With the opening of borders and easing of travel restrictions worldwide, it is becoming more viable to think about expanding your business overseas.
Indonesia is becoming an attractive market as the population of highly connected consumers keeps growing, and the government welcomes investors with progressive policies for businesses. The government of Indonesia seems to realise the country’s economic potential, hence offers business-friendly policies. In 2020, the government passed the Job Creation Bill, commonly known as Omnibus Law. The law revises more than 70 existing laws to attract greater levels of investment, fuel job creation and boost economic growth.
So if you are looking to expand or open your business in Indonesia, here are the top 5 cities you may consider.
Jakarta, capital of Indonesia
Strong Start-up Scene and Block 71 initiative
Jakarta ranked 32 globally and 2nd in Southeast Asia in terms of startup ecosystem. Similar to Bandung and Yogyakarta, Jakarta is part of the Block71 initiative which provides mentorship and growth opportunities in the local and global scene. Startup owners are able to leverage NUS Enterprise’s global network of resources and contacts.
Being the capital city of Indonesia, Jakarta is the most developed in the whole of the country. Jakarta has 2 airports such as the Soekarno-Hatta International Airport (CGK) serving as the main airport serving Jakarta while Halim Perdanakusuma Airport (HLP) accommodates private and short haul flights. Jakarta also boasts an extensive road network.
To increase its connectivity with other cities, Jakarta has plans to build a high-speed railway connecting Jakarta to Bandung and another one from Jakarta to Surabaya.
Ideal Type of Business: Finance, Fintech, Transportation, E-commerce
Surabaya, gateway to the East
Being one of the most important and busiest trading city ports in Asia, it is no surprise that Surabaya would have developed infrastructure. This strength has led Surabaya to develop and maintain a strong and secure financial infrastructure.
There are plans to further develop the city's infrastructure such as planned high-speed railway projects to connect Jakarta and Surabaya. With a secured strong financial infrastructure and increased connectivity, this makes Surabaya a very attractive and safe place to do business in.
Surabaya is the second most populous metropolitan city in Indonesia behind Jakarta. This means that there would be a large workforce ready for your business to leverage from. As compared to other cities like Jakarta, Surabaya has a lower average wage and cost of living which make it a good place for business to incorporate in.
Ideal Type of Business: Export, Maritime, Finance, Fintech
Bandung, the smart city of Indonesia
Part of the Block71 global initiative
As aforementioned, this is an initiative by NUS Enterprise where it serves as a tech ecosystem builder and connector which boost the start-up community. There is a Block71 initiative located in Bandung, providing startup owners an opportunity to be mentored with a huge access to new markets by leveraging NUS Enterprise’s global network of resources and contacts. This would definitely provide you with many business opportunities!
Home to top local universities and other institutes of higher learning (IHL)
Bandung has roughly 50 institutes of higher learning, among which are top tier local universities such as the Bandung Institute of Technology (BTI) and Padjadjaran University. With so many institutes of higher learning in Bandung, this means there is potential for a skilled and educated workforce that is ready to contribute to business in Bandung. This would be highly beneficial for business owners wanting to start their business at Bandung.
Part of China’s Belt and Road initiative
Bandung is part of China's belt and road initiative. The belt and road initiative is a global infrastructure development program by China to improve trade and investment. China and Indonesia would be collaborating together to build a high speed rail that would connect Jakarta and Bandung. This means that Bandung would be more connected, making it easier for investors to invest in Bandung which could ultimately increase access and interest to your business.
Ideal Type of Business: IT, Technology, F&B, Textile/Fashion
Yogyakarta, the education city of Indonesia
Home to the highest number of higher education institutions in Indonesia
Yogyakarta is often called Kota Pelajar by locals which translates as “the city of education”. It is no wonder that Yogyakarta has the highest number of higher education institutions in Indonesia. Not only that, it is also home to the largest and one of the most prestigious universities of Indonesia: the Gadjah Mada University (UGM). In the 2023 QS World Universities Ranking, the Gadjah Mada University (UGM) ranked top in Indonesia, beating out Universitas Indonesia as the best university in Indonesia.
You would probably be wondering, what does this have to do with your business? This would provide your company access to a large capable and skilled workforce. A skilled workforce would be equipped with theoretical and practical knowledge that they can call upon to overcome issues and solve your business challenges.
Part of the Block71 global initiative
Similar to Bandung, Yogyakarta is also part of the Block71 global initiative which aims to build up the tech ecosystem in Yogyakarta. The Block71 global initiative provides mentorship and growth opportunities in the local and global scene. Startup owners are able to leverage NUS Enterprise’s global network of resources and contacts.
Low-cost and improved transport infrastructure
Besides having access to start-up incubators like the Block71 global initiative and a skilled workforce, Yogyakarta wages and rents are lower than Jakarta. This combination of having a low standard of living and a skilled workforce would definitely put your company in an advantageous position for growth.
Yogyakarta’s infrastructure is rapidly developing. Besides the recent completion of the new Yogyakarta international airport, there are other infrastructure projects which includes a highway connecting to the new yogyakarta international airport and another toll highway project which connect Yogyakarta to Bawen.
Ideal Type of Business: Edu-tech, Tech and IT
Batam, beyond tourism
Batam is blessed with a strategic location as it borders Singapore and Malaysia. This has led to the Indonesia-Malaysia-Singapore growth triangle which combines Singapore expertise, infrastructure and capital with natural, labor resources and the abundance of land of Malaysia and Indonesia. With the close proximity to Singapore, Singapore has poured investment into Batam - reaching a record investment value of 3.8 trillion.
Great start-up support: Nongsa Digital Park
Besides pumping investments into Batam, Singapore and Indonesia's government collaborated to open Nongsa Digital Park. The Nongsa Digital Park has infrastructure such as work spaces and facilities to serve as a startup incubator for entrepreneurs to work and grow together.
The Nongsa Digital Park not only serves as a startup incubator, but also a place to train or hire tech staff. This is because Nongsa Digital Park is home to IT academies such as the Apple Developer Academy that prepare young people on how to be an IT programmer or developer!
Relative ease of doing business
Batam has a one-stop investment service that processes business permits. In the one-stop investment service, there will be an online single submission system that aims to not only simplify the process of obtaining business permits for companies, but also increase the speed of business permits granted to companies that are seeking to expand or start their business at Batam.
Ideal Type of Business: Tech and IT, exports and tourism
How Wallex can help you do business in Indonesia
With Indonesia becoming a global export powerhouse, Wallex is here to help you to capture this business opportunity through making international business payments seamless for you!
Find out more about how you can make international money transfers to Indonesia with the Wallex Global Business Account here.
Tips for success to navigate the ever changing economic landscape