Indonesia in General

author : Administrator

Indonesia in General

Indonesia is an archipelago consisting of six main islands: Sumatra, Java, Bali,Sulawesi, Kalimantan and Papua, with a total population of around 248 million(as of 2013).

The total land area of the country is 1,919, 443 square kilometres. The national language is Bahasa Indonesia. English is commonly used and understood in the big cities and across business communities.

Java is the most congested, developed and industrialised island. It is the centre of manufacturing activities, whilst Sumatra is dominated by agribusiness. East Indonesia (Kalimantan onwards) is the resources frontier.

Indonesia’s capital city is Jakarta, situated in Java. Jakarta is the headquarters of all governmental institutions, both domestic and foreign, multinational and premium education or organisations.


Economic Overview

Indonesia is the emerging global power house of South East Asia, accounting for nearly 50% of the GDP of the region and having its own GDP growth consistently averaging around 6%. The Economist describes Indonesia as 'The World’s Most Stable Economy in the Last Five Years.'

Strong domestic demand and particularly private consumption are two key drivers ofIndonesia’s economic growth. Indonesia has a consuming class of around 45million people.

By2030, McKinsey predicts Indonesia’s urban population could reach 71% of thetotal population, up from the current 53%, and contribute 86% of GDP.

Most cities outside of Jakarta/Java that have apopulation of more than 150,000 are forecasted to grow at a much faster rate (more than 6%), with cities with a population between 5 to 10 million people are forecast to grow the fastest(at 9.1%).

This growing population size means that domestic consumption or demand for products will increase significantly along with people’s purchasing power due to better economic circumstances. This condition inevitably will result in the growing potential for manufacturing companies or industries to cater for this increased demand.


Legal and Regulatory Overview

 

Central Bank

Established in 1968, Bank Indonesia is an autonomous institution operating in accordance with Act No 23 of 1999 of the Republic of Indonesia (the Central Bank Law) and its amendments.

 

Bank Supervision

  • Bank Indonesia supervises the banking sector within Indonesia
  • The Ministry of Finance is responsible for regulating Indonesia’s other financial institutions

 

Resident/non-resident status

Acompany is considered resident in Indonesia if it is incorporated in, or domiciled in Indonesia.

 

Bank Accounts

  • Foreign exchange accounts can be held by residents abroad. Resident domestic currency (IDR) accounts are freely convertible into foreign currency
  • Non-resident bank accounts are permitted in both foreign and domestic (IDR) currency; Non-residents are restricted to holding current, savings and time deposit accounts; Non-resident domestic currency accounts are freely convertible into foreign currency
  • A transfer in IDR to a non-resident account is only permitted as part of an underlying economic transaction
  • Non-residents must submit statements to their banks in order to receive payments. Supporting documentation is also required by non-residents to receive payments over IDR500 million
  • Interest can be offered on current accounts
  • Overdraft

 




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