Indonesia is one of the fastest-growing economies in Southeast Asia. With a population of more than 270 million people and a strategic location between the Pacific and Indian Oceans, Indonesia offers a vast market potential for investors.
For those who want to invest in Indonesia, the Investment Coordinating Board (BKPM) is the primary government agency that promotes, coordinates, and facilitates investment in the country.
What is BKPM?
The BKPM is a non-ministerial government agency that reports directly to the President of Indonesia. It is responsible for promoting and coordinating investment in the country, as well as issuing licenses for foreign and domestic investment.
The BKPM was established in 1963 and has undergone several structural changes over the years. Today, it has a central office in Jakarta and 31 representative offices in Indonesia and abroad.
Why Invest in Indonesia?
Indonesia is a country with vast natural resources, a young and growing population, and a stable political climate. It has a strategic location in the heart of Southeast Asia, with easy access to major markets such as China, India, and Australia.
Over the past decade, Indonesia has implemented a range of economic reforms that have helped to attract foreign investment. Some of the key reasons to invest in Indonesia include:
- The size of the market: With more than 270 million people, Indonesia is the fourth most populous country in the world.
- The abundance of natural resources: Indonesia is rich in natural resources such as coal, copper, gold, and oil.
- The growing middle class: The middle class in Indonesia is growing rapidly, which is driving demand for consumer goods and services.
- The government’s commitment to economic reform: The Indonesian government has implemented a range of economic reforms to attract foreign investment, including simplifying regulations and improving infrastructure.
How to Invest in Indonesia?
Foreign investors who want to invest in Indonesia must follow a specific process set out by the BKPM. The process involves several stages, including:
- Submitting an investment application to the BKPM
- Obtaining an investment license from the BKPM
- Establishing a company in Indonesia
- Acquiring necessary permits and licenses
- Commencing operations
Foreign investors can choose to invest in Indonesia through several different modes, including:
- Foreign Direct Investment (FDI): This involves setting up a new company or acquiring an existing company in Indonesia.
- Joint Venture: This involves partnering with an Indonesian company to establish a new business in Indonesia.
- Portfolio Investment: This involves investing in Indonesian stocks, bonds, or other financial instruments.
What are the Benefits of Investing in Indonesia?
Investing in Indonesia offers several benefits, including:
- Access to a vast market: With more than 270 million people, Indonesia offers a vast market potential for investors.
- Abundance of natural resources: Indonesia is rich in natural resources such as coal, copper, gold, and oil.
- Low labor costs: Labor costs in Indonesia are relatively low compared to other countries in the region.
- Government support: The Indonesian government offers a range of incentives and investment support to foreign investors.
Conclusion
Indonesia is a country with vast potential for investors. With a young and growing population, a stable political climate, and a strategic location in Southeast Asia, Indonesia offers a range of investment opportunities for domestic and foreign investors.
The BKPM is the primary government agency responsible for promoting and facilitating investment in Indonesia. By following the specific process set out by the BKPM, investors can access the many benefits of investing in Indonesia.
Investing in Indonesia requires careful planning and execution, but the potential rewards are significant for those who are willing to take the leap.
