INDONESIA
MARKET
GUIDE
ABOUT INDONESIA
Indonesia is the world’s largest island country,
Southeast Asia’s largest economy and the biggest
democracy in the world. It offers massive potential as
a strong retail market, with a burgeoning middle class
and a vibrant youth culture.
Indonesia is an archipelago made up of 18,000 islands
spanning 5,150 kilometres east to west, and three
different time zones. The size, strategic location and
natural resources of Indonesia make it attractive to
New Zealand exporters.
The Indonesian economy is largely dependent on the
mining, industrial and utilities sectors. It is a market-
based economy in which the Government plays a
significant role, including setting prices on several basic
goods like fuel, rice and electricity.
Although Indonesia’s trade is primarily conducted with
Asian countries (e.g. Japan, China, Singapore and South
Korea), our trading relationship with Indonesia has
steadily been growing. In 2015 it was New Zealand’s
12th-largest bilateral trading partner, with exports worth
NZ$840 million. Dairy products make up around 42
percent of what we send to Indonesia, with meat and
wood products key exports also.
INDONESIA | MARKET GUIDE 1
QUICK FACTS
GDP: US$862 billion (2015)
GDP per capita: US$3,347 (2015)
Official language: Indonesian (Bahasa Indonesia)
Currency: Indonesian Rupiah (IDR)
World Bank Ease of Doing Business ranking (2017): 91
of 190 (NZ ranked 1 of 190)
Corruption Perceptions Index ranking (2016): 90 of 176
(NZ ranked 1 of 176)
Free Trade Agreements: AANZFTA (ASEAN-Australia-
New Zealand)
Value of NZ exports: US$603.85 million (2016)
New Zealand’s 9th-largest market in 2016
Population: 257.6 million (2015)
Land area: 1,811,569 sq km
Density: 142.2 people per sq km
Indonesia is:
• a diverse, fast growing market
• a strategically-placed country for New Zealand
and the Asia-Pacific region
• the world’s fourth most populous country, offering
huge markets
• a country where 70 percent of the population
is made up of middle class and youthful people
(i.e. active consumers).
NZTE APRIL 2017
 OPPORTUNITIES FOR
CONTENTS NEW ZEALAND BUSINESSES
Trade agreements . 2
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Food and beverage
Opportunities for New Zealand businesses . . . . . . . . . . 2 Indonesia loves New Zealand’s food and beverage
Food and beverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 products: exports were valued at NZ$548 million in 2016
Aviation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 and made up 65 percent of New Zealand’s total exports to
Indonesia. New Zealand is a key supplier of milk, with dairy
Geothermal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
exports valued at NZ$383.5 million in 2016. Indonesia’s
Education . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 food and beverage manufacturing industry relies heavily on
Information and communication technologies (ICT) . . 3 imports of milk, as well as other ingredients such as sugar
and wheat.
Manufacturing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Lifestyle changes in Indonesian urban centres, and more
Business culture and etiquette . . . . . . . . . . . . . . . . . . . . . . 3
varied diets, has seen a growing interest in imported
Travel and visiting Indonesia . . . . . . . . . . . . . . . . . . . . . . . . 4 goods, particularly processed and convenience foods.
Accommodation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Improvements to the distribution system on the island of
Visas and immigration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Java has helped increase access to these products.
Indonesia’s large Muslim population presents an
Transportation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
opportunity for exporters who can meet halal criteria.
Currency, credit cards and ATMs . . . . . . . . . . . . . . . . . . . . 5 Halal serves as a guideline for Muslims in all aspects of
Public holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 consumerism and consumption of products and services.
Useful phrases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Bound by the Islamic dietary laws, Muslims check and judge
the permissibility and prohibitive nature of all food and
Medical services and hospitals . . . . . . . . . . . . . . . . . . . . . . . 5
drink beforehand to prevent them consuming forbidden
Trade shows and industry exhibitions . . . . . . . . . . . . . . . 6 and doubtful products. Around 88 percent of Indonesia’s
Product registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 257 million people are Muslim and the country is home to
about 13 percent of the world’s Muslim population. The
Customs and import regulations . . . . . . . . . . . . . . . . . . . . 6
authority responsible for issuing halal certificates is the
Setting up operations and establishing a business . . . 6 Indonesian Ulama Council (MUI), which is the country’s
Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 highest authority on Islamic affairs. The two authority
Opening a bank account . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 bodies for Halal Certification in MUI are The Food, Drug and
Cosmetics Assessment Agency (LPPOM) and MUI Fatwa
Local government directory . 6
Committee halal standard in Indonesia is established based
. . . . . . . . . . . . . . . . . . . . . . .

Business associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 on MUI’s Fatwa or Sharia Law. More information about Halal
Other useful websites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Certification please visit the LPPOM MUI website.
NZTE / Embassy contact details . . . . . . . . . . . . . . . . . . . . 7 A close business relationship with the right local agent
is necessary to make market entry easier for food and
beverage exporters as Indonesia’s import regulations are
often complex and opaque.

TRADE AGREEMENTS Aviation

Indonesia is now the world’s 12th-largest aviation market
It’s wise to factor in any government-led costs you might with plenty of scope for future growth. The current
face when exporting to a new market. Use the Ministry passenger volume in Indonesia is about 86 million
of Foreign Affairs and Trade’s tariff finder to find out the passengers per annum, and is predicted to reach 270
applicable tariff rates for Indonesia, as well as HS codes, million in 2034. This rise in traveller numbers can only be
document and shipping requirements. For more details accommodated by improved airport capacity, enhanced
on Free Trade Agreements in force, go to the Free Trade human resource quality and an infrastructure upgrade,
Agreements section of the Ministry of Foreign Affairs and to alleviate the three main aviation industry issues facing
Trade’s website. Indonesia at present. These concerns are outlined below.
1. Need for infrastructure upgrade. Of the 600+ airports in
Indonesia, 233 are public state owned and operated, of
which 29 are designed for international flights. Twenty-
five of the larger airports in this group are managed
by two state-owned enterprises; together, they are
accountable for about 90 percent of the total market
revenue. These airports are currently running at 120 to
200 percent overcapacity. The Ministry of Transport
has budgeted for 14 new terminals/airports, 57 airport
developments in disaster-prone areas and 49 airport
developments in isolated areas, allocating IDR11 trillion in
2015 and up to IDR71 trillion before 2019.

INDONESIA | MARKET GUIDE 2 NZTE APRIL 2017

2. Lack of ‘employable’ pilots. With the rising number of
aircraft and customers, the demand for pilots is growing
also. Every year, the demand for pilots increases by 15
percent, but the actual growth in pilot numbers is only
5.21 percent. There are more than 50 flying schools in
Indonesia to meet this demand. However, the quality of
the schools fall below the airlines’ requirements and most
of the graduates are not ‘employable’. According to the
Ministry of Transportation, Indonesia was only able to
train around 450 ‘employable’ pilots in 2015, with 770
pilots actually required by airlines. Meanwhile, according
to Boeing, Indonesia needs need an average of 900
pilots per year between 2014 and 2034, with only 400
‘employable’ pilots actually produced from the current
aviation schools.
3. Lack of engineers. For the past five years, Indonesia
produced only 200 Aircraft Maintenance Engineers
Licence (AMEL) holders, with an estimated 900 more
required to support the growing number of aircraft
operated by national airlines.
What does the future of aviation look like there?
In view of the growing number of commercial aircraft
and the ASEAN Open Sky Policy, Indonesia’s Ministry of
Transportation will increase the capacity at aviation schools,
improve the lecturer/instructor quality and quantity,
upgrade training facilities and conduct effective policies.
Geothermal
While Indonesia is South east Asia’s largest energy
producer and consumer, more than 70 to 80 million
people – almost one third of its inhabitants have no access
to electricity.
Indonesia’s reliance on subsidised fossil fuels means it has
made little progress in terms of sourcing renewable energy.
Most power generation is from conventional coal-fired
energy sources, while less than 20 percent comes from
hydroelectric, geothermal and other renewable sources. The
high cost of geothermal electricity production, compared
with that of coal, hydro and natural gas, is hindering
the potential development of this energy in the short
term. However, because of its high potential, since 2013
geothermal power has been gaining prominence and is
likely to become one of the key energy sources.
The Government has mandated that geothermal energy
provide at least 9,500 MW (five percent) of the nation’s
electricity by 2025. It has also selected geothermal energy
as one of its major sources of alternative energy in the
second phase of its power development programme.
However, the geothermal energy industry in Indonesia lacks
the know-how to make significant progress, and the remote
locations make it difficult to transmit and distribute
to the national grid. This presents opportunities for
New Zealand, although a coordinated approach is needed
to tap into education, engineering, procurement and
construction services.
Education
Demand for overseas education is high and state-owned
tertiary institutions are unable to meet demand. It is
accepted that education abroad is of better quality than
that available from many local institutions. For this reason
there has been increased interest in the tertiary sector, and
INDONESIA | MARKET GUIDE 3
the teacher and corporate training opportunities it presents.
Many local universities in Indonesia are working with
international education institutions, offering double-degree
programmes.
Information and communication
technologies (ICT)
The Indonesian Government had a target of providing
telephone and information technology (IT) services to all
rural areas in Indonesia by 2015. The Indonesian IT market
was expected to grow at a compound annual growth rate
of 18 percent from 2012 to 2016, and analysts expected
Indonesia to be the best prospect in the ASEAN region for
growth in the ICT sector.
Manufacturing
Indonesia’s manufacturing sector is showing signs of
growth. Demand has increased strongly in recent years,
and investment data suggests that this situation is likely
to continue. At the same time, Indonesia’s rapidly growing
middle class and competitive workforce are luring more
foreign investors into the sector. Increased business
opportunities in the manufacturing sector are therefore
making Indonesia look even more attractive.
Potentially, Indonesia could boost its global market
share in manufacturing, create millions of new jobs and
facilitate structural transformation. To improve overall
competitiveness and sustain growth, the Government
and the private sector need to overcome the main
challenges currently facing the manufacturing industry.
According to the World Bank, these challenges include
strong international competition, particularly from China,
increasing unit labour costs and tighter profit margins.
The bank also notes the micro-level constraints facing
Indonesian firms, such as high transportation and logistics
costs, difficulties getting credit, and a lack of transparency
and certainty in regulations.
BUSINESS CULTURE
AND ETIQUETTE
• Don’t use your left hand to give or receive food
or items.
• Give business cards using both hands.
• When greeting people give a gentle (not full-
strength) handshake.
• Wait to be invited to eat or drink by your host when
food/drink is put in front of you.
• Always try to identify the most senior person in the
room and start with them on entry.
• Some Muslim women do not like shaking hands. If they
extend a hand to shake your hand, then gently shake it;
if they half extend a hand then do the same but
do not touch their hand and then place your hand on
your chest.
• Never point with your finger – use your thumb instead.
• Beckon with your right hand, palm facing downwards.
• Avoid touching children or adults on the head – it is
considered sacred.
• Do not put your hands in your pocket(s), or hips – keep
them clasped in the front or behind your back.
NZTE APRIL 2017
• Don’t point your feet if your legs are crossed; your soles
should be pointing downwards.
• If walking in front of a group of seated people, stoop a
little and extend your right hand towards the ground.
• If you have to blow your nose, use a tissue and do it
discreetly by turning away from others.
General tips
• Only drink bottled water.
• Do not eat food from roadside stalls.
• Malls are open to 10pm every night.
• Use Blue Bird/Silver Bird taxis wherever possible.
• Be aware of your belongings in crowded public
places like terminals, bus stops and
pedestrian bridges.
• While most food bills include a service charge,
staff appreciate tips – around 10 percent is OK.

TRAVEL AND VISITING INDONESIA

Accommodation
Hotel
Fairmont Hotel
Mulia Hotel
Mandarin Oriental Hotel
Sheraton Surabaya
Shangri-La Surabaya
Majapahit Hotel
JW Marriott Hotel Medan
Grand Swiss-Belhotel Medan
Hotel Aryaduta Medan
Sheraton Bandung
Hilton Bandung
General notes: Agoda.com has rates for most hotels in every main Indonesian city.
Room rates and other hotel charges are subject to 10% VAT and 11% service charge
Address Telephone Website/Email
Fairmont Jakarta +62 21 2970 3333 www.fairmont.com
Jalan Asia Afrika No. 8
Gelora Bung Karno
Jakarta
Jalan Asia Afrika +62 21 574 7777 www.hotelmulia.com
Senayan, Jakarta
Jalan M H Thamrin +62 21 2993 8888 www.mandarinoriental.com
Jakarta
Jalan Embong Malang +62 31 5468 0000 www.sheratonsurabaya.com/
25-31, Surabaya 60261
Jalan May. Jend. +62 31 6003 8888 www.shangri-la.com/surabaya/shangrila/
Sungkono 120, Surabaya
65 Jalan Tunjungan +62 31 5454 333 www.hotel-majapahit.com/
Surabaya 60275
Jalan Putri Hijau Medan +62 61 455 3333 www.marriott.com/hotels/travel/mesmc-
Kota Medan 20111 jw-marriott-hotel-medan/
Jalan S Parman 217 +62 61 457 6999 www.swiss-belhotel.com/en/Indonesia/
Medan 20152 Medan/medan#hotel+information
Jalan Kapten Maulana +62 61 457 2999 www.aryaduta.com/hotels_home_medan.
Lubis 8, Medan 20112 php
Jalan Ir. H. Juanda +62 22 250 0303 www.sheratonbandung.com/
No. 390, Bandung
HOS Tjokroaminoto +62 22 8606 6888 www3.hilton.com/en/hotels/indonesia/
No. 41-43, Bandung hilton-bandung-BDOHIHI/index.html

INDONESIA | MARKET GUIDE 4 NZTE APRIL 2017

Visas and immigration Useful phrases
A Visa on Arrival (VoA) can be obtained upon arrival in English Indonesian
Indonesia at the designated airport, seaport or land border Good morning Selamat pagi
checkpoint. VoAs are valid for a maximum stay of 30 days,
Good afternoon Selamat siang
starting on the first day of arrival regardless of the time of
Good night Selamat malam
arrival. VoAs are issued at the discretion of the Immigration
Officer at the point of arrival. Thank you Terima kasih
Requirements: You’re welcome Sama-sama
• Original passport, valid for at least six months upon How are you Apa kabar
the date of entry to Indonesia (holders of temporary/
I’m good Kabar baik
emergency passports or other travel documents are
not eligible to apply for a VoA) Help Tolong
• Return ticket or onward passage ticket Excuse me Maaf
• Visa fee (US$35.00). What’s your name? Siapa nama anda
For information on applying for a visa to visit Indonesia, I’m from New Zealand Saya dari Selandia Baru
please refer to our Foreign Affairs Ministry page.
Safety and security
Transportation
Visit the Safe Travel website for the latest travel advisory
Taxis are the only viable form of transport to or from
updates. New Zealanders in Indonesia are strongly
Indonesian airports. They are widely available but, Blue Bird
encouraged to register their details on Safe Travel.
group is the most reliable; the flagfall tariff is IDR6,000 +
IDR3,000 per kilometre (NZ$0.62 + 0.31 per kilometre)*. Medical services and hospitals
Avoid using unauthorised taxis as they will try to negotiate Early on during your stay – before any emergency arises
a fixed-price fare. – identify the closest medical facility with staff who speak
Car rental is available at IDR750,000 to IDR1,200,000 your language. Find out when it’s open and research its
(NZ$77.93 to NZ$124.68)* per eight-hour hire (multi- reputation, if possible. If you’re in Indonesia for the first
purpose vehicle – driver included). time, bring your overseas medical records with you to
On departure from the airport, tax is payable by cash at the familiarise the local doctors with your medical history.
counter at IDR40,000 (NZ$4.15)* for a domestic trip and Here are some medical providers in Jakarta:
IDR50,000 (NZ$15.58)* for an overseas trip.
* NZ$/IDR based on a rate of IDR9.6. Organisation Address Telephone

Travel to Indonesia from New Zealand International Jalan Puri Sakti +62 21 750 5973
Jakarta, Surabaya, Bali and Medan are the largest hubs SOS No. 10 24-hour
in Indonesia. Cipete assistance centre:
Indonesia is accessible by air by direct flights on South Jakarta +62 21 750 6001
Air New Zealand (Auckland to Bali winter seasonal service), (Jakarta)
Qantas and Singapore Airlines. +62 361 710 505
(Bali)
Typical economy airfares are NZ$2,000 (Singapore Airlines,
Christchurch/Auckland – transit via Singapore – Jakarta).
Global Doctor Kemang Raya 8 +62 21 719 4565
From Singapore, 10 other Indonesian cities are also International South Jakarta 24-hour assistance
accessible: Bali, Balikpapan, Bandung, Lombok, Manado, Medical Center centre:
Medan, Palembang, Pekanbaru, Solo and Surabaya. (24-hour +62 21 718 2029
Currency, credit cards and ATMs service) (Jakarta)
The official currency in Indonesia is the Rupiah (IDR). ATMs
are conveniently located in shopping centres, rural bank
branches, urban office complexes, many convenience stores
as well as in areas that tourists frequent. Many people prefer
to do as much as possible of their banking online or at
the ATM machines to avoid the long queues in the banks
and due to the short banking hours. ATMs operate with
international credit and debit cards affiliated with: Alto,
Maestro, Cirrus, Plus, MasterCard and Visa. International
credit cards are also accepted in most shopping centres,
restaurants and bars without additional charges.

Public holidays
Visit the Office Holidays website for a full list of public
holidays in Indonesia.

INDONESIA | MARKET GUIDE 5 NZTE APRIL 2017

TRADE SHOWS AND
INDUSTRY EXHIBITIONS
The Jakarta International Expo (JIExpo) offers a wide range
of excellent services and venue options for its exhibitors.
It provides modular spaces which can vary anywhere
between 5,000 and 26,000 square metres, depending on
the type of event.
To see the upcoming schedule and list of exhibitors, take a
look at their website.
PRODUCT REGISTRATION
Before you sell food, medication or cosmetics in Indonesia,
it’s important that the product meets all the market’s
safety requirements.
Food products must be registered with the National
Agency of Drug and Food Control (BPOM) before
clearance through Customs.
Importers must also apply for an ML registration number
from BPOM. This registration needs to be renewed every
five years. Usually, the initial process takes around two to
three months, depending on the type of product.
CUSTOMS AND IMPORT
REGULATIONS
Any goods coming from outside Indonesia’s custom
territory are treated as an import. Those goods are
subjected to custom duty with tariffs varying from 0–5
percent, to 5–10 percent and more than 10 percent, based
on the goods classification HS code.
When you are importing goods by sea or air, you must
submit a customs declaration form (PIB) to the Customs
Office and prepay any customs duties/import taxes. There
will be a 10 percent administrative penalty if the deadline is
not met.
SETTING UP OPERATIONS AND
ESTABLISHING A BUSINESS
It’s a good idea to familiarise yourself with guidelines on
setting up a business in Indonesia.
It is also useful to read about doing business in this market.
Restrictions on foreign ownership
Take a look at the US Government’s website or Reuters for
more information.
INDONESIA | MARKET GUIDE 6
TAXATION
Under Indonesian tax law, a company is treated as
a resident of Indonesia for tax purposes if it has an
establishment or place of management there. A foreign
company carrying out business activities through a
permanent establishment (PE) in Indonesia will generally
have the same tax obligations as a resident taxpayer.
For more information, please visit the BKPM site.
OPENING A BANK ACCOUNT
The process of opening a corporate bank account in
Indonesia varies slightly from bank to bank. Once you’ve
completed your Foreign Owned Company registration (PT
PMA) you’ll need to present these documents in order to
set up an account:
• copy of PT tax card (NPWP)
• copy of PT domicile letter
• copy of BKPM investment registration letter (SIUP)
• copy of deed of establishment (AKTA)
• copy of ID card of all board of directors, shareholders
and authorised signatories
• copy of company registration letter (TDP)
• copy of PT deed of establishment’s approval from
the Ministry of Law and Human Rights (Pengesahan
KEPMENHUMHAM).
LOCAL GOVERNMENT
DIRECTORY
Visit the Global Business Guide website for a
comprehensive government directory
www.gbgindonesia.com/en/main/useful_resources/
government_ministry_and_agency_links.php
BUSINESS ASSOCIATIONS
KADIN Indonesia - Business Support Desk (KADIN BSD)
Menara Kadin Indonesia
24th Floor
Jalan HR Rasuna Said X-5 Kav 2-3
Jakarta 12950
www.kadin-indonesia.or.id
www.bsd-kadin.org
OTHER USEFUL WEBSITES
PwC: Doing business in Indonesia
Doing Business in Indonesia
HSBC:
Indonesia country guide
NZTE APRIL 2017
NZTE / EMBASSY CONTACT DETAILS
NZTE and the New Zealand High Commission are co-located in Jakarta:

Organisation Address Telephone Website / Email

New Zealand Trade Sentral Senayan II 10th +62 21 5795 4111 www.nzte.govt.nz
and Enterprise Floor, Jalan Asia Afrika exporthelp@nzte.govt.nz
(8:00am - 4:00pm) No. 8, Gelora Bung
Karno Jakarta

New Zealand Embassy Sentral Senayan II 10th +62 21 2995 5800 www.mfat.govt.nz
(8:00am - 4:00pm) Floor, Jalan Asia Afrika nzembjak@cbn.net.id
No. 8, Gelora Bung
Karno Jakarta

New Zealand Trade and Enterprise (NZTE) is the
Government agency charged with a single purpose:
growing companies internationally, bigger, better
and faster, for the benefit of New Zealand.
We employ 600 people, have over 200 private
sector partners and draw on a global network
of thousands more. We have people based in
50 offices, working across 24 time zones and
40 languages to support New Zealand businesses
in over 100 countries. Our global presence lets us
deliver value to the businesses we support, through
our unique know-how (knowledge and experience)
and know-who (networks and connections).
Our know-how and know-who is expressed in our
Maori name: Te Taurapa Tūhono. Te Taurapa is the
stern post of a traditional Māori waka, which records
valuable knowledge, and stabilises and guides the
craft forward. Tūhono represents connections to
people and an ability to build relationships.
We provide customised services and support to
ambitious businesses looking to go global. We help
them build their capability, boost their global reach,
connect to other businesses and invest in their
growth. We also connect international investors
with opportunities in New Zealand through a global
network of investment advisors.
We call on our Government network and work
closely with our NZ Inc partners and the business
community, to grow our national brand and help
businesses to open doors in global markets.
nzte.govt.nz

Disclaimer: This document only contains general information and is not formal advice. The New Zealand Government and its associated agencies (‘the
New Zealand Government’) do not endorse or warrant the accuracy, reliability or fitness for any purpose of any information provided. It is recommended
that you seek independent advice on any matter related to the use of the information. In no event will the New Zealand Government be liable for any loss
or damage whatsoever arising from the use of the information. While every effort is made to ensure the accuracy of the information contained herein, the
New Zealand Government, its officers, employees and agents accept no liability for any errors or omissions or any opinion expressed, and no responsibility
is accepted with respect to the standing of any firms, companies or individuals mentioned. April 2017