Exporting to Indonesia

Indonesia is a group of islands located near Malaysia, Singapore, the Philippines and Australia. The country has a population of 269.6 million (IMF 2020), making it a large potential consumer base. In the year to June 2019, total UK exports to Indonesia amounted to £1.4 billion (ONS, 2020)

Consistent economic growth

Indonesia’s GDP has continued to grow consistently each year since 2014, with a growth rate of 5% in 2019 (IMF, 2020). This would lead to an increase of spending power for consumers which UK businesses could benefit from. Despite the COVID-19 pandemic, Indonesia’s economy has rebounded in the second half of 2020 and is expected to accelerate in 2021. Real GDP is projected to expand by 4.8% in 2021. (IMF, 2021)

Large Facebook and Twitter markets

Indonesia has over 100 million internet users. It is the world’s third-largest Facebook market and fifth-largest Twitter market. 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.

Demand of goods and services

In the year to June 2019, the top goods exported from the UK to Indonesia were metal ores and scrap, pulp and waste paper, road vehicles, toilet and cleansing preparations and medicinal and pharmaceutical products (ONS, 2019). The top services imported by Indonesia from the UK were business, insurance and pension, travel, transportation and financial services (ONS, 2019). If you operate in any of these industries, Indonesia could be a good market for you.

View of the Indonesian coastline

Ease of doing business

73rd

out of 190 countries (World Bank, 2019)

Currency

Rupiah (also known as IDR)

Business language

Bahasa Indonesian

You’re likely to need a translator

GDP per capita

$3,870.60

UK is $42,560 (IMF, 2018)

Economic growth

5.0%

(IMF, 2018)

Time zone

GMT +7/8/9

Jakarta is GMT +7

New

Is this market right for you?

Make the right choice by comparing data from other countries.

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).

Doing business in Indonesia

Preparing to export

VAT

Based on Law Number 8 of 1983 as most recently amended by Law Number 42 of 2009, an Entrepreneur that delivers taxable goods and/or services exceeding a certain amount in one fiscal year is required to register as a VAT-able Entrepreneur. Currently the threshold is Rp 4.8 billion per annum (Deloitte, 2019-2020)

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)

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.

Intellectual property (IP)

Indonesia has enacted laws covering patents, copyright, trademarks, industrial trade secret, plant varieties, integrated circuits and traditional knowledge to implement its obligations under the international treaties. You can find a full list of WIPO (World Intellectual Property Organisation) references to Indonesia.

Operating in Indonesia

Intellectual property (IP)

Indonesia has enacted laws covering patents, copyright, trademarks, industrial trade secret, plant varieties, integrated circuits and traditional knowledge to implement its obligations under the international treaties. You can find a full list of WIPO (World Intellectual Property Organisation) references to Indonesia.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.