Doing Business In Indonesia (English Version)

Doing Business In Indonesia 1,2,3

written by Tarugan, Saudaranta (Indonesia Lawyer)

 

 

Doing Business in Indonesian

 

Part I. General

A. Introduction

                Indonesia is a country in Southeast Asia which is the world's largest archipelagoes country with 17,508 islands. It is the world's 4th most populous country, around 264 million in 2019, as well as the most populous Muslim-majority country in the word. The word “Indonesia” derives from the Latin and Greek Indus (Ἰνδός), meaning "Indian", and the Greek nésos (νῆσος), meaning "island". However, Indonesia is also known as “Nusantara” which Indonesian word for the Indonesian archipelago, which originated from old Javanese and literally means "archipelago". The country shares land borders with Papua New Guinea, East Timor, and the eastern part of Malaysia. Other neighboring countries include Singapore, Vietnam, the Philippines, Australia, Palau, and India's Andaman and Nicobar Islands. In the early 20th century, the concept of "Indonesia" as a nation-state emerged, and the independence movement began to take shape. At the end of World War II, Indonesia proclaimed its independence in 1945.

 

1.       Capital city: The capital city is Jakarta, however, in 2019 the government announced a plan to relocate the capital to Kalimantan. The planned city will be built in East Kalimantan. Jakarta is the second-most populous urban area, after Tokyo, in the world. Jakarta's 2019 population is now estimated at 10,638,689. Interestingly, Jakarta reported the highest return on investment for luxury real estate in 2014 compared to any other city on earth. The city is the home of six Forbes Global 2000 companies, two Fortune 500 companies, and four Unicorn companies.

2.       Climate: Indonesia has an almost entirely tropical climate, with the coastal plains averaging 28°C.  The area's relative humidity is quite high, and ranges between 70 and 90 percent. Required clothing is lightweight cotton clothing is advised throughout the year, with an umbrella or raincoat for sudden cloudbursts. No matter where you go, be prepared for high temperatures and humidity. The country is predominantly mountainous with some 400 volcanoes, of which 100 are active.

3.       Economy: The country has abundant natural resources like oil and natural gas, coal, tin, copper, gold, and nickel, while agriculture mainly produces rice, palm oil, tea, coffee, cacao, medicinal plants, spices, and rubber. China, the United States, Japan, Singapore, and India are Indonesia's major trading partners.  Earlier, oil and gas used to be a major foreign exchange earner but rising domestic consumption and stagnant oil production has now made Indonesia, a net importer of oil. Tourism is steadily gaining ground and is emerging as major foreign exchange earner for the country.

4.       Main ethnics: Indonesia is one of the most ethnically diverse societies. Indonesia's motto "Unity in Diversity'" signifies the country's myriad of cultures and ethnicities with all its people living together largely in peace. There are 633 recognized ethnic groups in Indonesia. The six largest ethnic groups that makes up more than two third of 237 million of the country's total population. The major ethnic group are Javanese (41.0 %), Sundanese (15.0 %), Bataknese (3.8%), Malays (3.4 percent), Madurese (3.3 percent), and Betawinese (2,9%) with their particularities in their behavioral speech.

5.       Language: the official language of Indonesia—Bahasa Indonesia—is virtually the same as Malay which is an official language in Singapore, Brunei, Indonesia, and Malaysia, and also being spoken in parts of Thailand and the Philippines. However, most Indonesia speak the language of their ethnic group as their first language, at home and with members of their group.  Indonesia is home to more than 700 living languages.  

6.       Culture and Religions of Indonesia: The Indonesian Constitution guarantees freedom of religion. However, the government recognizes only six official religions: Islam, Protestant Christianity, Roman Catholic Christianity, Hinduism, Buddhism and Confucianism. Indonesia’s population is 86 percent Muslim—and the largest Islamic country in the World, though it is a secular state. Showing any disrespect for the religion could have disastrous consequences.

7.       Legal system: Law of Indonesia is based on a civil law system, intermixed with customary law and the Roman-Dutch law. Though the legal system is based on the old Dutch law legal system, social life as well as the rites of passage is founded on customary or “adat” law, which differs from area to area. “Adat” law has been instrumental in maintaining gender equality in Indonesia. The basic principles, which guide life include the concepts of mutual assistance or “gotong royong” and consultations or “musyawarah” to arrive at a consensus or “mufakat”. Derived from rural life, this system is still very much in use in community life throughout the country. Although you should consult a local legal expert ideally throughout the negotiation process or at the very least before signing a contract. However, do not bring an attorney to the negotiation table, since this may be taken as a sign that you do not trust your counterparts.

8.       Time zone: The Indonesian government recognizes three time zones in its territory: (1) Indonesia Western Standard Time (WIB) —two hours in behind of Korea Time; (2) Indonesia Central Standard Time (WITA) — one hours behind of Korea Time; (3) Indonesia Eastern Standard Time (WIT) —same time Korea time

9.       Government: Indonesia is a sovereign state with a presidential-constitutional republic system with an elected legislature. It has 34 provinces, of which five have special status. The president and vice-president are selected by vote of the citizens for five-year terms. Prior to 2004, they were chosen by People's Consultative Assembly. The President of Indonesia is directly elected for a maximum of two five-year terms, and is the head of state, commander-in-chief of Indonesian armed forces and responsible for domestic governance and policy-making and foreign affairs. The president appoints a cabinet, members of which do not have to be elected members of the legislature.

10.   Currency and Foreign Exchange policy: the local currency of Indonesia is Rupiah (Rp/IDR). Indonesia maintains a liberal foreign exchange system and has few restrictions on transfers abroad, and in general freely allows conversions to and from foreign currencies. The unitary exchange rate allows for fluctuation.

11.   Chinese Indonesian and business: Ethnic Chinese communities can be found all over the world, however, the largest group of ethnic Chinese living outside China can be found in Southeast Asia; some 25 million – of which according to some sources there are 7.2 million live in Indonesia. Chinese Indonesians population makes up a little less than 4 % of the total Indonesian population according to the 2000 census. Some of these Indonesians of Chinese descents speak various Chinese dialects, most notably Hokkien and Hakka. Many Chinese are Christians -a smaller number are Buddhists, Taoists and Confucians. Under president Suharto Regime (1967-1998), Chinese tycoons became extremely wealthy while ordinary Chinese prospered as small businessmen but were regarded with suspicion by many Indonesians. Today Chinese own shops, restaurants, hotels, banks, industries. Only a small percentage are very wealthy. Most are small business owners. In 1995, a study by Australia’s foreign affairs department which said “Sino-Indonesians” controlled 68% of the top 300 conglomerates.

 

 

Part II. Reasons and How to Start Business in Indonesia

 

A.  10 reasons to invest in Indonesia:

·         The world’s 10th largest economy in terms of purchasing power parity, the world's 16th largest by nominal GDP and a member of the G-20.

·         Indonesia is one of South-East Asia Pacific’s most vibrant democracies, emerging as a confident middle-income country.

·         The largest economy in Southeast Asia with country’s GDP per capita has steadily risen, from $823 in the year 2000 to $3,932 in 2018.

·         The world’s third most populous democracy, and Indonesia plays an essential role in the security architecture of the Asia-Pacific.

·         Indonesia’s economic growth is forecast to reach over 5% in the next five years.

·         90 million people expected to join the middle classes by 2030;

·         Growing digital economic ecosystem and massive opportunities in improving efficiency and idle capacity;

·         A growing social enterprise ecosystem and growing number of startups;

·         Growing ease of doing business & better regulations today for foreign investors;

·         Co-investing with like-minded investors is easier today;

 

KEY ISSUES in establishing a foreign-owned company (“PMA company”) in Indonesia:

1. Selection of business sector to invest: the first thing to do is to check whether the business sector that you want to invest is listed on the Negative List Investment (DNI) or not. Foreigners can only invest 100 % in the business sectors are not listed under the Negative Investment List (DNI). Some the sector is partially closed, in that case, the foreign investors must have a local partner who will own the shares alongside.
2. Shareholder compensation: a PMA Company must have, at any given time, at least 2 (two) shareholders, from the establishment until the dissolution. Such shareholders can be individual nationals and/or legal entities.
3. Minimum Paid up Capital: in practice, a foreign company is required at least to state   the authorized capital of the new established the PMA Company more than IDR 10 billion and the  minimum paid-up capital is 25%  the authorized capital which more than IDR 2,5 billion (around USD 250,000), unless otherwise specified in sector-specific laws and regulations. Paid-up Capital is supposed to be deposited fully in the PMA Company bank account. However, at the beginning of the establishment, shareholders are allowed to provide a statement letter stating that they have fully deposited their paid-up capital. Such a statement letter does not eliminate the obligation to fully deposit the capital. Once the PMA Company is established and the bank account is set up, the shareholders must fully deposit their paid-up capital to the bank account.
4. Nominee arrangement: a nominee arrangement is very common in western countries and being legally acceptable but, it is not legally accepted in Indonesia. Indonesia law recognized only legal owners of a company's shares and not beneficial owners who may effectively control voting or economic rights in such shares. Generally, foreign investors are advised of the inherent risks in such structures. However, many foreign investors have put in place such structures .
5. Beneficial ownership rules: Indonesian regulation requires Indonesian companies to determine who its beneficial owners of shareholders and report such information to the authorized agencies. This could potentially affect foreign investors in Indonesia who have invested in restricted sectors through shareholding structures where their legal ownership of Indonesian shares is within permitted limits, but their beneficial ownership of Indonesian shares may exceed such limits
6. A template Articles of Association: It is common to use the standard format of articles of association. However, it is advisable for foreign investors to understand the standard format with a help of a professional services provider. The founders are to regulate all the provisions, both regarding the classification of shares and share prices, how to appoint and resignation procedures for Management Level and also how decisions are made (voting) related to substantive matters, - in the Articles of Association of the company.
7. Directors and Board of Commissioners: a commissioner is a non-executive role of overseeing the company's directors. The directors are responsible for the management of the company. A company has to have at least one commissioner and one director. If the company having more than one director, one of them will carry the title of the President Director. The directors will then have joint responsibilities and liabilities based on the corporate structure in Indonesia. Similarly applied to board of commissioners, If the company having more than one commissioner, one of them will be the President Commissioner.

General Document Requirements for establishment of PMA Company

        Shareholder Document Requirements (for Foreign Legal Entities/foreign individuals):

1.       If the shareholders are foreign entities, a copy of Deed of Establishment and its amendment, Business registration certificate of the foreign entity; and Board of Directors structure of the foreign entity is required (to be translated into English or Indonesian if it is in other language);

2.       Copy of passports of any foreign shareholders (if the investors are individuals);

3.       Copy of passports of any foreign member of the Board of Directors and Board of Commissioner;

4.       A copy of rental agreement between the company and building management. Please note that a residential address (house or apartment) cannot be used as an office address. It is advised to lease a business or commercial area as the office address;

5.       Statement of domicile issued by the company and acknowledged by the building’s management;

6.       Need to reserve the availability of company name: Rules: Minimum 3 words but should be more than two letters;

7.       If all documents are complete, it takes only 2-7 days to complete the process.

 

B. Entering a Contract in Indonesia:

1. Freedom to make a contract: Indonesia law of contract recognizes the principle freedom to contact. The Indonesian Civil Code provides that all contracts which have been legally concluded, have the same force as a legislative act for the parties who had concluded the contract. As a consequence of this open system of the law of contract, the parties are free to set any provisions by making for themselves rules in their contracts, unless it is contrary to the basic rules of legality, justice, good intentions and fairness.
2. General elements for Validity of Contract: Indonesian Civil Code stipulates that for a contract to be valid, it must comply with 4 (four) conditions: (1) consent between the parties who bind themselves; (2) capacity of the respective parties to conclude an obligation;, (3) a certain (specific) subject matter, and (4) a legal cause.
3. Language is matters: Indonesian Law requires that contracts or agreements involve Indonesian entities and organizations, Indonesian citizens or Indonesian government institution, to be drafted in Indonesian language. In order to comply with this law, most companies will prepare their contracts in dual languages, usually in both Indonesian and English. If your contract is made in a foreign language only, this contract will become invalid or ineffective immediately. In 2015, the Supreme Court of Indonesian upheld a lower court ruling which nullified and voided an inter-company loan agreement which are not in the Indonesian language.

C. Property Law

1.       Foreigner cannot legally owned land: Indonesian agrarian law prohibits a foreigner to have a right of ownership (hak milik) over the land in Indonesia. The philosophy behind the 1960 Agrarian provides that Indonesia’s land is a “gift from God” to the Indonesian people and the nature of this relationship is eternal. The land is a “national treasure” to be controlled by the state for the maximum prosperity of the people." Foreigner can have “Hak Guna Bangunan” (a right to use a building – “HGB”) for a certain period of time and then has to be extended. The owner of HGB land is the Indonesian government on Individual. In addition, foreigner can also have a “Hak Pakai” (right of use) which allows you the use of the facilities, but not the ownership. Hak Pakai is also translated as - Conditional Ownership.

2.       Purchase of Property by a foreigner/Indonesian-Foreigner Couple: Under Indonesian law, property is jointly owned after marriage, unless there is a prenuptial agreement.  This means that property owned by the Indonesian spouse also becomes the property of the foreign spouse, which is illegal according to the Agrarian Law. Therefore, the property must be sold within one year of marriage to a foreigner or converted from "hak milik" (right of ownership) to "hak pakai" (right of use) which decreases the value of the property.

3.       Purchasing an Apartment or Office in a high-rise building: Foreigners who reside in Indonesia, or visit the country regularly for business purposes, can purchase a home, apartment or condominium as long as it isn't a part of a government-subsidized housing development. However, foreigners can only hold land-use (hak pakai) deeds, or through strata title deeds. The length of these titles varies as well. Foreigners must also periodically renew their right to use. The initial “Hak Pakai” period is for 25 years, then is renewed for an additional 25 years and finally a 20-year period. This means that foreigners can effectively lease an apartment for up to 70 years.

 

D. Hiring Indonesians and working in Indonesia

§  Types of Employment contract: there are a lot of things to pay attention to when signing an employment-contract in Indonesia. There are two different time frames of specified and unspecified terms. The Employment Contract for a specified term period is done for a maximum 2 years, and can be extended for another 1 year maximum. The agreement’s duration mostly depends on the scope and completion of the job. The employment contract with an unspecified term period may require an initial probation period, which by law has to be no longer than 3 months.

§  Hire Foreign Workers: as employers, you are required to proceed with the following steps in order to employ foreign workers: submit an Expatriate Placement Plan or Foreign Manpower Utilization Plan (RPTKA) to be approved by the Ministry of Manpower or appointed officials before starting your recruitment process. Submission of US$100 per month as a compensation for the Use of Foreign Manpower for each position held by a foreign worker. Registration of insurance programs for foreign workers. Insurance programs must be under insurance companies registered in Indonesia and appointment of Indonesian Companion Employees to transfer the skills and technology from the foreign workers to local workers.

§  Taxes for Foreign Workers: Foreign workers who reside in Indonesia for more than 183 days within a consecutive 12 months, is required to register for NPWP (Taxpayer Identification Number) at the tax service office. Indonesia applies the progressive tax rates for individual taxpayer based on the yearly earnings: IDR 1-50 million: 5%; IDR 50 – 250 million: 15%; IDR 250 – 500 million: 25%; Over IDR 500 million: 30%

 

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Part III

Cross culture, Etiquettes and Tips

 

E. Exploring Regional Differences

            As one of the most ethnically diverse societies, Indonesia has a large number of cultural practices. Local cultural approach is necessary to adopt when dealing with Indonesian, especially, when foreigners do business in a region. Although, Indonesian share some common traits but also it has a difference cultural practices based on each cultural heritages of its ethnic group. Below are briefly introduce the cultural differences on each major ethnic group:

a.     Javanese (41 %): the largest ethnic group in Indonesia. Foreigners, sometimes, think that Javanese represent Indonesians but it partly true! Most Javanese have Hispanic - brown skin with Asian-body proportion but less slating-eyes. Predominantly live in the central to eastern parts of Java Island. Generally, with only a single without family name.  Javanese language has a three level of speaking style, it has a ‘caste’ system and a complex language system - in which words used toward someone who is 'respected' or in higher rank of society is different than the one used for common people. This is one among several reasons why Javanese language was not adopted as a national language despite it is spoken by more than 40% of the population.

Most Javanese people don’t like to complain with what they get. This is also the reason that Javanese are easy to agree and most adaptable to new places. The concept of the life of “nerimo ing pandum” suggests that the Javanese are not very ambitious. Just go through all that must be done. Generally, Javanese will never say what they feel except you force them so hard. Javanese people have intense spirituality and intimate family relationships. They always together even in difficult circumstances. The Javanese emphasize the distinction between refined (halus) and rude (kasar) behavior, and young children who have not yet learned refined behavior in speech, demeanor, attitude, and general behavior are considered "not yet Javanese." A Javanese is a very patient when facing the problem, but in the negative side, lateness becomes very fashionable for Javanese. In general, it’s very hard to see Javanese people angry because Javanese love harmony and are very peaceful. They also prefer to be silent when there is a conflict.

b.     Sundanese (15%): approximately 40 million, Indonesian's second most populous ethnic group. The Sundanese has traditionally been concentrated in the provinces of West Java, Banten, Jakarta, and the western part of Central Java. Similar to Javanese, Sundanese does not have family name, generally only used by royal and noble families. Almost all Sundanese are Muslims. In many areas, Islam is mixed with Sunda traditional customs; one very important aspect of Sundanese religions is the dominance of pre-Islamic beliefs. Sundanese utilizing different language levels denoting rank and respect – a concept borrowed from the Javanese language. Although Sundanese and Javanese possess similar family structures, economic patterns, and political systems, they feel some rivalry toward one another. Although they live on the island of Java, the Sunda do not consider where they live to be "Java" island, but in the land of Sunda, with its own culture

c.     Bataknese: The Bataknese has a family name and put great pride in their family name. They can recognize members by name of the clan that always came behind their first name. Christianity came in about the year 1863 and became the religion of majority of bataknese. Batak is classified into some sub-ethnics, they are Batak Toba, Batak Karo, Batak Simalungun, Batak Mandailing, Batak Pak-Pak, and Batak Angkola. Each of them has its own language and characters. Since they were living isolated in the mountains, and therefore they developed a strong character. Batak people like talking in a loud voice to interest the attention of other people. The appearance of Batak people is very harsh, most of them have square faces with “eagle-eyes”, which make them very sharp when they are looking at you.  Their social life is based on “Dalihan Na Tolu”, (three-legged furnace), is the philosophy of life of the Batak people, one of them is Somba Marhulahula (showing respect to wife's family). It means respect to those with wife family, includes wife of the grandfathers, wife of the fathers, and wife of the children. In the tradition of Batak tribes, one can only marry with the Batak people of different clans, if the marriage is with someone who is not from the Batak tribe, he has to be adopted by one of the Batak clan (different clans) first.

Practical Application in Business:

ü  Foreigners may need to consider the particularity of each ethics group in dealing with business, human resources recruitment, forming team-work, leadership and management style, negotiation and deals approaches.

 

B. General etiquette

Since Indonesia has a diverse ethnic cultures and customs, it is not easy to summarize the general etiquette of this rich traditions, history and culture and the rules of etiquette in each region. Below are just basic pointers to follow in a general social situation in Indonesia:

• Never use your left hand for anything. Don't touch anyone with it, don't eat with it, don't pick things up with it – as it's considered the hand you use to wipe yourself in the bathroom. If you're left-handed and suddenly everyone looks at you with disgust, that's what's going through their minds.
• Remember to remove your shoes or sandals at the door to a house:Don't have holes in your socks. When sitting in the floor women should tuck their legs underneath them, turned down on the floor and men should sit cross legged.
• Don't step over someone's cross legs. Males should sit with their feet crossed at the ankles.
• Use your right thumb to point at things - pointing with the index finger is considered rude.
• Always bend slightly when meeting or greeting an Indonesian older than you or in a position of authority.
• Gift giving etiquette: heavily depends on the ethnicity of the receiver.
• Indonesians like to entertain at home more than at restaurants. Guest often begin eating soon after they arrive. Indonesians believe that visits bring honor to the host, and they warmly welcome all guests. Unannounced visits are common. When a visit has been prearranged it is usual to arrive half an hour after the appointed time.
• Visitors sit when invited to, but will also rise when the host or hostess enters the room, because deference to one’s host is very important. A drink is often served, but a guest does not drink until invited to. Wait for a signal from your host to begin eating or drinking.
• Meals are usually served with forks and large spoons, however, more traditional Indonesian families eat with their hands. Food and sauces are spooned on to the rice, and mixed together, kneaded into a ball and popped into the mouth with the fingers. Bones have to be extracted from fish and meat with one hand. A small bowl of water is often set on the table for the person eating to clean his hand with while eating.
• Men, women and children usually eat together when there are no guests. When guests are present, usually, the men often eat together in the living room, while the women and children eat in different room or after the guess.

C. Ten Tips Doing Business and Negotiation

1. Indonesia is a gracious culture that is polite. Wanting to be agreeable and never wanting to embarrass another, don't assume a positive response means you have agreement. When someone says yes, sometimes, it doesn’t mean yes or no or "say yes but really mean no”, because the culture requires a polite, agreeable response. Indonesians are usually very friendly and polite. Since they prefer to do business with others who treat them with deference and genuinely like them, it is important to demonstrate similar behaviors yourself. Indonesians with Javanese ethnic background, usually speak in quiet, gentle tones. At times, they may even appear shy. However, this only reflects their politeness and respect for others. Conversations may include extended periods of silence, sometimes as long as ten seconds or more. In restaurants, especially in those used for business, keep conversations at a quiet level.
2. Saving face are so important in Indonesia. Communication is generally very indirect, Indonesians may allow someone to proceed incorrectly, even if the result could be disastrous, since correcting him or her might cause embarrassment for the person. Similarly, people may be reluctant to admit if they do not know the answer to a question. When responding to a direct question, Indonesians may answer ‘yes’ only to signal that they heard what you said, not that they agree with it. People in Indonesia embarrass easily, and it's considered very rude to deliberately embarrass someone. This might include raising your voice, or making accusations. Every person’s reputation and social standing rests on this concept. Do not assume that your audience readily understands you. Since saving face is so important in this culture, people will not admit in front of others that they are having difficulties to understand you.
3. Open disagreement and confrontation must be avoided. It rarely hears a direct ‘no.’ Instead, they may give seemingly ambiguous answers such as ‘I am not sure,’ ‘we will think about it,’ ‘this will require further investigation,’ or ‘yes, but…’ Each of these could mean ‘no,’ as does a ‘yes’ that sounds hesitant or weak.
4. Smiles do not always indicate amusement or approval. Frequently, smiling masks embarrassment, shyness, disapproval, and other feelings of distress. Accordingly, Westerners may sometimes observe Indonesians smiling or laughing at what they might consider inappropriate moments.
5. Engaged with “Local Perantara/Intermediary” before initiating business. Negotiations in Indonesia, it is highly advantageous to identify and engage a local intermediary. This person will help bridge the cultural and communications gap, allowing you to conduct business with greater effectiveness. Conflicts and disputes that may arise during a negotiation can be difficult to resolve because Indonesians prefer to ignore or deny them. Use a mediator, or Perantara to mediate the party.
6. Indonesians have little sense of urgency about time. Indonesian dislike being hurried. Meetings may therefore start considerably late. However, Indonesians generally expect foreign visitors to be punctual. Avoid being more than 10 to 15 minutes late. Social events do not require strict punctuality. While it is best to arrive at dinners close to the agreed time, being late to a party by 30 minutes is usually acceptable. With people of high rank, however, it is best to be punctual. If meeting a Chinese Indonesian or anyone of higher rank, it is best to be right on time as a sign of respect. Displaying anger if you have to wait, which happens often, reflects very poorly on you. Meetings start with a lot of small talk, which can be extensive, this allows participants to become personally acquainted. It is important to be patient and let the Indonesian side set the pace. It is unrealistic to expect initial meetings to lead to straight decisions. This should not be interpreted negatively. Expect negotiations to be slow and protracted. Relationship building, information gathering, bargaining, and decision making all take considerable time. Be prepared to make several trips if necessary, to achieve your objectives.
7. People may expect things to be done ‘their way’.  Local business people and officials in Indonesia, especially those who works at regional government level, have only limited exposure to other business cultures. When negotiating business let them set the pace initially until you have had a chance to determine how your interactions are most effective. Correspondence with government officials must be in Bahasa Indonesia. Having your handout materials translated to Bahasa Indonesia is not a must, but it helps in getting your messages across.
8. Indonesians value long-term relationships and strongly group-oriented. Building lasting and trusting personal relationships is therefore critically important to most Indonesians, who expect to establish strong bonds prior to closing any deals. They expect long-term commitments from their business partners and will focus mostly on long-term benefits. People in this country usually do business only with those they know and like. Relationships are based on familiarity, respect, and personal trust, which can take a long time to establish. Business relationships in this country exist between people, not necessarily between companies. That makes it very important to keep company interfaces unchanged. Changing a key contact may require the relationship building process to start over.
9. Shake-hands Culture: Introductions are always accompanied by handshakes using the right hand. Handshakes should be light, and man should wait for women to initiate handshakes. Some Indonesian women may not want to make physical contact with men, in which case it is best to just nod and smile. Smile and make eye contact while doing so.

 

• Gift giving is common in social settings in Indonesia, though less so in business. Giving a gift after signing a contract is viewed very favorably. Give and accept gifts using only the right hand. Do not open gifts in the presence of the giver unless your host did so first.

 

   

The article is written by written by Tarugan, Saudaranta (Indonesia Lawyer)