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Exporting from the UK to Indonesia: A market guide

Overview

Indonesia is South East Asia’s largest economy with a population of 270 million people and a geographical spread wider than the continental United States. As a future top 5 economy (and top 10 this decade), Indonesia’s importance and economic ambition will continue to grow, offering a range of trade and investment opportunities for UK businesses.

Trade statistics

£1.6 billion total UK exports to Indonesia for the four quarters to the end of Q2 2024

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2024)

54th largest UK export market

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2024)

0.2% of total UK exports for the four quarters to the end of Q2 2024

(Source: ONS UK total trade: all countries, seasonally adjusted
Last updated: October 2024)

The world’s 10th biggest economy

Indonesia is currently the world's 10th biggest economy in terms of purchasing power parity (PPP). It keeps on growing and is projected to be the fourth biggest by 2050 (The World in 2050 report).

Strong UK trade links

UK companies are already flourishing in Indonesia, some with a presence that stretches back over 100 years.

Major UK companies operating in Indonesia include Standard Chartered Bank, HSBC, Mott Macdonald, Arup, Prudential, BP, Unilever, Shell, Rolls Royce, AstraZeneca and GSK.

Demographic dividend

Indonesia’s economic growth is driven by an emerging middle class.

Demand from the new middle class is increasing for modern retail and consumer goods, healthcare, education and professional qualifications, information and communications technology (ICT), transport, construction, and manufacturing.

Indonesian consumers are typically young, IT savvy, highly receptive to advertising and interested in new international brands.

Top five UK goods exported to Indonesia , in the four quarters to the end of Q2 2024

Goods Value (£ million )
Cars 75.4
Ships 63.6
Medicinal & pharmaceutical products 63.2
General industrial machinery (capital) 45.6
Road vehicles other than cars (capital) 43.3

Source: ONS Trade in goods: country-by-commodity exports
Last updated: September 2024
Download the latest trade and investment factsheet for Indonesia.

Top five UK services exported to Indonesia , in the four quarters to the end of Q1 2024

Service Value (£ million )
Travel 179.0
Other Business Services 172.0
Insurance and Pension 108.0
Telecommunications, computer and information services 61.0
Financial 49.0

Source: ONS UK trade in services: service type by partner country, non-seasonally adjusted
Last updated: July 2024
Download the latest trade and investment factsheet for Indonesia.

Indonesia: at a glance

Economic growth

5.3%

Actual figure (IMF, 2022)
The UK is 4.1% (IMF, 2022, actual figure)

GDP per capita

$4,798

Actual figure (IMF, 2022)
The UK is $45,461 (IMF, 2022, projected figure)

Currency

Rupiah (also known as IDR)

Business language

Bahasa Indonesian

You’re likely to need a translator

Time zone

GMT +7/8/9

Jakarta is GMT +7

Want to see more on Indonesia? Sign up for additional market data, content specific to your product or sector and to compare Indonesia side by side with other markets.

Opportunities for exporters

UK companies are already flourishing in Indonesia, some with a presence that stretches back over 100 years. Major UK companies operating in Indonesia include BP, Unilever, Shell, Standard Chartered Bank, Prudential, Rolls Royce and GlaxoSmithKline (Indonesia Matters, 2020).

Check for trade barriers

Trade barriers, such as tariffs or taxes, can raise costs, cause delays, or even stop you from exporting. Check for any issues that may impact your business when exporting.

See current trade barriers

See resolved trade barriers

Check duties and customs

Find information on how to export goods from the UK. View the duties, rules, restrictions, and the documents you need for your products.

See current duties and customs procedures

Doing business in Indonesia

Preparing to export

VAT

The Harmonized Tax Law (HTL) or Law No. 7/2021 introduced major changes to Indonesia’s tax structure including corporate taxation and value-added tax (VAT).

Corporate income tax (CIT) is set at a basic rate of 22%. Several benefits are provided if a business fulfil the following conditions:

  • listed on the stock exchange that offer the minimum requirement of 40% of total share capital are subject to a 3% tax reduction
  • annual turnover of 50 billion rupiah (US $3.5million) are eligible for a 50% tax reduction, imposed proportionally on the part of the gross turnover of up to 4.8 billion rupiah (US $336,000)
  • annual turnover below 4.8 billion rupiah (US $336,000) are subject to a 0.5% tax of total turnover

VAT is imposed on the provision of services or the transfer of taxable goods. The rates are set out below:

  • most manufacturers, retailers, wholesalers, and importers have 11% VAT imposed. The rate will be increased to 12% by 2025
  • export of tangible and intangible goods are subject to 0% VAT
  • export of services is subject to 0% VAT

Import duties

Any goods coming from overseas into the Indonesian customs territory are treated as “import” and are generally subject to import duty.

Importation of goods into Indonesia is subject to Customs verification. Importer must register with the Investment Coordinating Board (BKPM) to obtain a Business Registration Number (NIB) (Deloitte, 2019)

Regulations

In 2021, the government issued Government Regulation No. 29 concerning Organization of the Trade Sector (“GR 29”), changing the rules for distribution of goods, exports and imports.

Following GR 29, the Ministry of Trade (MOT) introduced a series of technical implementing regulations, notably MOT Regulation No. 20/2021 concerning Import Policies and Procedures

The Omnibus Law

The Omnibus Law on Job Creation intended to stimulate domestic and foreign investment by removing bureaucratic red tape.

It was passed in October 2020 and aimed at addressing issues such as ease of obtaining business permits, land acquisition for business purposes, tax and labour.

Trade barriers

Report any trade barriers that are affecting your business so we can help fix them.

Operating in Indonesia

Intellectual property (IP)

Intellectual property (IP) rights are territorial.

Rights granted in the UK do not provide protection elsewhere. You should consider getting IP protection abroad if you want to trade overseas or sell to overseas customers via the internet.

The Intellectual Property Office’s International IP Service provides practical information to help you protect, manage and enforce your IP in Indonesia and in ASEAN.

British Businesses looking for IP support can also contact the South East Asia IP Attaché team.

Indonesian National Standard (SNI)

SNI is the only standard that is applied to products and services nationally in Indonesia.

SNI is mandatory for products related to the safety, security, public health or environmental functions and/or economic considerations. Some mandatory standard applied for products that often the international standard has not been recognised.

Indonesian government provides technical information and guideline of the implementation of SNI on SNI Certification.

Working culture

Face-to-face meetings are preferred in Indonesia, with phone calls and emails sometimes seen as impersonal. However, WhatsApp is used heavily as a means of communication. LinkedIn, X and Instagram are also becoming more popular and are used for the promotion of business.

The working week in Indonesia is Monday to Friday, with Fridays considered half days.

Doing business in Indonesia takes patience and perseverance. Companies should be prepared to invest time and resources in regular visits over a period of months, sometimes years, before seeing returns. Relationship building is key to successful engagements.

UKEF

If you have any concerns about getting paid for your export, speak to UK Export Finance (UKEF) about insurance against buyer default.

Overseas business risk

In Indonesia, there are various potential risks for UK Company doing business in this country including political and economic risk, human rights, bribery, and corruption, intellectual property and crime.

For more information check Overseas business risk: Indonesia.

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