This Is Why Indonesia So Attractive To Foreign Investors
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VIVA – Indonesia is an archipelagic country known for abundance of natural resources, promised economic potential, and one of ASEAN's main markets.
Because of these conditions, many countries in the world are interested in investing in Indonesia. Investment is one of the efforts and aspects that have an important role in national development. The higher the development and economic growth of a country, usually the investment owned by that country has a high number.
Until now, a number of sectors in Indonesia have the potential to be invested. Until early 2020, there were five main sectors that were busy being investment areas for foreign countries, namely electricity, gas and water, base metals, housing, and mining.
Many foreign countries that have invested in Indonesia such as the United States, Singapore, Hong Kong, Japan, China, and etc.
So, here are 10 reasons why foreign countries to invest in Indonesia:
1. Do Business Get Easier Every Year
In 2017, Indonesia went on 15 places in the ranking list created by the World Bank. In the Ease of Doing Business 2017 statistics, Indonesia has ranked 91st. Much better than in 2013 which was in the 128th position. The increasing economic growth of Indonesia makes it easier for foreign countries to invest in Indonesia every year.
2. Business Sector for Foreign Investors Opener
The Negative Investment List issues a maximum limit for foreign ownership in a company. The limit can be from 0 to 100% depending on the business sector.
For example, the regulation in 2014 for foreign ownership in restaurants was only 51% but in 2016 it increased to 100%.
3. Foreign People Can Have Land in Indonesia
Start from 2015, foreigners can have land in Indonesia, in accordance with Government Regulation no. 103/2015 concerning home ownership for foreigners living in Indonesia.
In Indonesia, foreigners can acquire land by holding certificates of Right to Build and Right to Cultivate.
The existence of the Right of Use allows foreigners to buy a house or apartment in Indonesia.
Foreigners may apply for Right of Use when they own a foreign company, own a local company, and have a work permit and a Limited Stay Permit Card.
4. Decreasing Amount of Corruption
Corruption is bad for Indonesia. However this problem was addressed and eradicated actively.
By the Corruption Perceptions Index, Indonesia is one of the countries that shows steady improvement. Based on Transparency International, the corruption index in Indonesia in 2016 stood at 3.7. This figure is by far the highest in years.
5. One of the Fastest Growing Middle-Class Countries
The growth of the middle class in Indonesia is quite rapid, making it a valuable target for foreign investors. According to McKinsey, around 90 million Indonesians will join the consumer class in 2030.
6. The Population Increase to Close to 3 Million People
Indonesia is the fourth most populous country in the world and continues to grow. Based on Worldometers statistics, the population of Indonesia increases by around 3 million people every year. In addition, demographics are also very favorable for long-term economic growth.
7. Urbanization, the Movement of People to Cities
As people move to different cities, many people will enter the consumer class and use different products and services. This condition is a challenge as well as an opportunity for infrastructure and housing projects to accommodate growing cities.
8. The Growth of Gross Domestic Product (GDP) Never End
Based on data from the World Bank, Indonesia's GDP per capita continues to increase every year. Higher than the Philippines and Vietnam.
9. The Largest Economy in Southeast Asia
By far, Indonesia has the largest population in Southeast Asia and is a regional economic hub. This situation is supported by the largest total GDP and increasing GDP/capita.
10. Low Competition
Getting into Indonesia is not as easy as in many more developed markets. However, this limitation is not used as a barrier but an opportunity. The existence of entry restrictions makes the competition relatively less. Investors who are willing to face the complexities will get benefit.
