How to Start a Business in Indonesia?

Indonesia is magnetic. Perhaps it’s the rhythm of island life, the hum of scooters down narrow streets, or the way coconut palms sway lazily against a fiery sunset. This tropical archipelago has become more than a travel destination for many dreamers and doers; it’s a place to build something new.

Indonesia continues to embrace innovation and open its doors to global entrepreneurs. The country’s creative economy is booming, the government is rolling out friendlier investment regulations, and the digital sector is thriving. Your business venture of a cosy café in Ubud, a tech startup in Jakarta, or a sustainable fashion brand in Yogyakarta can come into fruition! That is, with the right groundwork.

Take note that starting a business in Indonesia is about building a life that balances work and wonder, alongside profit margins and legal documents. This country rewards those who arrive with an open mind and a generous heart. Here’s what to know before taking the plunge.

Understand the legal landscape

Indonesia welcomes foreign investment, but the setup process isn’t one-size-fits-all. For most expats, the PT PMA (Foreign-Owned Company) structure is the key to operating legally in the country. It allows foreign entrepreneurs to hold shares and conduct business under Indonesian law. The process involves paperwork, licensing, and navigating sector-specific regulations. Think of it as your first investment in peace of mind.

Location, lifestyle, and local connection

Where you set up shop will shape your experience as much as what you do.

- Bali attracts creative souls — wellness brands, boutique hotels, and digital startups flourish in its sun-soaked culture.

- Jakarta offers fast-paced energy and endless networking for ambitious founders.

- Yogyakarta and Surabaya are gaining ground as creative and industrial hubs, with strong local communities and lower startup costs.

Wherever you choose, success often depends on your ability to connect authentically with the local rhythm. Indonesians value relationships and trust — understanding that can open more doors than any business card. So, take time to learn the culture beforehand, then everything starts flowing naturally. 

The practical side: visas and residency

Before committing, explore Indonesia’s visa options designed for investors and entrepreneurs. The Investor KITAS and Second Home Visa allow for longer stays and business ownership under clear legal frameworks. These evolving policies show Indonesia’s commitment to welcoming international entrepreneurs who want to contribute — not just visit. Learn more about Indonesia Visa Types and the Second Home Visa on our platform. Indonesia has also simplified the visa system!

Finances and compliance: start smart

Setting up a bank account, managing taxes, and staying compliant are crucial first steps. Indonesia has modernised much of its financial infrastructure, making it easier than ever to manage your business digitally. Still, it pays to work with a local accountant who understands current tax rules and reporting requirements. Transparency and proper documentation not only protect your business but also signal professionalism to potential partners and clients.

Sustainability and purpose in business

Conscious entrepreneurship has grown from being more than a buzzword recently; it has stretched out to being a movement. Across Indonesia, new businesses are blending profit with purpose: cafés sourcing coffee from local farmers, designers collaborating with indigenous artisans, and startups tackling waste management with creativity and tech. These ventures resonate deeply with both locals and visitors, proving that doing good is good business. Consumers here are drawn to authenticity — they want to know the story behind what they’re buying.

Sectors with spark

If you’re wondering where the greatest potential lies, Indonesia’s growth is strongest in:

- Digital startups and creative industries

- Eco-tourism and sustainable hospitality

- Ethical fashion and handmade crafts

- Renewable energy and green tech

These are not only profitable paths, yet they also align beautifully with Indonesia’s evolving values around sustainability and community empowerment.