General overview of doing business in indonesia

Doing Business in Indonesia

Vitafoods Asia

2Cekindo Bisnis Grup ©2015

Content

1 Market Overview and Facts

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Company Profile

Market Trends and Investments

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Company Profile

3Cekindo Bisnis Grup ©201505/03/2023

Essentials in Figures


• Geography: More than 17,508 islands. The largest islands Sumatra, Java, Kalimantan, Sulawesi and Papua take over 90% of total land area.

• Capital city: Jakarta, which is the business and governmental center• People: 252 million, >51% under age of 29• Currency: Indonesian Rupiah (IDR)• Religions: Islam 89%, Protestant 7%, Catholic 3%, Hindu 2%, Others 1%.• Language: Bahasa Indonesia which is similar to Malay.

Market Overview

Total Area Land Area Sea Area Population

1,919,440 km 1,826,440 km 93,000 km 253,609,643


• Investment Rating (2015): Standard & Poor’s:bb+ positive, Fitch: BBB-, stable, Moody’s: Baa3, stable.

Macroeconomic FactsIndicates 2010 2013 2018 E

Population (mn) 243 251 263

GDP (Nominal, USD bn) 709 868 1657

GDP per head (USD) 2,919 3,460 6,300

Inflation 5.1% 8.33% 6.38%

Export of goods & services (USD bn) 175 206 371

Imports of goods & service (USD bn) 154 212 345

Private consumption (USD bn) 401 485 964

Private consumption per head (USD) 1,650 1,930 3,660

Source: The Economist Intelligence Unit


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Market Overview and Facts

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Company Profile

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Investments

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The highest Investments Realizations

DDI (Investment Realization 2015) FDI (Investment Realization 2015)

No. Sector Investment (USD million)

Project No. Sector Investment (USD million)

Project

1 Food Industry 1,857 879 1 Mining 4,017 1066

2 Electricity, Gas, and Water Supply

1,661 247 2 Transportation, Warehouse and Telecommunication

3,290 493

3 Transportation, Warehouse and Telecommunication

1,615 213 3 Metal, Machinery and Electric 3,092 1781

4 Chemical and Pharmaceutical

1,568 320 4 Electricity, Gas, and Water Supply 3,029 350

5 Construction 1,299 178 5 Real Estates, Industrial and office building

2,434 858

6 Food Crops and Plantation

911 372 6 Food Crops and Plantation 2,072 606

• 17,238 permits processed, with total investment commitment of USD 140 billion.• 2016 target FDI of USD 28 billion, DDI of USD 20 billion of realized investment.

Source: The Investment Coordinating Board of the Republic of Indonesia (BKPM)


Investments

Source: The Investment Coordinating Board of the Republic of Indonesia (BKPM)


• Aggressive marketing from leading manufacturers.• Pharmacies as the larges distributor channel for consumer health

products in 2015.• Middle-class consumers are better informed about diseases from the

unhealthy lifestyles, such as diabetes, high cholesterol and high blood pressure.

• Increasing health awareness, Indonesians start to prefer consume food and drink that contains the vitamins/nutrients to boost immunity.

• Middle and upper class consumers start to purchase vitamins and dietary supplements products/pills, tablets or drinks to maintain their health and do exercising.

• Higher demand for baby nutrition and herbal/traditional products itself from natural materials

What support double digit growth of Consumer Health products in 2015?


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Company Profile

Market Trends and

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Company Profile

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The decision to enter new market is critical, particularly in Asia. Indonesia market is one of potentials market to be entered in Asia. As a consulting firm, we have wide experience in assisting our clients from various industries to enter Indonesian market.

As we understand the local market specifics and take advantage of our wide network, we aim to provide an update information to foreign entities and entrepreneurs to support their business in Indonesia.

There are two options which can be chosen prior to enter Indonesian market.

1.Cooperate with local partner/distributor

2.Company Incorporation


Cooperation with Local Partner

Search and Shortlisting the potential distributors based on the requirements

Conduct and arrange initial meetings with potential distributors

Company review to clarify the background of the distributors

Negotiations and Close cooperation

Product Registration

Several steps to encourage the potential distributors


Company Incorporation

1. PT. PMA require minimum 2 shareholders, 1 director and 1 commissioner2. Planned business activities determine percentage allowed for foreign in Indonesia3. The minimum investment of PT. PMA is USD 1.000.000 and minimum 25% of total investment is paid-in-capital4. IUT (Permanent Business License) can be obtained after realization of investment by LKPM report

Foreign Owned Company (PT. PMA)

1. Local PT require minimum 2 local shareholders, 1 local director and 1 local commissioner 2. There are 3 sizes of local PT based on the amount of paid in capital : - small - medium - large 3. If company plans to hire foreign, medium size with capital IDR 1.000.000.000 is required

Local Company (PT)

1. Representative office is limited only for market studies, marketing, promotion and not allowed to generate any revenue in Indonesia2. No shareholder requirement3. No director and commissoner requirement4. No capital requirement5. Representative office require minimum 1 Chief of Representative Office

Representative Office


Registration with Ministry of Trade to obtain company registration certificate

Open bank account and pay capital

Tax number and VAT registration

Obtain government letter office domicile

Execution of the documents by shareholders and notarization by a public notary

Preparation of company’s incorporation documents

Obtaining Investment approval from BKPM

Summary of company registration procedures

• The time frame for PMA company Incorporation is around 2-3 months.• Companies are required to keep accounting records and prepare annual financial reports.• Local nominee is not supported by Indonesian Law.• Principal license and then a Permanent Business license allowed to apply for import license, work Permits.• The Indonesian authorities recognize virtual office.


• Foreign Investors must apply for approval from BKPM.• Indonesia prohibits foreign currencies for domestic transactions.• All legal documents to be translated in Bahasa Indonesia.• Corporate Tax 25% and VAT 10%.• Import duty payable 0% - 150% on customs value of imported goods.• On luxury goods both manufactured in and imported into Indonesia are

the rates range from 10-50%. • Bank Indonesia regulated dollar purchases above USD 25,000 with

requirement to show underlying transaction documents.

Legal & Tax Considerations


• Bureaucracy is slowly reducing.• Rules are often unclear and can change quickly.• Challenging labour situation with rising minimum wage.• Choosing the right partner as one of the important key.• Use of Bahasa Indonesia and English for business.• Respectful and indirect communication style in business.• Informal get-to-know-you initial business meetings.

Local Flavors


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Company Profile

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PT. Cekindo Bisnis Grup is a leading consulting firm of business services to clients expanding and operating in Indonesia and further to Southeast Asia.

Cekindo provides full-range of market-entry and corporate secretarial services to enable our clients to focus on their core business and activities in Indonesia.

Our Vision

To be leading consulting firm of business services to clients expanding and operating in Indonesia.

Our Mission

To provide full-range of market-entry and corporate services to enable our clients to focus on their core business and activities in Indonesia and beyond.

Our Values

Client-focused

Excellence performance

Knowledgable locally

Integrity moral

Normative operations standards

Delivered on-time

One stop services provider

Our main services include :

Business Set Up

- Company Registration- License & Product Registration- Market Research & Analysis- Local Partner Selection- Trade Mission- Land & Property Ownership

Business Process Outsourcing

- Recruitment & HR Establishment- Payroll Management- Accounting & Tax Reporting- Visa & Work Permit- Mystery Shopping

Local Representation

- Local Distributor & Partner- Buying Agent- Office Space


Profile Overview Relevant Experience:

Mr. Ramelan is currently Senior Advisor at PT Cekindo Bisnis Grup.

Hi is a Research Professor at the Agency for the Assessment and Application of Technology.

The honorary degree of Doctor Honoris Causa from Monash University, Australia and Northeastern University Boston.

Senior Advisor– Prof. Dr. Rahardi Ramelan

• Minister of State for Research and Technology of the Republic of Indonesia and Chairman of the Agency for Assessment and Application of Technology (BPPT) in the Seventh Development Cabinet of the Republic of Indonesia.

• Minister of Industry and Trade in the Development Reforms Cabinet of the Republic of Indonesia and Chairman of National Logistic Agency.

• Deputy Chairman for Industrial Analysis and Vice Chairman of the National Development Planning Agency of the Republic of Indonesia

• Several management positions and responsibilities related to Indonesian Aviation industry, the Weapon industry.

Prof. Dr. Rahardi Ramelan

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Michal is currently Principal Consultant at PT Cekindo Bisnis Grup.

He has more than 5 year‘s experience in the Corporate Market research, Strategy and Evaluation Expansions, Business Consultancy, and Preparation of Business Feasibility Studies.

He has worked for various industries, namely Grocery and Marchandise Retail, Energy, Medical Device, Heavy and Automation Industries.

+6281282300584 [email protected]

Principal Consultant– Michal Wasserbauer

Multinational grocery and general merchandise retailer: Capital Investment Appraisals• Performed a position of Senior Capital Investment Specialist for Czech & Slovak with key

responsibilities for Capex, appraisals of new store openings, reconstructions, market opportunities valuation, long-term planning, financial performace strategy and performance evaluation, and financial reporting to Financial Director for Czech Republic & Slovak Republic.

World‘s largest student and recent graduates-run organisation: Financial Controller• As Vice President for Finance and member of Executive Board, responsible for managing the

financial team. Ensuring financial stability and financial legality of all local entities in the Czech Republic, includes budgeting, controlling, financial education, coaching and mentoring. Implementing measurable performance indicators such as competencies and KPIs.

International consultation company: Market Expansion Consultant• Provided marketing consultancy and advisory for foreign companies with goal to expand to

Indonesia. Delivered feasibility studies for energy, medical device, retail, heavy and automation industries. Assisted in establishment of the local and international company related to legal and bureaucracy requirements as well as outsourcing of supporting processes for foreign companies.

Michal Wasserbauer

Relevant Skills:• Market opportunities valuation• Investment analysis• Performance management • Feasibility studies• Strategy planning

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• Stakeholder management• Marketing consultancy



Nurmia is currently Principal Consultant at PT Cekindo Bisnis Grup.

She has wide experience in the areas of Business Development, Legal Corporate Restrictions, Business Consulting, Project Management, Market Development & Entry Strategy, Sales & Distribution, Management Strategy, Recruitment, Visa & Work Permit, and Change Management.

She has worked for various industries, namely Energy & Resources, Telecommunication, Retail, Pharmaceutical & Medical, Financing, Non-Profit, IT and Heavy Industries.

+628119691987 [email protected]

Principal Consultant– Nurmia Dwi Agustina

International Management company: Management & Legal consultant • Responsible in designing, developing, and implementing of strategies for market expansions,

Project management, Develop communication and legal plan and program, support the organization alignment from current to new leagl and business process, conduct value chain mapping of prioritized businesses and alalyze.

Chamber of Commercial: Head of Business Processing Section • Responsible for business processing section, assisting European companies in their expansion

legal process in Indonesia, holds position of the honorary Vice-President for the Asian market in the Portuguese Association Expandia.

She has worked for various industries, namely Energy & Resources, Telecommunication, Retail, Pharmaceutical & Medical, Financial Services, Non-Profit, IT and Heavy Industries.

Nurmia Dwi Agustina

Relevant Skills:• Corporate law• Outsourcing processes• Company formation• Acquisitions• Project Management• Competitive Analysis

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• Business Planning• Risk Management• Talent Management Strategy• Recruitment• Visa & Work Permit• Change Management


Selected Clients…

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PT. Cekindo Bisnis Grup

Menara BCA Grand Indonesia 50th flJl. MH. Thamrin No. 1Jakarta Pusat 10310

Indonesia

[email protected]+6221 580 6889

http://www.cekindo.com

General overview of doing business in indonesia

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