When you doing business in Indonesia, you need a domicile letter. To get one, you should have a business location that is not a residence. It then leaves you with one choice: pick an office in the busy business and commercial districts.
But how much will it cost you? Let’s break it down:
Rent
For this year, the occupancy rate in CBDs like Jakarta has dropped. For lessees, it is a good thing. It means more choices and a better price. On the average, though, you pay at least IDR4 million ($299) per person every month.
Your rent also depends on the building type. Class A buildings are the prime ones. These are the offices located in strategic locations in major key cities like Jakarta. The price per square meter is around $18. Considering an employee needs 6 square meters, a three-person team may mean a spending of $324 each month.
If that is too steep for you, you can start with class C buildings with rental prices beginning at $15 per square meter, and you can move to better ones as your business grows. But that will be exhausting for you. It may not look good as well if you keep on changing your address.
Electricity
The state-owned PLN (Perusahaan Listrik Negara) supplies the electricity across the entire country. Last year, it slashed electricity prices, which works to your advantage.
How much you pay depends on what business or industry you belong to. A business on B1 tariff pays a fixed amount of IDR1,100 ($0.82) per kilowatt hour per month. Those on B2 tariff spends a minimum IDR1,1467 ($0.11) per kilowatt hour per month. Businesses on B3 pay a minimum bill as well as a penalty for excessive peak loading.
According to Doing Business 2017: Equal Opportunity For All by the World Bank, the country has 96 per cent electrification rate. Moreover, its power outage frequency and duration is low than other nations in East Asia-Pacific region.
Staff
Doing business in Indonesia may mean dealing with a lot of routine tasks. To give you more time to focus on essential aspects of operations, you need to hire a staff. These are people who can take your call, send and receive faxes and deliveries, schedule your meetings, etc.
The minimum wage depends on the area, and the cost of living plays a huge factor. In 2016, it was IDR 3.1 million ($248). An entry-level employee may be worth $300 a month with increases every year.
You can hire a foreign worker, but it may not be cheap. For one, you have to pay the Expertise and Skills Development Fund of $100 per month per foreign employee (multiplied by the worker’s length of stay) to DKP-TKA (Indonesian Ministry of Manpower). The labor law also mandates you to have one Indonesian worker for every foreigner you hire.
Overall, running a business in Indonesia doesn’t cost a lot of money if you choose the most basic options, but there are still ways to cut back. One of these is through a virtual office.
HERE’S HOW TO SIMPLIFY IT
While you cannot avoid spendings on doing your business in Indonesia, you can pay less with a virtual office. Cekindo, one of the leading business partners in the country, offers you high-quality, well-designed virtual offices in Indonesia. We have enough spaces for lease in major areas like Jakarta and Bali.
Enjoy huge savings on your rent and then get more from our full package. Besides having an Indonesia virtual office, you’ll also have a staff who can handle your calls and emails. We have supported facilities from banks to postal services. Our able team can help process your business documents quickly and conveniently.
Contact us today and find out how we can make doing business in Indonesia hassle free for you.
