How to Invest in Energy Sector in Indonesia – As we have known through past articles and forecasts, Indonesia is an emerging market in South East Asia. Predominantly for the energy and resource industrial complex – it is easy and good to do business here.
The potential market in Indonesia has long been known for its colossal size compared to its neighbors. Indonesia is a market with US$ 1.2 billion in value, compared to Singaporean US$ 334 billion, or Malaysian US$ 330 billion. Furthermore, the potential east region is now open.
This begs the ultimate question: How to Invest in Energy Sector in Indonesia? How do we receive a piece of the pie? This will be answered from data and information collected from a reputable source, mainly the Indonesia Investment Guidebook, and advice from Proconsultofficial.com – experts you can trust.
Consulting Business? Contact Whatsapp +62 877-7180-0222
The Potential: A Short Summary
Indonesia is the fourth most populous country in the world. The population increased to 32.6 million in 2010. This is continuously growing at the pace of 1.25% per annum. 71% of its population is currently in the productive age and expects US$ 1003 per month.
The potential is important in How to Invest in Energy Sector in Indonesia because this confirms that there is a market huge and strong enough to afford a dynamic business and economic climate. You can produce, distribute, and sell your goods directly in the Indonesian territory.
The government also has currently trending toward a pro-business stance. This has been proven by their legal product such as the Omnibus Law and the agrarian reform that helps the energy sector gain clarity on land ownership and less bureaucratic red tape.
Another thing that makes many people ponder on How to Invest in Energy Sector in Indonesia, is the trend of construction in previously overlooked eastern regions such as Papua, Maluku, and other parts of the territories that are rich in natural and human resources.
Also Read: Indonesia Energy Policy For Investment and Business
How to Get You Started
These are steps to start your businesses in Indonesia in general – Some sectors like energy and mining or aviation might have to go through extra steps that we will talk more in the caveat, but the beginning of it is generally the same:
1. Assessment and Initiation
In this stage of How to Invest in Energy Sector in Indonesia – you will start as the general business did: registering your company and your activity with the government. The government then will assess whether your activity is high risk or low risk.
These are the first steps toward obtaining your business license. The important thing to own first is the Nomor Induk Berusaha from the nearest chapter around you. This would need some paperwork, but with the right local partner – these are quite easy.
The next step on How to Invest in Energy Sector in Indonesia is to make sure that the business or corporation that you would direct in Indonesia has registered as an entity in the Badan Penanaman Modal Dalam Negeri or PMDN. This would continue to record your presence in Indonesia.
The last part of the initiation process would be to determine your legal entity. Most corporations are registered as Perseroan Terbatas or PT., this is an Indonesian legal term for Limited Liability Company. There are several other forms you could also choose.
2. Obtaining Foundational License
The next step on How to Invest in Energy Sector in Indonesia is to obtain the founding licenses. The foundation license to do business should be done with several paperworks. Some part of it is easy – you just need to make sure some approvals as following:
a. Spatial Conformity
This is mostly a license for using the land or space in order to do business. For example, the use of water, special economic zone, and others.
b. Environmental Approval
Are your activity already environmentally free? How is your waste management? Have you make sure that the waste in any form will not harm the people and environment?
c. Building Approval
This is the easiest, have you got approval to make certain or modify parts of the building? Will your dimension have properly built and won’t endanger the surroundings?
The next step on How to Invest in Energy Sector in Indonesia would be to assure some inspections and conditions set by the BKPM or Badan Koordinasi Penanaman Modal. This include the work permit, and other more specific licenses that would be much easier to be done once the foundational things has been taken care of.
But once you have obtained all of those, you are virtually can start to do business. You can set up your offices, arrange for employment, and start to operate the back office of your corporation to start coordinate the main activity and commercial trade.
The final phase on How to Invest in Energy Sector in Indonesia is the taxation – but we won’t dive it deeply because it is way detached from our main focus on the establishment of the business. We might talk about it in detail for another time.
Consulting Business? Contact Whatsapp +62 877-7180-0222
The Importance for Local Partners
Throughout this piece, there is an increasingly high incentive for you – foreign investor, to have a trustworthy local partner. This is because the process that we have explained here were often a subject of local and regional politics.
Another piece on How to Invest in Energy Sector in Indonesia is to understand the local language and etiquettes. Many of these processes will take some time and required us to respect local values and talk in the right place or occurrences with the right people.
A trusted local partner could also evade you from the unwanted parties that tries to stuff up the bureaucracies. They could have the connection with certain government official to make sure that the process won’t be played by corruption or the incompetence by several parties.
Proconsultofficial.com would be the starting place to consult your business problems in Indonesia. They were associates of experts that knows How to Invest in Energy Sector in Indonesia from end to end. They will help you from starting to market your business.
And that’s How to Invest in Energy Sector in Indonesia, also – the importance of local partner that would help you navigate the complex and often times strict laws and regulations in Indonesia. Make sure that you follow through the legal procedure to avoid future problems!
Also Read: Indonesia Energy Resources for Investment and Business