Introduction
With the global economy projected to undergo a slow recovery in 2021, Indonesia’s GDP is predicted to rebound to 6% growth in 2021[1], restoring investors’ confidence on investing in Indonesia. This is based on the idea that consumers’ confidence will rise and household income will rise as the result of a stronger job market supported by a statewide vaccination campaign and the reopening of Indonesia’s borders.
The Indonesian government has allocated a massive sum of IDR 275 trillion (US$193.24 billion) to its National Economic Recovery Program[2], which is a powerful instrument in assisting the recovery of Indonesian businesses, refuelling the economy, and funding infrastructure, education, and healthcare sectors in its development programs.
With the government determined to execute smart macroeconomic regulations, Indonesia presents huge investment opportunities for foreign investors. This article will discuss some of the promising business industries worth observing and investing in Indonesia.
Healthcare and Pharmacy
Hospitals with more than 200 beds, pharmacys manufacturing, and wholesale sectors are now available to 100% foreign ownership. The healthcare sector is a potential prospect for foreign investors due to its vast market size, growing demand for products treating chronic ailments, and the government’s increased expenditures.
Manufacturing Industry
The Indonesian government has recognised that growing the country’s manufacturing economy will create numerous opportunities in a variety of areas, like electronics, automotive, textiles, footwear, food and beverages, and chemicals. The manufacturing industry will undoubtedly represent a significant investment in enhancing the amenities required by the Indonesian people. Greater facilities can lead to more opportunities, such as job openings, economic growth, and big distribution improvements, while also demonstrating how well investing in Indonesia has worked so far.
As we are now living in the digital age, the opportunity to improve manufacturing in Indonesia is growing. Specifically, the opportunity to track the most popular products in demand and create a system that can ensure that the manufacturing business is growing to produce high-quality and market trust. The government’s interest in this business will soon propel Indonesia to a higher level, particularly in terms of the economic ecology.
E-Commerce
The next promising investment industry is e-commerce, which has had a significant impact on how the market and customer behaviour in Indonesia have altered recently. E-commerce and people’s daily needs are inextricably linked. Even before people know what they need, a customer relationship is critical for understanding their needs. This is the most basic prerequisite for a firm in this industry to thrive in the market.
Another compelling reason to consider entering this sector is the social habits of many Indonesians who value the usage of technology in their daily lives. Indonesia has become one of the world’s most active social media users, implying that access to the Internet market has expanded significantly. The same reason why Indonesian e-commerce businesses continue to thrive. Indonesia’s digital economy has grown at an exponential rate and is predicted to be worth US$ 124 billion by 2025, making the country an ideal place to invest.
Travel and Tourism
Tourism has become big asset on investing in Indonesia, which is why this sector has a higher return on investment. The country’s culture, scenery, unique traditional customs, and over a thousand islands and different local languages have been attracting the world to know more about wonderful Indonesia. The exotic side of Indonesia is an enticing aspect to bring a profitable advantage, helping the economy to grow rapidly in a short amount of time.
Tourism will grow simultaneously with many other industries; retail products for hoteliers, local fashion trends as the local culture begins to be introduced worldwide, also the arts and crafts for the visitors. This sector’s investment growth will definitely bring up other sub-sectors that fall in the same business line. If nationwide vaccination programmes in Indonesia are successful and the country reopens its borders, the tourism sectors offer great investment opportunities for foreigners.
Fast-Moving Consumer Goods
The fast-moving consumer goods (FMCG) industry is one of Indonesia’s largest, contributing considerably to the country’s economic growth. Increasing purchasing power as a result of rising personal income, as well as expanding urbanisation, which alters people’s lifestyles, have been recognised as crucial growth drivers in the sector. This was one of the few industries in the country that was unaffected by the COVID-19 outbreak. In the third quarter of 2020, Indonesia showed a positive overall year-on-year change in the FMCG market value of 8.8%, making FMCG one of the profitable industries that foreign investors should consider for investing in Indonesia.
Infrastructure
The healthcare, manufacturing industry, e-commerce, tourism, and FMCG are all promising areas that will significantly impact how the infrastructure in this country evolves. Surprisingly, it is already obvious, as evidenced by the Indonesian government’s huge efforts in recent years to establish new transportation links in underdeveloped regions throughout Indonesia. A solution that allows additional economic sectors to thrive.
More routes and public transit have been established, resulting in improved access to a much larger area throughout Indonesia. Better infrastructure will provide opportunities for the eastern areas to improve their standard of living, which will naturally propel the economy forward.
Conclusion – Investing in Indonesia: Best Industries for Foreigner
Investing in Indonesia will continue to be a profitable but challenging business for foreign investors as it requires additional work and analysis on all fronts. While you focus on the strategic aspect of your business, Permitindo can assist you with a full range of company incorporation services. If you have any questions, feel free to contact us by sending an email to anita@permitindo.com or simply fill the form below.
[1] https://www.thejakartapost.com/news/2021/01/04/oxford-economics-projects-indonesias-gdp-to-grow-6-in-2021.html
[2] https://www.kemenkeu.go.id/en/publications/news/focus-on-maintaining-recovery-momentum-government-accelerates-national-economic-recovery-program/
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