New guide book available for foreign businessmen
Investment in Indonesia: Guide to investment, trade, taxation and other business matters KPMG Hanadi Sudjendro & Rekan, 1995 203 pages
JAKARTA (JP): Despite heated debates about gross inefficiency and the high costs of its economy, Indonesia, endowed with a wide range of natural resources and with the world's fourth largest population of over 195 million, remains one of the most attractive places for foreign investments in Asia.
One of the indicators is licensed foreign investment commitments, even though they are not wholly identical to actual capital outlays. In the first eight months of this year, US$30.1 billion in new foreign investments (outside the hydrocarbon sector) were licensed, compared to $23.7 billion in all of 1994 and $8 billion throughout 1993.
The impressive investment figures, however, do not mean that identifying business opportunities and setting up businesses in the country is as easy as in developed countries, which have clear-cut rules on almost all aspects of business activities and good business-information systems.
It is no wonder that major international consulting firms find it lucrative advising companies on how to do business in Indonesia or on how to invest here. Most investor guides on Indonesia sell like hot cakes.
One of the latest books providing insight to foreigners intending to set up business or to invest in Indonesia is Invest in Indonesia published by KPMG consulting company.
The 200-page book appears to have been born out of the consulting business experiences of KPMG through its local affiliate, KPMG Hanadi Sudjendro & Rekan, in Jakarta. It is designed mostly to meet the needs of those who have never done business in Indonesia.
The book deals with almost everything a foreign businessperson needs to know about setting up business in Indonesia, including labor rules, the costs of maintaining expatriate staff, import and export rules, banking and other financial services.
Like most other investor guide publications, the book also provides a general overview of the country. It contains all basic facts on history, geographical characteristics, system of government and other useful details.
One part of the book which will be helpful to foreign businesspeople is the outlines of Law No.1/1995 on Limited Liability Companies in chapter nine. This chapter stipulates all important provisions of the law which apply to businesspeople intending to set up a company in Indonesia.
The KPMG investor guide book is also far more elaborate than other similar publications regarding accounting and auditing rules and taxation. This perhaps should be attributed to the KPMG main business line which provides professional services in taxation, audit and investigations, accounting, business advice and management consulting.
The book devotes seven chapters covering 75 pages to technical explanations about all kinds of taxes, including all the double taxation agreements the Indonesian government has concluded with foreign governments, complete with the respective withholding tax rates applied.
The book does not provide any advice nor recommendation to invest in Indonesia. Neither does it include a general depiction of the culture aspect in doing business in Indonesia.
But as the publisher states in the preface, the book is only introductory and general in nature and should not be relied upon as a substitute for detailed advice as a basis for formulating business decisions.
The book nonetheless is worthwhile for foreign businesspeople interested in Indonesia, especially because the contents of the book, different from similar publications of the government, are well structured and designed especially to fulfill the needs of foreign businesspeople. (vin)