Political Challenges of Incorporation in Indonesia

Political Challenges of Incorporation in Indonesia and Potential Solutions from the Government

Continuously attracting business owners and enterprises around the world, Indonesia is a place of flourishing opportunities. Despite the rise and fall of the Indonesian government, the economy is thriving in a positive manner that allows businesses to attain profitability and sustainability. However, some businesses take precautions in expanding their operations in Indonesia because of the political challenges of incorporation.

If you want to optimize your chances of successfully establishing your company in this upward-focused country, here are the challenges you need to understand as it can affect the attractive economy of Indonesia.

 

Infrastructure

Aside from hindering economic development in Indonesia, a low number of quality infrastructures are keeping social improvements from happening. The good thing is, the Indonesian government has already acknowledged this specific concern. As such, the government is going to execute more constructions instead of dwelling on the planning process.

Bribery and Corruption

Although corruption and bribery have been an accepted form of payment for speeding up the process, one should know that this unlawful act must not be tolerated. The presence of corruption within the organization poorly affects good governance and effectiveness. As a way of addressing these political challenges of incorporation, the government resorted to online systems.

 

Unfavorable Economic Situations

Despite the attractive growth of the Indonesian economic scene, there are unfavorable scenarios that may hinder an organization’s growth. These include depreciating rupiah exchange rate, staggering inflation rates, poverty, slow GDP per capita growth, and fiscal instability.

 

Natural Disasters

Indonesia’s beautiful country is along the Pacific Ring of Fire. Because of this, the inevitability of natural disasters will scare businesses that would like to incorporate it in Indonesia. If you want to be prepared for the worst, you must purchase insurance, invest in building an earthquake-proof establishment, and other preventive measures.

 

Public Demonstrations

People in Indonesia pride themselves on having a firm opinion about social and political issues. Because of the unstable political climate and the dangers of having frequent public demonstrations, your operations may be hindered if not threatened. As a business owner, you’re aware of the risks of having your employees risk their safety & put your resources in vulnerable scenarios.

 

The Future of Indonesia: Development Plans and Beyond

The Indonesian government fully emphasizes the need for a stable and growing economy. Because of this, the government commits to reaching the objectives set by 2025. These objectives pave the way for the government to increase the number of investors coming into the country and incorporate it in Indonesia. In addition, these objectives guide strategy-making that aims to eradicate the political challenges mentioned above.

 

Interdependent & interrelated development plans are called:

1. National Long-Term Development Plan (RPJPN – Rencana Pembangunan Jangka Panjang Nasional).

   Serving as the reference point of the whole Indonesian society, it aims to guide the government’s action from 2005 to 2025. All Indonesia’s sectors are not limited to the government, people & businesses are encouraged to take part to achieve national objectives.

2. National Medium-Term Development Plan (RPJMN – Rencana Pembangunan Jangka Menangah Nasional).

   Known as the third phase implementation of the National Long-Term Development Plan. Following the National Long-Term Development Plan, government agencies & ministries must formulate their strategies concerning the objectives set by the government.

3. Masterplan for Acceleration and Expansion of Indonesia’s Economic Development

   An investment of $470 billion was disclosed to result from public-private partnerships. With these measures, the Indonesian government aims to have this country a major player in the Asian economic society.

 

Easy Business Incorporation in Indonesia

If you want to take part in the country’s growing economy, you can minimize the impact of political challenges of incorporation with the help of 3E Accounting. Our professional services will guide you and make it easier for you to incorporate in Indonesia.

You can always rely on 3E Accounting for professional help and expert advice. Contact our team to know more about our Incorporation services.