The Top 3 Regions to Invest in Indonesia
December 20, 2017
Indonesia’s vast geography and many islands can be a challenge to international businesses. With so many places to choose from, it can be hard to decide which supplier to go with and where.
Your supplier’s location can greatly affect pricing, their availability, and may even be a hidden gem of an area that you’ve never heard of.
To help you get the most out of your business relationship with your supplier, we’ve compiled the three most promising regions to invest in Indonesia. Whether they’re still rising or just starting out, getting involved in these areas now can boost your international business endeavors.
1. The Riau Islands – Manufacturing
Off the east coast of Sumatra are a group of tiny islands called the Riau. Their location just south of Singapore has made these islands a prime locale for manufacturing projects at home and abroad.
In 2007, Singapore and Indonesia agreed to make the Riau islands a “special economic zone.” By doing so, the nations have removed all tariffs, and value-added taxes between the major islands in the region and Singapore.
Since then, the Riau have become the home of Indonesia’s largest shipping industry, with manufacturing firms and factories popping up across the region.
While rising wages have recently decreased the allure of the Riau islands, the market is still full of opportunity for international businesses. Plus, there’s less competition. The area’s infrastructure is improving, and access to these islands is easier than in many areas of Indonesia.
Manufacturing suppliers abound, and international businesses should get in before more investors notice. The Riau are a few hidden gems among Indonesia’s 17,000 islands.
2. Java/West Java – Infrastructure
If you’ve heard of Indonesia, you’ve heard of Java. One of the country’s largest and wealthiest island, Java is home to many major cities, ports, and company headquarters. The island is flooded with international business investors, and an opening can be hard to find.
Infrastructure is your way in.
The Government of Indonesia has centralized Java in its plan for infrastructural works. These projects hope to improve tourism and transport within the country. As well, they hope to increase international trade with the improvement of ports and airports, which often require foreign investment.
As projects such as the Jakarta-Bandung High Speed Railway and the Trans Java Toll Road ramp up, so does investment in resource extraction and manufacturing. Mining projects have increased, gas and oil operations are improving, and these materials are flooding the domestic market.
It can’t all stay in Indonesia.
Improving trade capabilities and increased stocks of resources boosts Java’s number of suppliers. These infrastructure projects are some of the main sources of revenue for the Indonesian economy and are at the forefront of the government’s economic plan moving forward.
These infrastructure projects are some of the main sources of revenue for the Indonesian economy and are at the forefront of the government’s economic plan moving forward.
Getting in now makes international businesses available for future projects. Java’s infrastructure plan looks to extend at least into 2019.
3. Bali – Technology
Maybe one of the most exciting areas for international investment in Indonesia is tech start-ups. There’s no place better than Bali, an island off the east coast of Java.
Rapidly, entrepreneurs and techies are flooding to the island for its beautiful landscapes, cheap living, and a growing ecosystem of young upstarts.
The region has been called Indonesia’s Silicon Valley. Internet service providers are beginning to introduce fiber optic technology for improved speeds, and the nation’s infrastructure projects have made brick and mortar companies securely constructed.
This should be music to the ears of international businesses. Low operating, living, and labor costs means cheap tech goods and devices for international businesses.
As well, businesses looking to set up shop in the region have these benefits to look forward to. There are some logistical and governmental hoops to jump through, but the cost-effectiveness of tech operations in Bali makes up for the headaches.
The Bali-craze has run since 2015. If you’re looking to get in on the action, the sooner the better. If you’re having difficulty sending payments to the island, consider using Veem.
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Don’t let payments stop you from taking advantage of global opportunities. Let Veem help you bring your business to the next level.