Business activity refers to any activity that is involved in producing goods or providing services. It can be natural resource extraction, manufacturing, distribution and various other service provision activities, such as financial and information services that involve the process of making, buying, selling, or exchanging goods or services with the aim of making a profit.
Who can conduct business activities in Indonesia?
In principle, every investor, both Indonesian citizens and foreign nationals, can conduct business activities in Indonesia by forming a business entity in the form of a Limited Liability Company. Especially for foreign investors, apart from forming a limited liability company, foreign investors can also establish a representative office run by the parent company as a representative in Indonesia.
Investment Climate in Indonesia
Currently the Indonesian government is focusing on increasing investment, both public and private, to expand Indonesia’s economic growth. In particular, investment in infrastructure and the manufacturing industry is welcomed in order to improve connectivity across the archipelago (to reduce logistics costs and improve the quality of the investment climate and national competitiveness) and reduce Indonesia’s dependence on commodity exports.
The Indonesian government has shown a passion for improving the investment climate – for example by cutting bureaucracy, deregulation and by offering tax incentives in certain sectors to investors who meet certain criteria – in an effort to attract private investment. The presence of foreign companies for developing countries is very necessary to accelerate economic development. Foreign capital helps in industrialization, capital development and job creation, as well as technical skills.
PNP’s role in helping Investors
Differences in regulations and licensing of business activities in Indonesia are obstacles that are often encountered by investors. Investors should be aware that if the company does not carry out its activities in accordance with the provisions of the laws and regulations in Indonesia, the company may be subject to sanctions, and may even be banned from operating. We PNP can guide you to start investing and ensure your company can conduct trading activities in Indonesia. If you need assistance or consultation, please contact us via info@pnpclawyer.com.