Get an overview of the Indonesian economy, sectors, trade barriers and business culture
The Indonesian Market
The Indonesian market is one of the largest in the world. According to projections it will be the 7th largest economy in 2030 and the Indonesian middle class will exists of 135 million Indonesians. Today Indonesia has just passed 250 million inhabitants. At the same time ASEAN, with Indonesia as the largest player, continues evolving and improving and the strengthened cooperation between the member states has had and will continuously have a positive effect on the region's economic situation.
Many years of impressive economic growth in Indonesia have not only resulted in enormous gains but it has also led to new and rising challenges e.g. a growing demand for energy, increasing pressure on natural resources, environmental degradation and infrastructure bottlenecks. These challenges have created a rising demand for smart, efficient and sustainable solutions to secure inclusive and sustainable economic growth for the present as well as future generations. Challenges, that Danish companies and institutions, expertise and technology are particularly well-equipped to address.
Danish competences are in demand
The sectors particular interesting to Danish companies are the ones where Danish competencies can fulfil the Indonesian demand. In several areas Danish know-how is needed, but especially in the following six sectors. These sectors are also the focus areas in Growth Strategy Indonesia:
- Cleantech – environment, green growth, renewable energy and energy efficiency
- Food industry and technology
- Design, luxury and consumer goods
Indonesia is a member of the WTO, but a foreign company will still, to some degree, meet trade barriers and general market barriers like:
- Barriers in connection to the culture and language
- Difficulties in finding the right partner
- Intellectual Property Rights (IPR)
- Technical barriers
These areas are under continuous change and many incentives are taken to improve the situation. The commercial department has a big insight to where you as a company face these problems and the commercial department can also assist you in relation to market opportunities. Kindly contact us, if you are interested in Indonesia, and we can inform you on the newest situation.
Find our contact details here.
The Trade Council in Denmark can also be useful regarding trade and market barriers and export technical advice which consists of advice on customs duty, tariffs, import licenses etc. You can learn more about our services here.
When doing business in Indonesia, these are some good advices:
Be patient and persistent and have time. It is necessary with patience, time and persistence. Agreements are seldom signed at first meeting.
Get a good local advisor. It is important with a partner who understands and has experience with the foreign set of rules.
Be aware of the differences and use your understanding of the local norms, as well as your respect for the culture, as a strength.
Nurture personal relations. It takes a lot of phone calls and emails to build up a network in a business culture where you do not always get feedback the same day.
Hold back the sales attitude. Indonesians do not like too sales oriented people as it is seen as degrading. They expect seriousness and quality.
Think about your expenses. Be careful about hidden expenses and take taxes and Indonesian collective agreements into account.
Be careful with rewards. Even if the goals are not reached Indonesians expect to get bonuses. Do not underestimate this.
Invite your partner to Denmark. Partners should see the country of origin of the company they work for.
Hold on to your partner if it is the right partner. Indonesians are not afraid to find a new partner.
Even though you meet smiles and happiness it does not always mean that you agree. But that does not mean you can’t be friends.
Stationing in Indonesia demands a lot of preparation, and we recommend visiting the webpage www.expat.or.id which contains several information related to how it is to work in Indonesia, including real estate market, school system, illness and healthcare, visa, work permit, security, culture and language. Regarding visa we also recommend you to visit the Embassy of Indonesia in Copenhagen.
Associations in Indonesia
In Jakarta there are many national associations that expatriates can use to meet other Danes or Scandinavians. One of them is Nordic Club Jakarta with members from Denmark, Norway, Sweden and Finland. Visit Nordic Club Jakarta's website. Another association is Danish Business Association, an association of Danish business activities in Indonesia. Visit Danish Business Association's website.