Michael Lenihan, founder of PT Gateway Consulting, shares ten insights on the benefits of starting your business in Indonesia.
Why Indonesia?
Are Your Best Choices for Business Investment in Southeast Asia?
The options can seem overwhelming when considering a location for your all-important strategic decision to move or expand into another unfamiliar economic region to set up your business and invest in Southeast Asia.
Indonesia and the archipelago stand out as the jewel in the crown. They are a bucket list destination and a unique, compelling choice that offers distinct advantages over their regional counterparts, Thailand, Malaysia, and Vietnam.
From a robust economy to a vibrant lifestyle, Indonesia offers diverse foreign investment opportunities. Whether you’re interested in the mainland of Java’s centralised business hubs or the archipelago islands such as Bali, Lombok, Gilis, Belitung, Flores, and Raja Ampat, Indonesia has something for everyone. Foreign investment capital is directed into diverse and innovative industry sectors, making it an ideal destination for business expansion.
1. Robust Economic Growth
Why is Indonesia one of the world’s fastest and largest growing economies? Its large population and rising wages have fuelled growing purchasing power, providing a buoyant consumer market. Unlike most regional economies, where the working-age population has already peaked or is nearly peaking, Indonesia continues to reap demographic dividends. As of 2024, its population is estimated to be around 277 million people, as demonstrated by an impressive growth rate over its counterparts.
As a member of the G20, Bali hosted the 2022 summit, which focused on protecting the vulnerable through promoting equitable growth and enhancing macroeconomics and financial stability.” Such an approach will help resolve the cost-of-living crisis and unlock sustainable, balanced, and inclusive growth.
Despite global economic uncertainties, Indonesia is showing remarkable resilience. Its competitive solid investment increase in foreign direct investment (FDI) and government strategic economic initiatives are a testament to this. This growth translates to expanding markets, increased consumer spending, and numerous business opportunities in various sectors, from eco-tourism and tech infrastructure to environmentally sustainable initiatives on the rise and where capital is being directed.
2. Strategic Location and Connectivity
One of the island’s favourites, Bali, is where PT Gateway Consulting Group operates its business. We support foreign relocation, setting up private and commercial investments, guiding clients to set up businesses, licenses, and visas, and advocating for property and business purchasing. Located in the heart of Southeast Asia, Bali provides unparalleled access to major markets and significant global brands, with direct flights to Australia, Singapore, Malaysia, and beyond. Businesses can easily connect with international clients and partners. Additionally, Indonesia’s extraordinary archipelago offers unique access to diverse markets within the country itself, making it an attractive connective hub for regional operations.
3. Diverse Investment Opportunities
Bali and more extraordinary Indonesia offer diverse investment opportunities across various sectors, including tourism, technology, agriculture, and renewable energy. The government has actively encouraged foreign investment, particularly in areas contributing to sustainable development and infrastructure improvement. Indonesia is a sophisticated market providing significant regional expansion and investment potential compared to neighbouring countries.
4. Favourable Government Policies
The Indonesian government has implemented several initiatives to attract foreign investment. The Omnibus Law, for instance, aims to simplify regulations and reduce business red tape. Additionally, specific tax incentives and special economic zones offer businesses financial advantages not found in many other Southeast Asian countries, such as Vietnam or Thailand.
5. Vibrant Startup Ecosystem
While Bali’s rapid property development expansion has been the focal point for environmental and economic sustainability, the island is recognised as a fast tech and startup hub, with many co-working spaces, incubators, and networking events that foster a collaborative environment for entrepreneurs. Bali’s unique blend of lifestyle and business opportunities provides a more appealing environment for startups, especially those in the digital realm and eco-tech and tourism.
6. Rich Cultural Appeal
Bali’s rich culture and stunning natural beauty make it an attractive place for talent worldwide. Unlike more urbanised areas in Southeast Asia, Bali offers a lifestyle that balances work and leisure, drawing in skilled professionals and digital nomads. This cultural richness enhances expatriates’ quality of life and contributes to creative and innovative business practices.
7. Skilled Workforce
Indonesia boasts a young, dynamic population eager to engage in various industries. Bali has a growing pool of skilled professionals, especially in hospitality, marketing, and digital services. Compared to countries like Myanmar or Laos, where talent pools may be more limited, Indonesia’s diverse workforce allows businesses to find the right talent for their needs.
8. Sustainability Focus
As global awareness of sustainability grows, Indonesia is making strides in promoting eco-friendly practices. Bali, known for its initiatives to preserve the environment, attracts socially responsible businesses. This focus on sustainability aligns with global trends and positions businesses favourably in the eyes of conscious consumers, making it a competitive advantage over other regions.
9. Lower Cost of Living and Operations
Compared to countries like Singapore and Malaysia, Bali and Indonesia offer a more affordable cost of living despite claims that increasing the cost of living can significantly reduce operational expenses for business opportunities; office spaces, utilities, and labour costs are generally lower. However, I caution investors to comply with the Ministry of Law, Human Rights to ensure that their workforce is fully supported, that they meet the terms and conditions set out by government regulations and agents such as Manpower and BKPM and that your business protects the rights of Indonesian employees. Transparency and compliance enable you to take full advantage of government investment policies’ benefits and be a more transparent business.
10. Quality of Life and Work-Life Balance
Bali’s exceptional quality of life is unmatched. With diverse cultural texture, beautiful beaches, lush landscapes, and a relaxed atmosphere, the island promotes a healthy work-life balance that is increasingly important in today’s fast-paced world. This lifestyle can boost employee satisfaction and retention, providing businesses a competitive edge in talent acquisition.
In the competitive landscape of Southeast Asia, Bali and Indonesia emerge as premier destinations for business investment.
They offer a unique blend of opportunities and advantages with a robust economy, favourable government policies, a vibrant startup ecosystem, and a sustainable focus. By choosing Bali as your business hub, you’re not just investing in a location but a lifestyle, a community, and a future filled with potential.
Make the smart choice—consider Indonesia for your next business venture. Bali is where I work, live, and run our PT Company. Its privilege in Indonesia has untapped potential, offering opportunities to foreign investors.
Protection Caveat
This article only intends to share insights and reflects personal and professional views. It does not represent the opinions or policies of any third parties, organisations, or government entities. The content here should not be construed as official advice or guidance. It serves as a broad invitation to future foreign investors to Indonesia. Readers are encouraged to seek additional information and perspectives on the topic discussed.