How to Start a Business in Indonesia

To start a business in Indonesia requires a lot of preparation to be made. Before engaging a company setup service, entrepreneurs must determine the kind of business they want to do. Entrepreneurs cannot change their decision about the business model after the company is established. This is because Indonesian law states that each company can only have five business codes. These codes will determine which industries the business can do.

It is common to see new entrepreneurs changing their business industry after the company is ready. In this case, not only is changing a business model from the core troublesome. The process of changing legality is also cumbersome. Plus, they will have to pay more money to make all these changes. Therefore, entrepreneurs should have a clear idea of their business before starting a company.

Start a Business: First Steps

Choosing to start a business also requires entrepreneurs to know the steps they need to take. For sure, the first step they need to make is to plan their business model. Within this business model, there are several factors they need to consider. They need to determine their products or services. Then they need to know the target market and their buying power. Furthermore, they need to be able to project the future of the company.

All of these plans are essential for the company to sustain its business. These plans are also the foundations for the growth of the company. Entrepreneurs must also remember that eventually, they will need to form a legal entity to run the business. The function of this legal entity is to cement the existence of the company. It allows the business to exist and grow further.

More reads: How To Start A Foreign Business in Jakarta?

Take the example of a small pastry shop. Initially, the entrepreneur may produce from the kitchen at home. However, as the business grows, they need a larger kitchen area for more production. Then, once the demand increases, the shop needs to hire more professional employees. Employees of these types will most likely apply to companies with contracts for their security. Hence, a legal entity is needed.

Office for Company

This legal entity is otherwise known as a company. For local Indonesian entrepreneurs, it is recommendable to become PT. However, if a foreign company is expanding their market to Indonesia, it will have to either set up a PT PMA or representative office. In the case of the representative office, the company cannot engage in transactions within the country.

Whether the company is PT or PT PMA or even a representative office, they need a business address. In the case of the previous example of a pastry seller, the entrepreneur does not need a physical office. However, since the legal entity still needs to be registered, they can use a virtual office service. A virtual office allows the entrepreneur to work from their kitchen while having their mails handled by the virtual office provider.

More reads: Virtual Office Rental to Improve Business

On the other hand, a serviced office is recommendable for the PT PMA and representative office. This is because by having a physical office, clients and business partners will have more trust. The office can function as the management’s working place. Furthermore, a serviced office is fully furnished with office desks, cabinets, and chairs. Therefore, foreign investors do not need to invest in fixed assets.

The serviced office also provides high-speed internet, telecommunication system, IP Phones, lounge area, and a meeting room. They also provide receptionists, cleaning services, and local managers to maintain the facility. This convenience is something that can help companies to operate efficiently. A serviced office is not only beneficial for foreign investors, but local entrepreneurs can also benefit from this service.

Find out more about Serviced Office or Private Office at our website. You can also contact us here or chat us on Whatsapp at +62812-1315-4189.

Sibylle Avelena

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