from a financial institution, compared to the regional average of 40.4%.
  3. Indonesia’s economic freedom score is 56.4, making its economy the 115th freest in the 2012 Index. Its score is 0.4 point better than last year, with improvements in half of the 10 economic freedoms including monetary freedom and the control of government spending. Indonesia is ranked 23rd out of 41 countries in the Asia–Pacific region, and its overall score is below the world average.

Source: World Bank


Visa Information

Business Etiquette

Business Cards

. Business cards are normally exchanged after the initial handshake and greeting. 
. Business cards should display your title. This helps enhance your image and credibility. 
. Although not required, having one side of your card printed in Bahasa shows respect. 
. Give/accept cards using two hands or the right hand. 
. Examine a business card you receive before putting it on the table next to you or in a business card case. 
. It is important to treat business cards with respect. 

What to Wear?

. Business attire is generally conservative. 
. Women should dress conservatively ensuring that they are well covered from ankle to neck. Tight fitting clothes are best avoided.
. Remember it is hot, so cotton or at least light clothing is best. 

Communication Styles

. Indonesians are indirect communicators. This means they do not always say what they mean. It is up to the listener to read between the lines or pay attention to gestures and body language to get the real message.
. Generally speaking Indonesians speak quietly and with a subdued tone. Loud people would come across as slightly aggressive.  
Business is personal in Indonesia so spend time through communication to build a strong relationship. Dealing with someone face-to-face is the only effective way of doing business.
. Indonesians abhor confrontation due to the potential loss of face. To be polite, they may tell you what they think you want to hear. If you offend them, they will mask their feelings and maintain a veil of civility. If an Indonesian begins to avoid you or acts coldly towards you, there is a serious problem. 

Business Meetings

. Initial meetings may be more about getting-to-know-you rather than business. Do not be surprised if business is not even discussed.

. It is common for Indonesians to enter the meeting room according to rank. Although you do not have to do this, doing so would give a good impression.
. Indonesians do not make hasty decisions because they might be viewed as not having given the matter sufficient consideration. Be prepared to exercise patience.
. "Jam Karet" (rubber time) describes the Indonesian approach to time. Things are not rushed as the attitude is that everything has its time and place. Time does not bring money, good relations and harmony do. 
. If negotiating, avoid pressure tactics as they are likely to backfire.

General Business Hours

Government office hours are variable, but are generally 8am to 4pm Monday to Friday (with a break for Friday prayers from 11.30am to 1.30pm), and 8am to noon on Saturday. Go in the morning if you want to get anything done.
Private business offices have staggered hours: 8am to 4pm or 9am to 5pm Monday to Friday, with a lunch break in the middle of the day. Many offices are also open until noon on Saturday.
Banks are usually open from 8am to 4pm Monday to Friday, although they can close as early as 2.30pm. In some places banks open on Saturday until around 11am. Banks in many areas also close during Friday afternoon prayers. The foreign-exchange hours may be more limited and some banks close their foreign-exchange counter at 1pm.
Shops open at around 9am or 10am. Smaller shops may close at 5pm, but in the big cities and in Bali, shopping complexes, supermarkets and department stores stay open until 9pm. Sunday is a public holiday but some shops and airline offices open for at least part of the day.
Restaurants generally open from between 7am and 10am in the morning and remain open until 11pm, or whenever business dries up.