How to Set Up Your Office in Indonesia
24 November 2022
Many international investors see Indonesia as a promising market for establishing or growing their businesses. There is much room for growth in this jurisdiction’s economy, and its business climate is friendly to entrepreneurs of all nationalities. There are also many opportunities for expansion abroad, and setting up a company in Indonesia is now easier than ever.
Once you deal with the legalities and all the business setup, the next thing to do is to set up an office for your business. Surely you want to meet your clients and house your team in a lovely space, right? Also, one requirement for setting up a company in Indonesia is to have a registered office address.
As a business solutions consultant we know some of the best options to set up your office in Indonesia.
Option 1: Lease A Land or A Property for Your Office
There are two types of leases available to non-Indonesians: government land titles (Hak Pakai) and private leases (Hak Sewa). Rights of use (Hak Pakai) and rights of use for building (Hak Guna Bangunan) are the only types of land ownership transferable to foreigners and domestic corporations.
The Indonesian government is now making the investment climate as supportive as ever by simplifying the regulations for foreign investors to lease land or building in the country. Foreign land ownership is straight out-ruled, but investors can now rent through a PT PMA. Through the PT PMA, foreign investors can acquire either a right-to-build (Hak Guna Bangunan) or a right-to-use (Hak Pakai) title for their investments in Indonesia. Get a local partner to help you with due diligence, contract drafting, and closing the deal when it comes to establishing your PT PMA. Our team at Synergy Pro can help you with that.
Option 2: Rent An Office in Indonesia
Businesses, especially new and expanding ones, often need help deciding whether to buy or rent office space in Indonesia. Both cases have advantages and disadvantages. Some company heads think it’s ridiculous to operate without their workplace. On the other hand, some businesses cannot afford the substantial one-time cost of purchasing an office space, let alone the ongoing costs of maintenance, utilities, and the like.
In addition to the rent, you’ll have to invest a lot of money and work into fixing the office space. Also, if you need to expand or contract quickly, being locked into a long-term lease could be a significant hassle. With the rise of the flexible workspace market, companies can choose a cost-effective, individualized office solution to match their specific requirements.
Some property companies in Indonesia can help you find private office leases tailored to meet your company’s specific needs. You can ask their help to find completely furnished office spaces with high-quality amenities such as Wi-Fi internet access, air conditioning, office furniture, utilities, and interior décor, all of which contribute to a productive working atmosphere.
Option 3: Converting A Villa Into An Office
It is common for foreign companies to start their business in Indonesia from a home office. If you are based in Jakarta or Bali, two of the most popular areas for foreign investors, you can rent a villa or a house and turn it into a home office. Office space can be costly per square foot and requires long-term commitments. Renting a house for your business may be more cost-effective, especially if you find a landlord who offers flexible lease terms. This kind of setting is perfect for small to medium business scales with minimum need for storage. It is also ideal for a business model that leans more toward digital products or services. It is also a great option if you start a company in more remote areas in Indonesia, such as Flores or Sumbawa, where office space might come quite scarce.
Is It Legal to Set Up A Business in a Residential Area?
In some countries, setting up a business in residential areas is restricted or even illegal. However, the Indonesian government lifted the ban on entrepreneurs using their homes as business premises in 2019. This timely regulation enables micro and small businesses to launch new ventures from their homes. You can legally run a business in residential areas in Indonesia as long as it is not a factory or any other type of business from which noise, smoke, and pollution can negatively affect the neighborhood. If your business falls under online or affiliate marketing, consultancies, digital agencies, or cottage industries (home-cooking food, tailor, handmade or artisan products, etc.), you can base your office around residential areas with no worries.
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