The research main purpose is to explain the life cycle of Indonesian family businesses and how to develop their ability transforming them into professional ones. Generally, Indonesian family businesses are started by close family circle or immediate family. Almost one-third of family businesses were started individually, while the rest were started by two or more… Read More

Business Customs The best time for an initial business trip is September through June, as school holidays and vacation time in the summer months can impact the availability of many business people. Visitors should check the local holiday schedule before traveling to Indonesia, and in particular should try to avoid the Muslim fasting month of… Read More

Indonesia has prioritized infrastructure development in its medium-term development plan, or Rencana Pembangunan Jangka Menengah 2010-2014 (RPJM), and allocated increased resources to infrastructure projects in its 2010 and 2012 budgets. It is also receiving significant funding for a variety of infrastructure projects and other development priorities from multilateral development banks, primarily the World Bank and… Read More

Methods of Payment U.S. firms exporting to Indonesia use a variety of payment methods depending on their relationship with the purchaser. Payment options for export transactions include letters of credit (L/C), cash in advance, wire transfer, cash on delivery and open account. Confirmed, irrevocable letters of credit, while imposing additional costs, minimize risks faced by… Read More

In 2010, the Overseas Private Investment Corporation (OPIC) updated its 1967 investment support agreement between the United States and Indonesia by adding OPIC products such as direct loans, coinsurance and reinsurance to the means of OPIC support which U.S. companies may use to invest in Indonesia. OPIC has been the key USG agency encouraging American… Read More

Despite laws that penalize corruption by government officials and active law enforcement geared at rooting out corruption, corruption remains endemic in Indonesia, with businesses complaining of corruption in government procurement, dispute settlement, the regulatory system, and taxation. Corruption scandals garnered significant media attention in 2010, especially allegations of corrupt business dealings that forced the removal… Read More

U.S. companies receive significant competition from State-Owned Enterprises in Indonesia. Indonesia has state-owned enterprises in many strategic sectors, including banking and finance, transportation, energy and mining, electricity, telecommunications, and agricultural products. Some state-owned enterprises maintain monopolies for service provision, such as state-owned electric company PT. PLN for electricity distribution, PT. Telekomunikasi (Telkom) for fixed-line telecommunication,… Read More

Banks continue to dominate Indonesia’s financial sector, holding an estimated 80 percent of the assets in the financial system. The top 3 state-owned commercial banks hold about one-third of banking sector assets and the top 15 banks hold about 70 percent ot total banking assets. The government has encouraged development of Islamic banking, though Islamic… Read More

Indonesia recognizes the right to private ownership and establishment and relies on the private sector (albeit often protected), as a principal engine of economic growth. At the same time, State-owned Enterprises (SOEs) play a dominant role in many sectors, including oil and gas, electric power generation and transmission, infrastructure, banking, fertilizer production, and wholesale distribution.… Read More

The GOI notified the WTO of its compliance with Trade-Related Investment Measures (TRIMS) on August 26, 1998. The government issued on January 1, 2007 a regulation providing investment tax incentives to 15 industries: textiles, chemicals, pulp and paper board, pharmaceutical, products that use rubber as raw materials, iron and steel making, electronics, and component products… Read More