Republic of Indonesia

Indonesia is considered as the sleeping tech giant of Southeast Asia, with more than 95% of Indonesia’s businesses in the category of startups or small and medium-sized companies.

The government has 4 ministries appointed to coordinate all entreneurship-related issues in the country, such as providing resources, network capital and mentorship to Indonesian startups.

The biggest challenge faced by the business sector is the government’s introduction of local content requirement and data localization policies, or what investors say as innovation mercantilist policies. These policies are considered as repressive policies similar to the failed protectionist policies of Indonesia’s past political economy and which are counter-productive in the government’s agenda to build up Indonesia’s e-commerce and high-tech sectors because it will overlook the opportunity to raise productivity in all sectors in favor of just a few selected ones.

Investors expect the government instead, to learn and look up to the Silicon Valley key features, i.e. competition and openness, rather than implementing rehashed policies that are trade-distorting and damaging to the entire global innovation system, and are formidable obstacles to reform and growth of the country’s economy.

In the ICT sector, the outlook looks very positive but there are key obstacles that service providers must overcome to gain deeper penetration into the private sector market.

• Market Education. Understanding of ICT technology remains low, particularly among small and medium businesses.
• Public perception: a survey by the Institute for Development and Empowerment of Information (LPPMI) of 100 firms on their main concerns towards the implementation of cloud computing showed that security issues were cited by 31.9% of respondents followed by reliability with 21.65%.
• Need for improved telecommunication infrastructure to enhance bandwidth in Indonesia as well as supporting government regulations for the industry.

Realizing Indonesia’s potential as a major ICT market relies on the government making headway on fundamental infrastructure projects such as increasing electricity supply and a nationwide broadband network. These foundations and greater market awareness will give companies will have the confidence to invest in their ICT systems for both hardware and software to support business growth.

Indonesia’s business-to-consumer e-commerce sector recorded a total saes of US$2.6 billion in 2014 and the country is projected to have one of world’s fastest rates of online sales growth.

Despite harsh conditions, investors have found Indonesia to be an appealing tech market and consider the country (the 4^th largest country by population) as a sufficient market in itself and have no problem with domestically focused companies. This is evident by the continuous investments coming in and the productivity of local startups, even without assistance from government:

• Investments in Indonesian start ups by Yahoo Japan Capital, a venture capital subsidiary of Yahoo Japan, Singapore’s Majuven and Indonsia-based Lippo Digital Ventures
• Establishment of cloud computing networks for schools and university campuses
• Strengthening of tech portfolios of US-based 500 Startups, Singapore’s East Ventures and Indnesia’s Emtek
• Indonesian startups foreign funding: Tokopedia was able to raise US$100 million from foreign investors led by SoftBank; Bukalapak and Elevenia received foreign investments over the last 2 years to fund local expansion
• Other Indonesian startups have began expanding beyond Indonesia and have been gaining traction overseas and millions of users worldwide.

Indonesia’s market economy is heavily influenced by its government, with over 164 state-owned enterprises under its management.

The whole archipelago is tropical, with temperatures at sea level between 21˚C and 33˚C, although its cooler in the mountains. The year divides into a wet and dry season: November – April are the wet months (Jan and Feb the wettest); May – October are dry season. However, in northern Sumatra, this pattern is reversed. The peak season is between mid-June and mid-September and again over the Christmas and New Year season. Resorts and hotels can get fully booked and prices are much higher.

• Jan 1 – New years Day
• Feb 8 – Chinese Lunar New Year
• March 9 – Bali’s Day of Silence and Hindu New Year
• March 20 – March Equinox
• March 25 – Good Friday
• March 27- Easter Sunday
• May 1 – International Labor Day
• May 5 – Ascension Day of Jesus Christ
• May 6 Ascension Day of Prophet Muhammad
• May 22 – June Solstice
• Jul 6 – Joint Holiday Afetr Idul Fitri
• Jul 7 – Second Joint Holiday After Idul Fitri
• Sep 12 – Muslim Day of Sacrifice ( Idul Adha )
• Sep 22 – September Equinox
• Oct 30 – Diwali/Deepavali
• Dec 12 – The Prophet Muhammad’s Birthday
• Dec 21- December Solstice
• Dec 24 -Christmas Eve
• Dec 25 – Christmas Day
• Dec 26 – Day after Christmas Day
• Dec 31 – New Year’s Eve

Government offices are open from 8 am to 3 pm. On Fridays, closed at 11:30 am. Saturdays, they are open until 2 or 3 pm.

Business offices open from 8 am or 9 am to 4 pm or 5 pm. Some work half day on Saturdays. Banks open from 8 am to 3 pm on weekdays. Banks are closed on Saturdays. Money changers open longer hours till the evening.

Indonesia is divided into three time zones

Western Indonesia Time (Sumatra, Java, West and Central Kalimantan) is seven hours ahead of GMT

UTC +7:00

Central Indonesia Time (Bali, South and East Kalimantan, Sulawesi and Nusa Tenggara) is eight hours ahead

UTC +8:00

East Indonesia Time (Maluku and Irian Jaya) is nine hours ahead.

UTC +9:00

Business visa:

Requirements:

• Two supporting letters each from the applicant firm and sponsor/counterpart in Indonesia setting out the reason and duration of the proposed visit and responsibility for accommodation/maintenance costs.
• Copy of written approval from the Immigration Office in Indonesia should the duration of business exceed 60 days.
• Itinerary Ticket. To attend a conference/seminar: A letter/invitation from the conference host setting out details, including nature, duration and programmed of the conference/seminar.

Single Entry

Maximum length of stay is 60 days· Extensions can be applied for and obtained in Indonesia from the Immigration Authorities.

Multiple Entries

Issued upon authorization of the Immigration Office in Indonesia.  The applicant’s counterpart in Indonesia should apply locally on his/her behalf. Based on a written approval from the Immigration Authority, the applicant will then apply for the issuance of visa by submitting the required documents

Note:

• Visas are Valid for up to 12 (twelve) months.
• Applicant’s business sponsor in Indonesia needs to apply locally or his/her behalf.
• Applies for business purposes only.
• Validity of visa will be three months from the date of issue.
• Visa is issued within five to six working days from receipt of application provided that all documents are in order.

Visa Fees

Visa on arrival: US$35

Exit tax : IDR150,000-200,00 (US$10.96-14.61)

Official Currency: Rupiah (Rp)

Currency code: IDR

Exchange Rate: 1 IDR=US$0.000076 (1 US$ = IDR13,685)

1IDR=0.00007 Euros (1Euros = IDR 15,296.4)

The official language of Indonesia is Bahasa Indonesia ans is spoken by more than 23 million people in the country. Formal education and other forms of communication are done in Bahasa Indonesia, but English is also widely spoken by the local people of the country.

There are over  725 languages spoken in Indonesia. The regional languages actively spoken in Indonesia are:

• Rejang(South Sumatra)
• Dairi(North Sumatra)
• Toraja(South Sulawesi)
• Lampung(South Sumatra)
• Makassarese(South Sulawesi)
• TobaBatak (North Sumatra)
• Sasak(Lombok)
• Banjarese(South Kalimantan)
• Acehnese(North Sumatra)
• Balinese(Bali and Lombok)
• Buginese(South Sulawesi)
• Minangkabau(Central Sumatra)
• Javanese(Java)

Besides education and media, Bahasa Indonesia also dominates as the language of modern business.