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Why Foreign Investor Should Consider Indonesia for Investment Even in Pandemic

Posted 6 months ago by JAC Consulting

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​Being a businessman may encounter you with the consideration to expand further and enhance with new market opportunity in another country. However, the decision to do it also comes with a handful of things to be considered. Easy-ness of administration, will your product be sold, and your company's future is several things to be considered. During a pandemic where uncertainties arise, establishing your company and investing in Indonesia is where you can find the settlement of your company's future. 

As a nation with the 4th largest population on earth and archipelago geographic condition, Indonesia provides a tremendous opportunity for foreign investment. More than 53% of people live in urban areas with a modern lifestyle and increasing purchasing power to many years ahead. Marketers and economic observers considered Indonesia as "Asia's next big opportunity" due to its rapid growth in the economy over the last decade. Specifically, more than 5% per year. Even in the most challenging pandemic, Indonesia still manages to have a good income from foreign investment. Reaching IDR 223 trillion in 2021 has increased 3.7% since 2020.

Besides, Indonesia has a bonus demographic and a growing middle class. Both terms might benefit your business to engage the market and absorb high skilled workers. Bonus demographic itself is a condition where productive people are more extensive than non-productive age. This circumstance leads to thousands of the person in the necessary to get a job. Because of the family planning program back in the 80s, by 2020 to 2035, Indonesia can enjoy "a window of opportunity" where there will be a productive batch of workers.

Other than that, in 2020-2035 will be recognized where the middle class of people is rapidly growing even further. According to McKinsey, over 90 million Indonesians will join the "consumer class" by 2030. In these circumstances, companies who do their business providing daily commodities will have a good chance in the market. Meanwhile, if the citizens have a higher level of disposable income and develop more sophisticated tastes, new opportunities will come in luxury goods.

Mentioned above are just the tip of the iceberg for your enlightenment in doing business in Indonesia. This discussion highlights several reasons you why should invest in Indonesia.

1. Free Trade Agreement

Indonesia is one of the members of the Association of Southeast Asian Nations (ASEAN), where the agreement among nations of the member is the application of minimal or zero tax. ASEAN connection will provide you a way to their member with no barriers or even the very minimum. Moreover, the ASEAN relationship may guide you to trade access to China, India, South Korea, Japan, Australia, and New Zealand. Indonesian traders can access more than 650 million of population and a combined GDP of US$ 2.9 Trillion.

2. Abundant Natural Resources 

As an archipelago country, Indonesia is blessed with tremendous natural resources. Tourism is one sector that attracts lots of people and many suit your business. Yet, Indonesia's wealth of natural resources shall allow you to grow in gas and oil export as one of the primary commodities that Indonesia shares.

3. Ease of Doing Business in Indonesia

Indonesia is one of a few countries that are relatively easy to be accessed and do business in it. According to the World Bank, where they rank up Group's Ease of Doing Business, Indonesia ranks number 73 in the world to do business. Rodrigo Chaves (Country Director of the World Bank) stated that establishing contracts, acquiring finance, paying taxes, and ease of cross-border trade are positive elements for doing business in Indonesia. 

The Indonesian government also created One Single Submission (OSS) to make the registration process for getting a business license easier. OSS is the Indonesian government's web-based platform to simplify business licensing in Indonesia. The process that used to take ten weeks now can be done within hours. Taking a turn to expand your business in a country with diversity in culture, highly skilled workers, and incredible natural resources gives tremendous economic potential. The Indonesian government also encourages investment by simplifying establishing a company which will make the chance to grow even more significantly. 

How JAC Consulting Can Assist Your Business

JAC Consulting has provided expert assistance in establishing business entities in Indonesia for many multinational companies operating within various industries. Many who are new to this process may feel overwhelmed by local language barriers and the complex bureaucratic steps involved. JAC Consulting provides comprehensive consultation from the beginning, starting with research on business feasibility and prioritization of compliance to government regulations. We ensure that the application process of establishment is as smooth and efficient as possible.

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