Doing Business in Indonesia

Indonesia is the largest economy in Southeast Asia and one of its fastest-growing, yet it has never been an easy place to do business. In the 2026 IMD World Competitiveness Ranking it sits 48th of 70 economies — its weakest result in five years, down from a record high of 27th in 2024, and behind its neighbours Singapore (1st), Malaysia (15th), Thailand (26th) and Vietnam (27th). Growth of around 5.1% a year is the bright spot; infrastructure and institutions are the drags. The government has responded by forming a deregulation task force.

The pages in this section cover what a foreign resident actually needs: the cultural landscape, company structures, licensing, labour and the regulatory environment. We give culture the most weight, because that is where deals quietly fail. It is too often reduced to a list of Dos and Don'ts, but real misunderstanding happens deeper, at the level of perception and outlook. Etiquette is only the visible surface.

A few basics

Office hours

Private offices generally run 08:00–17:00 on weekdays with a midday break; banks serve customers roughly 08:00–15:00; shopping malls and supermarkets now open seven days a week, typically until 21:00 or 22:00. These are conventions, not guarantees. They vary by city, branch and institution, and contract sharply around Idul Fitri, when bank branches close for several days even as digital transfers keep running.

Friday is different. Muslim men attend the congregational Jumat prayer, the one daily prayer that must be performed in the mosque, so many offices and government departments extend the Friday lunch break, commonly from about 11:30. Avoid scheduling meetings in that early-afternoon window.

Business culture

Indonesian business is relationship-first and hierarchical, and most of the etiquette foreigners worry about follows from that. Greet the most senior person first. Exchange business cards with both hands and read them before putting them away; a Bahasa Indonesia side signals respect. Dress conservatively; a batik shirt now counts as proper formal wear. Keep negotiations low-key: a soft belum (not yet) or nanti (later) is usually a polite refusal, and losing your temper loses you respect. These norms are strongest in Java, where much of the country's business is done, rather than a pan-archipelago universal.

For company formation, work permits and tax, where mistakes are expensive, Okusi Associates is the authoritative reference.

Contributor: okusi