With its large territory, tropical climate, and abundance of natural resources such as oil, minerals, timber and raw or semi-transformed agricultural products, Indonesia has been steadily attracting foreign investment.
Aware of this, the Indonesian government has been aiming to transition the country’s industry towards a more modern, industrial and service-oriented economy by steering the economy away from its dependence on exports of raw materials. These plans include policies to develop new infrastructures and long-term and sustainable growth through business-friendly taxes.
The government has also been transforming large cities into specialised industrial and service hubs for machinery, electronics, automotive and auto parts. Indonesia aims to boost its tourism and hospitality sector, which notably includes several UNESCO world heritage sites.
The penetration of the internet is high in Indonesia. With its population of more than 260 million, a growing middle-class and a nominal GDP of about USD 1 trillion, Indonesia is an extremely attractive location for starting any business with its already large, accessible and rapidly growing market.
Indonesia, however, does not offer an easy way to navigate the business environment – it is ranked 73 among 190 economies in the Ease of Doing Business. The rank of Indonesia remained unchanged at 73 in 2019 from 73 in 2018. Therefore, investors should be aware and well informed of local regulations and sector-specific requirements before commencing their operations in Indonesia.
GDP growth (2019)***