Indonesia is a promising business destination for several reasons – the largest economy in ASEAN is rich in natural resources and has a demographically well-positioned and rapidly growing middle-class that drives domestic consumption. In 2030, the country will have nearly 300 million inhabitants and is projected to be the seventh largest economy in the world.
A top manufacturing nation
Today, Indonesia is already one of the top ten largest manufacturing nations in the world. To further boost growth, the government has adopted several reforms that include establishing industrial zones and providing tax holidays.
The rapidly increasing spending power, a tech-savvy population and massive public investments create business opportunities within various industries. Private consumption accounts for about 60 percent of the GDP, which is one of the main reasons many foreign companies enter and expand their businesses in Indonesia.
Since Ericsson first entered Indonesia in 1907, many other Swedish companies have followed. Today, around 80 companies with ties to Sweden are active in the country and many more are exploring the possibility of market entry. There are also a number of Indonesian companies and partners that represent Swedish products and technologies.
For a smooth landing in Indonesia, it is important to be aware of the potential challenges. Many Swedish companies struggle to keep up with the constantly changing regulations, and corruption is an ever-present risk. As our Trade & Invest commissioner Erik Odar says in the interview below, it is vital to prepare well and get good advice from local experts.
How we can help
Business Sweden established operations in Indonesia in 2012. The team is located in Jakarta and can help you overcome any obstacles you may encounter as part of your expansion. Our key services include market analyses, strategic advice and partner search. We can also offer advice on how to avoid corruption.
Erik OdarTrade & Invest Commissioner Indonesia
What are the main advantages for expansion in Indonesia?
Indonesia is one of the world's largest markets and continues to grow every year. There is plenty of room for new innovations and products. Both the public and private sector are interested in Swedish innovative solutions, quality products and sustainable operations. Companies that offer products to the manufacturing industry as well as those offering consumer goods and solutions for infrastructure will find interesting opportunities. As Indonesia is a dispersed nation with local needs, solutions and services that facilitate long-distance delivery and collaboration are in high demand.
What are the risks and challenges companies may face in Indonesia?
Difficulties to access market information and data in Indonesia makes it hard to know where and how to start operations. Obtaining information on relevant projects and business opportunities generally requires local staff or local partners. Another challenge is that regulations are evolving and changing constantly, which makes it difficult to navigate legally and with local administration. Corruption is another ever-present problem. Indonesia also has a few industries that are closed to foreign ownership. However, these challenges can be solved with good preparation and planning. It is also important to get help and support from local expertise.
Are there any cultural aspects to consider?
People are generally happy, enthusiastic and curious, but it is nevertheless important to follow up quickly and continuously in order to make things happen. A personal relationship with local partners is important. Just as in many other Asian countries, the relationship is often as important as the product and the offer.