Trade Guide: Indonesia

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Indonesia(officially the Republic of Indonesia) is a sovereign country in Asia and Oceania. It is the largest island country in the world by the number of islands, with more than fourteen thousand islands. Indonesia has an estimated population of over 255 million people and is the world's fourth most populous country and the most populous Muslim-majority country.

Business Culture and Etiquette

Indonesia is often referred to as a shining chain of Emerald Islands which are scattered from Asia to Australia. The country is made up of 17,000 islands, hence its diverse ethnic groups and culture. These diverse cultures can be confusing to foreigners for doing business in Indonesia culture. However, Indonesian’s national motto of “Unity in Diversity” indicates an appreciation of these diverse cultures.

Indonesia has over 700 languages with Indonesian being the official language. Indonesian is the principal language for business, administration and education. Javanese is also widely spoken in Indonesia as it traces its roots to the largest ethnic group, which is Java. To conduct business in Indonesia successfully, one has to learn the language or employ a translator. Nonetheless, the language is easy to learn considering the fact that most educational institutions teach the language.

Indonesia boasts of being the biggest economy in Southeast Asia with Jakarta as its business and administrative. The city of Jakarta offers a variety of business opportunities to both local and foreign investors. Main Indonesian business opportunities are available in the industrial, services and agricultural sectors. Indonesia is also rich in natural resources including natural gas, crude oil, copper, tin and gold.

Foreigners seeking to conduct business in Indonesia must realize that Indonesia business culture is very different from the Western culture. Indonesian business people respect “who you know” more than “what you know”. Foreign investors will therefore, find navigating the Indonesian economy is easy when they have a local representative by their side. Working with a local partner, is an indication of commitment to the country and its future. Building relationships with the right people and making valuable connections is essential for a successful business venture.

Agreements in Indonesia business culture will often be done over breakfast, over a meal or on the golf course. Dinners are also great for developing relationships. The Chinese dominate Indonesian businesses and most of them are members of the Bamboo network, which consists of overseas Chinese businesses. Most Indonesian business executives are intuitive and emotional when conducting business unlike their Chinese counterparts who are more formal when making business deals.

Business in Indonesia are mostly fluid and informal and friendships often override contractual agreements, which some people consider too rigid. The parameters of a negotiation or an agreement may often shift, and at times, it is not clear whether an agreement has been reached, hence the need to practice patience when conducting business in the country.

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