Ebook: How to launch your startup in Indonesia

This is extracted from our Market Expansion ebook, which gives tips on expanding into many Asian countries. Scroll to the bottom to download it.

Boys on a beach. Photo credit: RumahKaia.

So you’re a startup ready to take on Indonesia?

The potential rewards are huge. Google’s and Temasek’s recent study says Indonesia will be the epicenter of Southeast Asia’s digital economy.

All the key ingredients are here: 100 million people online, out of a mostly young population of about 260 million. An increasingly affluent middle class, and a government in support of growing the digital economy.

But Indonesia is a tough market. Here are some things to consider before attempting to conquer the 17,000-island archipelago.

No country for easy business

Indonesia lurks in the middle in the World Bank’s ease of doing business index. It’s worse than most of its Southeast Asian peers such as Malaysia, Thailand, and Vietnam.

You’ll find that setting up a business takes time and investment, especially as a foreigner. As a startup, test the waters first. Facebook and Google waited years before opening offices in Jakarta. Many choose the route of incorporating in Singapore first.

Later you may need to take the plunge. The government is currently figuring out ways to force internet companies to have permanent legal entities here, possibly even store user data on local servers, so keep an eye on this development. It pays off to hire a local legal consultant.

Partner up

Indonesian youth. Photo credit: Seika.

Foreigners can fully own certain types of internet businesses, though conditions apply.

But most startups choose to come to Indonesia by partnering with local entities or forming a new business with local partners.

Thailand’s Moxy, for example, merged with local ecommerce site Bilna and now operates as a regional entity with bases in Thailand and Indonesia.

Localize heavily

Often overlooked: people and culture

Government support

Funding patterns