Indonesia 2014

New Information and Cultural Insights Entrepreneurs Need to Start a Business in Indonesia

Contents

Country

Current stats

• What is the size of Indonesia in square km? What is the distance (in km) from east to west? What is the distance (in km) from north to south?
• What is the total population of Indonesia? What are the top ethnic groups and religions as a percentage of population?
• What are the economic statistics of Indonesia? Gross domestic product (GDP)? Average income per-person? National debt? Growth percentage of last two years?

Quick history as it affects current business environment

• Give a short modern history of Indonesia - just enough for basic conversational knowledge and context.
• Give a short history of Indonesia’s last 5 years, focusing on aspects that would affect small business owners.
• How has the recent history of the country affected people in terms of their living and business environment?

2014 zeitgeist

• Give an overview of the current 2014 political, societal, and economic condition of Indonesia, focusing on aspects that would affect small business owners.

Near-future outlook

• What social changes in Indonesia seem very likely in the next five years?
• What economic changes in Indonesia seem very likely in the next five years?
• What political changes in Indonesia seem very likely in the next five years?

Relationship with other countries

• What is Indonesia’s relationship with Cambodia? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Malaysia? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Myanmar? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Philippines? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Singapore? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Thailand? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Vietnam? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with China? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with India? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with Australia? Cooperative or competitive? Similarities or differences? What is the main trade between the two?
• What is Indonesia’s relationship with the United States? Cooperative or competitive? Similarities or differences? What is the main trade between the two?

Culture

Mindset

• Describe the mindset of most people in Indonesia. Progressive or conservative? Future-focused or present-focused? Work-focused or pleasure-focused? Optimistic or cautious? Pressing for change, or maintaining traditions? Strict or easy-going? Or, if the mindset is very divided between groups, please describe the divide. (Feel free to just share your personal opinion.)
• What are some of the major internal conflicts that Indonesia is going through now? (Between political parties, age generations, demographics, ideologies, etc.) Summarize each side’s argument.
• Is it taboo to talk about Indonesia’s government?
• How would you describe the views of the general public about the government of Indonesia?

Religion and Race

• What role does religion play in day-to-day life?
• Are there any types of businesses that are not welcome or looked down upon due to religious reasons?
• How does religion affect business dealings? Times or days when people do not do business for religious reasons? Any religious rituals that businesses follow?

Asia 101

• What basic cultural norms do you think foreigners should know about working with people in Asia in general?
• What basic cultural norms do you think foreigners should know about working with people in Indonesia, as compared to Asia in general?
• What are some of the most common mannerisms when meeting with people?
• When people go out to eat or drink together, how is it decided who pays? (Describe business and personal situations separately.)

Individualism

• As compared to American individualism, Indonesia is more of a community/group-focused culture. Describe these differences from a local point of view.

Local differences

• What are the cultural differences between people in Indonesia and Cambodia?
• What are the cultural differences between people in Indonesia and China?
• What are the cultural differences between people in Indonesia and India?
• What are the cultural differences between people in Indonesia and Malaysia?
• What are the cultural differences between people in Indonesia and Myanmar?
• What are the cultural differences between people in Indonesia and Philippines?
• What are the cultural differences between people in Indonesia and Singapore?
• What are the cultural differences between people in Indonesia and Thailand?
• What are the cultural differences between people in Indonesia and Vietnam?
• What are the cultural differences between people in Indonesia and the United States?

Personal attitudes towards foreigners

• How do people view foreign tourists in Indonesia?
• What is the common opinion about foreign workers, coming to Indonesia to work? Is it a business threat? Is it a cultural threat?
• What is the common opinion about foreign entrepreneurs, coming to Indonesia to set up a business?
• Which foreigners are generally most welcome? Which foreigners are generally least welcome?

What to wear

• What is the most appropriate business/meeting clothing for men in Indonesia? What would be considered too casual or disrespectful?
• What is the most appropriate business/meeting clothing for women in Indonesia? What would be considered too casual or disrespectful?
• How can you tell by their clothing that someone is high-status or low-status?

Attitude towards time and promises

• What is the Indonesia attitude towards punctuality? For example, if two people agreed on an 11:00 business meeting, what time range to arrive would be considered acceptable? What is considered late?
• What is the Indonesia attitude towards promises? Are you expected to stick to your promise, no matter what? Or is it common to change your mind?

Common conversational references

• What is a common Indonesia expression that a foreigner might not understand?

How to blend in

• How can a foreigner blend in to Indonesia? What advice would you give foreigners on how not to stick out so much?
• How can a foreigner become a part of the business community in Indonesia? What is a good way to meet many people and make connections?

When not to blend in

• Is it best for a foreigner doing business in Indonesia to blend in? Or is there an advantage to not blending in?

Recommended reading/watching

• What books, magazines, newspapers, or websites would you recommend a foreign entrepreneur read to better understand Indonesia and its business environment?

Life

Quality of life

• Describe the general quality of life in Indonesia (Utilities, cleanliness, safety, amenities, physical comfort.) If very different in different areas, describe each separately.
• Which parts of Indonesia have the nicest quality of life? Which parts have the worst? Describe each.

Cost of living

• What is the average cost of rent for a 1-bedroom (unfurnished) apartment? What is the average cost for an unfurnished small house (or large apartment) for a 5-person family?
• What would it cost per-month for one person to live a nice, but not luxurious, life in Indonesia? Include food, utilities, transportation.
• What length of time is a usual contract when renting an apartment or house?

Western standards vs local standards

• How does the general quality of life in Indonesia compare to America, Australia, or Europe? (Utilities, cleanliness, safety, amenities, physical comfort.)
• What safety precautions would you recommend for a foreigner?

Language / English proficiency

• Do most people in the cities of Indonesia speak English?
• If someone came to Indonesia only speaking English, how difficult would it be to live and work?
• Is it common for merchants to charge foreigners more if they speak in English?

Safety

• Which parts of Indonesia are safest? Which parts are unsafe? Describe each.
• How do people in Indonesia deal with petty crimes like theft?
• How can one generally distinguish friend from foe? Any signs to consider, or scams to beware of?

Immigration / Visa

• How can a foreign entrepreneur live and work in Indonesia for a few years? Do they need a work visa, investor visa, tourist visa, or something else?
• How can someone get a visa to live in Indonesia long-term?

Where to live (short-term and long-term)

• What are some serviced apartments or furnished homes in the business district that can be rented month-by-month, for short-term (say 3 month) visits? Give examples and prices.
• Where should someone live to be in the middle of the most business, the most action, and to meet the most people? What specific neighborhoods?
• Where should someone live to be near to the business action, but to be a little outside, in a neighborhood that’s better for children?
• What are some places a foreigner should not stay, because of their lack of proximity, safety, or other reasons?

Typical living arrangements

• What is a typical living arrangement in Indonesia? Do most people live in houses or apartments?
• Do families usually live together with parents, grandparents, kids, and siblings - or do they tend to live separately?

Transportation

• How do working people normally get around? (Car? Bus? Train? Taxi? Bicycle? Walk?)
• What is the recommended transportation for someone coming to work in Indonesia? (Car? Bus? Train? Taxi? Rented car? Please describe options, prices, and recommendations.)

Internet / Phone

• What are the most popular mobile phone/data providers in Indonesia? Which one would you recommend?
• How much does it cost for a basic broadband (cable/fiber) internet connection in a home or office? Name speeds and prices.
• How much does it cost for a mobile data plan (3G) for heavy internet use through a mobile phone? Describe the current best plans.

Food

• What’s the typical cuisine of Indonesia?
• Is it easy to find western food? Are there western restaurants? Western food in supermarkets?
• What’s the etiquette of using your hands or utensils for eating? Any inappropriate manners that foreigners often have?

Credit card? Cash? Check?

• How do most people pay for things? Cash? Credit card? Check? Something else?
• What is the easiest way to get cash in Indonesia? Are ATMs the best option?

Availability of products/services

• What goods and services that Western people are used to are not available in Indonesia?

What’s not online

• What kinds of day-to-day necessary things do people do online? (Meaning: not just fun/social, but like online banking, shopping, paying bills, using maps/location services, etc.)

Differences in service standards

• What’s the difference in customer service between US/Australia/Europe and Indonesia? More service? Less service?
• Is good customer service a necessary part of successful business dealings?

Expat community

• Are there a lot of foreign expats in Indonesia?
• Where do expats live in Indonesia?
• Where do expats hang out in Indonesia?

Recommended resources

• What are some good books that describe the life and culture of Indonesia?
• What are some good internet resources that help describe life in Indonesia?

Business Culture

Mindset

• Summarize the business mindset of people in Indonesia. Ruthless? By-the-book? Improvisational? Considerate?
• Are there any particular business dealings that foreigners should not get involved in?

Understanding “face”

• Foreigners sometimes don’t understand the Asian concept of “face” (dignity / prestige). How would you explain “face”?
• How is “face” (dignity / prestige) a part of Indonesia business culture? Give examples.

Direct vs indirect communication

• Give examples of direct (saying exactly what is meant) versus indirect (gestures, avoidance, vague language) communication style in Indonesia.
• Is direct communication (saying exactly what is meant) considered rude?
• How can someone understand the meaning behind indirect communication? Any hints to help translate?

How to tell “yes” from “no”

• People used to very direct communication find it hard to understand when someone with a more indirect communication style has told them “yes” or “no”. Give examples of some indirect statements that actually mean “yes”, and indirect statements that actually mean “no”.

Hierarchy

• How important is hierarchy in business in Indonesia?
• Is it disrespectful for a foreigner to deal in business with a certain class of people?
• Give an example of a business situation where the norms of hierarchy are not followed, (by a foreigner who doesn’t understand), and explain how they should be followed according to the norms of Indonesia.

Who to speak with in organizations

• When a foreigner wants to do business with a Indonesia company, who should they contact? Go directly to the top? Start in the middle?
• Are personal recommendations important in doing business with new companies or can they be reached purely on a basis of business?

Business attitudes towards foreigners

• What is the general attitude of businesses in Indonesia towards foreigners coming to Indonesia to do business?

Signals of respect

• What are some social etiquette actions that show respect for someone?
• What are some social actions that would be taken as disrespectful?
• How do people in Indonesia express anger? Do they usually stay quiet or express their feelings openly?
• How do people view laughter in Indonesia? What kinds of jokes are not acceptable?

How to build trust

• How can a foreigner doing business in Indonesia build trust with local businesses or people?
• Is it important to make local friends in order to spread your business?

Introductions

• What is the standard polite way of doing business introductions? (If someone asks you to introduce them to another business person you know.)

Business cards

• How important are business cards (name cards) in Indonesia? Do most people have them?
• What is the standard business card format in Indonesia? What information goes on it? Bi-lingual with one language on each side?
• Are there proper manners for how to give your business card to someone, and how to receive someone’s card?

Negotiation

• Give some insight and advice about business negotiations in Indonesia.

Signaling success

• How can you tell that a person is successful? Clothing? Manners? Neighborhood? Events? Friends?

Innovation vs status quo

• Do you feel that business is Indonesia is attracted to innovation, or attracted to the status quo?

Passing-through vs Full-time

• Is there a stigma against business people that are just passing through Indonesia, looking for opportunities, versus foreigners who live there?
• What advantages do foreigners who live full-time in Indonesia have over those who just visit?

Advantages to foreigners

• What advantages do foreigners have (versus locals) when doing business in Indonesia?

Advantages to locals

• What advantages do local people have (versus foreigners) when doing business in Indonesia?

Risks

• What are the top risks of doing business in Indonesia?

Corruption

• How pervasive is corruption in business in Indonesia? Can you give some examples? (Change the details to protect people.)

Government

General role of government

• How involved is the government in the dealings of small business?
• Is the government of Indonesia open to foreign businesses or restrictive?

Who’s who: departments you need to know

• What government departments will a small business probably need to interact with? Please describe each.
• What are some government regulations that need to be considered by foreign businesses?

What the government is emphasizing now

• What sectors is the government emphasizing development now? Any current mission or push?

Incentives

• What government incentives are available to new or small businesses now?
• Do many small businesses use government incentives?

Grants

• What government grants are available to new or small businesses now?
• Do many small businesses use government grants?

Business Setup

Ease of doing business

• How does Indonesia rank on the “Ease of Doing Business” index?
• What’s the hardest part about doing business in Indonesia?
• What’s the easiest part about doing business in Indonesia?

Local partners?

• If a foreigner is starting a business in Indonesia, is it required to have a local partner? Or does the government allow foreign-controlled businesses?

Business structure choice

• What are the options for business structures in Indonesia? (Sole proprietor? Partnership? Corporation? Other?)
• What are the advantages and disadvantages of each kind of business structure in Indonesia?

Business name choice

• Any advice on naming a business in Indonesia? Are English names OK, or should they be localized?
• What are some mistakes that foreign businesses have made when naming a business in Indonesia?

Timeline

• How long does it generally take to incorporate a business structure in Indonesia?

Cost

• What does it cost to incorporate a business structure in Indonesia? (Including all service fees, helper fees, government fees, etc.)

Incorporating

• How does a foreigner create a business structure in Indonesia?

Where to locate

• How should a new business decide where to locate in Indonesia?

Real estate

• How much does it cost to rent a typical 4-person office space in Indonesia? Give a range from center-city expensive to outlying-area cheap.
• Can a foreign investor easily buy property for business in Indonesia or renting is the only option?

Big city vs outlying areas

• What are the advantages and disadvantages of locating a new business in the big city versus the outlying areas?

What your location says about your business

• Does business location (center of biggest city versus outlying areas) communicate something about the business itself?
• Which neighborhood or street has the most prestige?

Utilities

• How can a new office get set up with electricity, internet, phone, and other important utilities? Describe the utility companies and summary of process for each.
• Will a foreigner have a problem getting utilities for the business? If so, what solution would you recommend?

Permits

• How can a new business find out which permits are necessary to do their business?
• How can a new business get all the permits they need?

Contracts

• Are contracts respected in Indonesia? Or are they often ignored if need be?

Lawyers

• Which lawyers or law firms are best to help foreign entrepreneurs in Indonesia?

Accountants

• Which accountants or accountancy firms are best to help foreign entrepreneurs in Indonesia?

Paying taxes

• What are the current tax rates for businesses in Indonesia?
• Are the taxes different in different regions in Indonesia?
• How do business owners pay their taxes?

Ongoing requirements

• Besides paying taxes, what ongoing maintenance bureaucracy is required by the government for small businesses?

Recommended resources

• What books describe doing business in Indonesia?
• What internet resources help someone doing business in Indonesia?

Hiring

Local talent strengths

• What are the main strengths of the local talent in Indonesia? Any particular skills or fields more developed or emphasized?

Hiring local people

• What is the best way to hire local employees?

How much to pay?

• What is the average salary for a mildly skilled worker in Indonesia? (Say: basic administrative tasks.)
• What is the average salary for a very skilled worker in Indonesia? (Say: an experienced manager.)

How to find good people?

• What’s the best way to find and hire exceptionally smart and talented workers in Indonesia?

Online vs offline

• How much of the finding and hiring of employees is done online? Is it rare or common to have job openings posted online?
• What websites do people use for posting jobs / finding jobs / hiring employees?

Hiring foreign people

• How can a Indonesia business hire a foreign employee? What are the requirements, steps, costs, and time?

Step-by-step process

• What processes or documents are required for hiring an employee?

Labor laws

• What hours do most people work? (9am-5pm?) What days do most people work? (Monday-Friday? Also Saturday?)
• Is it very common to work overtime? (Extra hours at night, or extra days per week?)
• Give a summary of the most important labor laws in Indonesia - that a small-business employer should know.

Payroll

• What processes or documents are required for paying an employee? Do taxes need to be withheld or paid? Any ongoing forms to file?

Unions

• Are there labor unions in Indonesia that will affect employees of small business?

Firing

• What processes or documents are required for firing an employee?

Recommended resources

• What local companies or people can help with hiring?

Money

Banking overview

• Give an overview of the availability and quality of small-business banking in Indonesia.

Bank comparison

• Compare the top three choices for small business banking in Indonesia. Funds required? Costs? Online access? Visa/Mastercard debit card given?

How to open an account

• What requirements do the banks have for opening a business account?
• Any additional requirements for a foreigner to open a business bank account?

Online banking

• How much of banking can be done online? Outgoing payments? International wires (telegraphic transfer)?

Paying employees

• What is the usual way for a business to pay employees in Indonesia? What payment method and how often?

Paying vendors

• What is the usual way for a business to pay vendors in Indonesia? Bank transfer? Paper check? Visa/Mastercard?

Getting a bank loan

• How can a small business get a bank loan in Indonesia?

Getting investors

• How can a small business get investors in Indonesia?

What if they don’t pay?

• What legal procedures should be followed to ensure that customers pay as promised?
• If customers don’t pay, what methods are used to get them to pay?

Industry sectors

Industries

• What are the main exports of Indonesia?
• What industries are very well-developed in Indonesia?

What’s missing?

• What industries are not very well-developed in Indonesia, and have much room to grow?
• What useful services or products are missing in Indonesia now?
• What industries have the most opportunity in Indonesia right now?

What’s unique?

• What services or products are unique to Indonesia? Any particular business or service that exists in Indonesia, that you’ve never heard of anywhere else?

Growing the Business

Marketing

• What methods do local businesses use for marketing their business?
• What language should local marketing use?

Expanding outside the country

• Do many businesses in Indonesia expand outside the country?
• What are the best ways to sell local products from Indonesia to other countries?
• Are there any government regulations concerning exports?
• What are some of the ways to open a franchise in Indonesia?
• Can investors transfer their existing business in Indonesia?