Company Registration in Indonesia: Expectation vs Reality

Starting a business in Indonesia is a great idea for many foreign investors due to its lower operational costs, huge human capital and rapid economic development.

However, it might suddenly look different when facing reality.

Expectations of many entrepreneurs are too high and only once they are in the business, they can feel the cruel truth how wrong they were.

To prevent such unpleasant surprises, this article discusses the company registration in Indonesia and contrasts the most common expectations with the reality.

Expectation 1: Fast Process in Indonesia

You have a great business idea, market research is done, paperwork ready and company registration seems like the last step to you.

This leads you to be convinced that this is the easiest step and you will be able to register your company in just a few days, if not in a few hours.

It might sound harsh, but in reality, the thought of going through a fast process of incorporating your business is just a dream.

The Reality

The process of company registration in Indonesia takes 5-10 weeks (1-2.5 months). It can get longer if it happens to fall on an Indonesian national holiday, and what makes matter worse is when there is a joint holiday (also known as collective leave or “Cuti Bersama”).

Are you in a rush? Avoid delays and purchase a ready-made company online. It takes just 5 working days to register Cekindo’s shelf companies in Indonesia.

Expectation 2: Good Mastery of English

It is easy for most business owners to assume that officials who handle your company registration at each department speak excellent English. It is the international language and Indonesia is a country with the booming economy and the amount of foreign investment, so it would not be logical to think otherwise.

The Reality

For the most parts of the country, especially in the rural areas, the quality of Indonesian English is generally low. Even though Indonesians are required to start studying English since the first year of primary school, many of them are still not able to communicate with it, including the officials working on your business registration.

This is due to a number of reasons, for instances, poor teaching quality, multi-level classrooms with no entry points or standards for students, and prioritising passive English over the active one.

Even though it might be true that most people and authorities in big cities like Jakarta and Bali speak some level of English, Indonesian is highly preferable.

A local speaker with the knowledge of the legal procedures is an inevitable element of the successful business incorporation in Indonesia.

Expectation 3: Clear Process of Company Registration

This is another great expectation of most. Some entrepreneurs tend to think that the processes of company registration in Indonesia are all laid out in black and white. Business owners even believe that information can found easily online.

The Reality

There is absolutely nothing wrong with having a positive attitude and vision, but you should not be carried away with it. Though it is getting so much better with the reform package introduced to make doing business in Indonesia easier, company registration in Indonesia is still hampered by government red tape, bureaucracy and corruption.

As a result, there is ambiguity in the process of company registration on both sides. Professional business agents with the knowledge of the latest legal updates frequently face uninformed officers.

In case, entrepreneurs do not use the services of a third party, it gives rise to time-consuming administrative hurdle and unnecessary delays.

Face Reality

You spend a great time coming up with great business ideas and working hard to start a company in Indonesia.  Do not get bogged down by the reality of registering your company. Take the smart, entrepreneurial step and start a business in Indonesia with the help of the professional agency such as Cekindo.

 

Do you want to get our best content into your mailbox?
Subscribe to our newsletter!