Indonesia

Indonesia

main_banner.jpg

Picture: Strongest GDP performance among all ASEAN-5 countries
 
 
Picture: Strongest GDP performance among all ASEAN-5 countries
 
Picture: 25 KEKs to be built by 2019
 
 
Picture: 25 KEKs to be built by 2019
 
Picture: Smartphone users expected to total 92 million by 2019
 
 
Picture: Smartphone users expected to total 92 million by 2019
 
Picture: Online sales approaching a yearly total of US$2 billion
 
 
Picture: Online sales approaching a yearly total of US$2 billion
 
Picture: Hong Kong was Indonesia’s 4th largest FDI investor in 2016
 
 
Picture: Hong Kong was Indonesia’s 4th largest FDI investor in 2016
 
Picture: 88 million-plus affluent middle-class consumers
 
 
Picture: 88 million-plus affluent middle-class consumers
 
Picture: In 2016, foreign direct investment grew by 8.4%
 
 
Picture: In 2016, foreign direct investment grew by 8.4%
 
Picture: Java is the No. 1 spot for regional investment
 
 
Picture: Java is the No. 1 spot for regional investment
 
Picture: 30 infrastructure projects as priorities for 2016-2019 period
 
 
Picture: 30 infrastructure projects as priorities for 2016-2019 period
 
Picture: A world of opportunities and a huge funding gap
 
 
Picture: A world of opportunities and a huge funding gap
 

 

Indonesia: Market Profile

Picture: Indonesia factsheet
Picture: Indonesia factsheet

1. Overview

Indonesia is the world's fourth most populous nation. It has maintained political stability and is one of Asia Pacific's most vibrant economies, emerging as a buoyant middle-income country. The country's economic planning follows a 20-year development plan, spanning between 2005 and 2025. It is segmented into five-year, medium-term plans, called the Rencana Pembangunan Jangka Menengah Nasional (RPJMN), each with different development priorities. The current medium-term development plan – the third phase of the long-term plan – runs from 2015 to 2020. It focuses on, among other things, infrastructure development and social assistance programmes related to education and healthcare. To strengthen the country's investment climate and economic growth, the government continues to announce policy reforms intended to cut red tape.

Sources: World Bank, Fitch Solutions

2. Major Economic/Political Events and Upcoming Elections

June 2018
Regional and local elections were held on June 27, 2018 to elect 17 governors, 39 mayors and 115 regents across the country. The elections included gubernatorial elections for Indonesia's four most populous provinces: West Java, East Java, Central Java and North Sumatra.

September 2018
A major earthquake and tsunami killed more than 2,000 people on the island of Sulawesi, around the city of Palu.

December 2018
The eruption of Anak Krakatau caused another tsunami, killing over 420 people and displacing an additional 40,000.

Sources: BBC Country Profile - Timeline, Fitch Solutions

3. Major Economic Indicators

Graph: Indonesia real GDP and inflation
Graph: Indonesia real GDP and inflation
Graph: Indonesia GDP by sector (2017)
Graph: Indonesia GDP by sector (2017)
Graph: Indonesia unemployment rate
Graph: Indonesia unemployment rate
Graph: Indonesia current account balance
Graph: Indonesia current account balance

e = estimate, f = forecast
Sources: IMF, World Bank
Date last reviewed: January 17, 2019

4. External Trade

4.1 Merchandise Trade

Graph: Indonesia merchandise trade
Graph: Indonesia merchandise trade

Source: WTO
Date last reviewed: January 17, 2019

Graph: Indonesia major export commodities (2017)
Graph: Indonesia major export commodities (2017)
Graph: Indonesia major export commodities (2017)
Graph: Indonesia major export commodities (2017)
Graph: Indonesia major import commodities (2017)
Graph: Indonesia major import commodities (2017)
Graph: Indonesia major import markets (2017)
Graph: Indonesia major import markets (2017)

Sources: Trade Map, Fitch Solutions
Date last reviewed: January 17, 2019

4.2 Trade in Services

Graph: Indonesia trade in services
Graph: Indonesia trade in services

Source: WTO
Date last reviewed: January 17, 2019

5. Trade Policies

  • Indonesia has been a member of the World Trade Organisation (WTO) since January 1, 1995.

  • Indonesia is a member of the Association of South East Asian Nations (ASEAN) and a signatory to the ASEAN Free Trade Agreement (FTA), which aims to reduce tariff and non-tariff barriers to trade between member states. ASEAN has also negotiated an FTZs with Australia, New Zealand, mainland China, India, South Korea and Japan. The latter has a separate bilateral FTA with Indonesia.

  • While Indonesia's membership in numerous regional and economic bloc and FTA arrangements has resulted in the country having a very low applied average tariff rate of 2.3% (which is the sixth lowest in East and South East Asia), there are numerous other barriers to trading with the country. There is significant trade bureaucracy (time and costs) involved for supply chains when exporting out of and importing into Indonesia.

  • Import tariffs are mostly imposed on an ad valorem basis in Indonesia. The import duty ranges between 0% and 20% for most items, except for certain items such as alcohol, tobacco and cars, which face duties of up to 150%.

  • Value-added tax (VAT) is applicable on deliveries (sales) of goods and services within Indonesia at a rate of 10%. VAT on exported goods is zero-rated, while imported goods are subject to VAT at a rate of 10%.

  • The average applied most favoured nation tariff is 7.8% for non-agricultural products and 8.4% for agricultural imports. More than 85% of tariff rates are currently in the range of 0-10%. In line with long-standing sectoral support, the highest tariffs apply mainly to motor vehicles.

  • In January 2017, Indonesia relaxed the ban on unprocessed mineral exports in an attempt to boost the economy and ease budgetary pressures. The ban was implemented in 2014 to promote the domestic mineral processing industry and encourage exports of higher value-added mineral products.

  • In June 2018, the Indonesian Ministry of Agriculture introduced a subsidy on hybrid corn seeds, which is expected to increase corn production by 40.5% until 2025. To achieve this goal, it will distribute 40% of the total demand for hybrid corn seeds, which can negatively affect imports of hybrid corn seeds into Indonesia.

  • In August 2018, the Indonesian government announced an increase in tariffs on over 500 consumer goods to 7.5% in order to reduce imports and improve the current account. Since the announcement, the planned number of goods affected by the tariffs has increased from 500 to 900 and some tariffs have increased to 10%. Affected products are primarily consumer goods, as opposed to raw materials, as imported consumer goods can easily be substituted for domestic ones.

Sources: WTO – Trade Policy Review, Global Trade Alert, Fitch Solutions

6. Trade Agreement

6.1 Trade Updates

  • The Indonesia-European Free Trade Association (EFTA) FTA was signed by all parties (Indonesia and EFTA member states Iceland, Norway, Switzerland and Liechtenstein) on December 16, 2018. No date has yet been confirmed for when the agreement will come into force.

  • In April 2018, the African Export-Import Bank and the Indonesia Export-Import Bank entered into an agreement to commit up to USD100.0 million to support businesses and trade activities between Indonesia and African countries.

  • Indonesia is set to become part of one of the largest Asian/Southern Hemisphere FTAs: the Regional Comprehensive Economic Partnership (RCEP). Major negotiations for the eventual conclusion of the RCEP occurred in April 2018.

6.2 Multinational Trade Agreements

Active

  1. Indonesia is a member of WTO (effective date: January 1995).

  2. ASEAN Free Trade Area (AFTA – effective date: January 1993): AFTA reduces tariff and non-tariff barriers between member states; in particular, Indonesia's trade with Malaysia and Singapore is significantly boosted. The 10 members of the ASEAN FTA are: Brunei, Indonesia, Malaysia, Philippines, Singapore, Vietnam, Laos, Myanmar, Indonesia and Cambodia.

  3. ASEAN-mainland China FTA and Economic Integration Agreement (effective date: January 2005 for goods and July 2007 for services): The FTA is a comprehensive economic co-operation between ASEAN member states and mainland China. The goal of the agreement is to eliminate tariffs and address behind-the-border barriers that impede the flow of goods and services.

  4. Japan-Indonesia FTA and Economic Integration Agreement (effective date: July 2008): The FTA is aimed at facilitating, promoting and liberalising trade in goods and services between the parties. Japan is Indonesia's third largest export and import partner. This FTA provides a strong boost to trade ties and helps the country balance its reliance on mainland China.

  5. Pakistan-Indonesia FTA (effective date: September 2013): The FTA allows Indonesia to offer market access to Pakistan for 216 products at preferential rates, including fresh fruits, cotton yarn, cotton fabrics, ready-made garments, sports items and leather goods. Pakistan's offer list to Indonesia includes a total of 287 tariff lines at preferential tariffs; the country has also agreed to give the same treatment to Indonesian palm oil products as provided to Malaysia under the Pakistan-Malaysia FTA. In addition, Indonesia has cancelled its tariffs on imports from Pakistan of the regionally important citrus fruit, kinnow (a type of mandarin), creating a level playing field in the Indonesian market for this product, which is produced in both Pakistan and India.

  6. ASEAN-Republic of Korea FTA and Economic Integration Agreement (effective date: July 2007): The FTA allows 90% of the products being traded between ASEAN and South Korea to enjoy duty-free treatment.

  7. Preferential Tariff Arrangement Group of Eight Developing Countries (effective date: August 2011): The agreement involves countries which are members of the D-8 Organisation for Economic Co-operation, namely Indonesia, Malaysia, Bangladesh, Pakistan, Iran, Egypt, Turkey and Nigeria. The objective of the member countries is to reach a preferential trade agreement to enhance intra-trade and to reach an agreement on administrative assistance in customs matters to support the preferential trade agreement.

  8. ASEAN-India FTA and Economic Integration Agreement (effective date: January 2010): The agreement involves the liberalisation of tariffs on over 90% of products traded between the two regions, including the so-called 'special products', such as palm oil (crude and refined), coffee, black tea and pepper.

  9. ASEAN-Australia-New Zealand FTA and Economic Integration Agreement (effective date: January 2010): The agreement aims to eliminate tariffs on 99% of exports to key ASEAN markets by 2020.

  10. ASEAN-Japan FTA (effective date: December 2008): The agreement includes commitments on trade, investment and official development assistance.

Signed But Not Yet in Effect

  1. ASEAN-Hong Kong FTA (signed in November 2017 and expected to enter into force in early 2019 at the earliest): The deal aims to cover all aspects of trade in goods, such as tariffs, rules of origin, non-tariff measures, customs procedures and trade facilitation, trade remedies, technical barriers to trade and sanitary and phytosanitary measures.

  2. Indonesia-Chile FTA: The FTA will lead to the gradual removal by the Indonesian government of tariffs on 9,308 products with a further 590 products seeing tariffs reduced by either 25% or 50% on the current rate. At the same time, Chile will remove tariffs on 7,660 items, 78% of them immediately after the trade deal enters into force, 2.1% at the beginning of its fourth year and 9.2% in the sixth year.

  3. EFTA FTA: The FTA will help Indonesia penetrate the European market and increase investment flows from EFTA member states Iceland, Norway, Switzerland and Liechtenstein into the South East Asia country. The agreement was signed on December 16, 2018, with no date yet confirmed for when the agreement will come into force.

  4. The Trade Preferential System of the Organization of the Islamic Conference (TPS-OIC): The agreement would see to the promotion of trade between member states by including most-favoured nation principles, harmonising policy on rules of origin, exchanging trade preferences among member states, promoting equal treatment of member states and special treatment for least developed member states, and providing for regional economic bodies made up of OIC nations to participate as a block. The agreement will cover all commodity groups. The OIC comprises 57 members, making a full realisation of such an agreement highly impactful, encompassing approximately 1.8 billion people. Although the Framework Agreement, the Protocol on Preferential Tariff Scheme (PRETAS) and the Rules of Origin have all been agreed on, a minimum of 10 members are required to update and submit their concessions list for the agreements to come into effect. As of January 2019, only seven nations have done so.

Under Negotiation

  1. India-Indonesia Comprehensive Economic Co-operation Arrangement: The arrangement seeks to expand and develop bilateral relations and co-operation in the fields of trade, industry, investment and other economic fields.

  2. Indonesia-Australia Comprehensive Economic Partnership Agreement: The agreement presents potential for increased trade in services with Indonesia. Given the nature of the two economies, services trade is likely to comprise a larger proportion of Australia's total exports than with other countries. Australia's ratification of the CPTPP has partially delayed the signing of the agreement.

  3. Indonesia-Turkey FTA: The FTA will seek to remove factors that hinder trade with Turkey, including import and export duties of some commodities.

  4. RCEP: RCEP is a proposed FTA between the 10 member states of ASEAN (Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam) and the six states with which ASEAN has existing FTAs (Australia, mainland China, India, Japan, South Korea and New Zealand). RCEP will cover trade in goods, trade in services, investment, economic and technical co-operation, intellectual property, competition, dispute settlement and other issues.

Note: Only major FTAs cited
Sources: WTO Regional Trade Agreements database, Fitch Solutions

7. Investment Policy

7.1 Foreign Direct Investment

Graph: Indonesia FDI stock
Graph: Indonesia FDI stock
Graph: Indonesia FDI flow
Graph: Indonesia FDI flow

Source: UNTCAD
Date last reviewed: January 17, 2019

7.2 Foreign Direct Investment Policy

  1. Government bodies are responsible for foreign direct investment (FDI) promotion, licensing and regulations. The Investment Co-ordination Board (BKPM) serves as an investment promotion agency, a regulatory body, and the agency in charge of approving planned investments in Indonesia.

  2. Indonesia restricts foreign investment in some sectors through a 'Negative Investment List'. The Negative Investment List aims to consolidate FDI restrictions from numerous decrees and regulations in order to create greater certainty for foreign and domestic investors. There are a number of business operations in which foreigners are explicitly barred from participating. These include the production of alcoholic beverages, as well as the ownership of public museums, historical sites and casinos. In addition, FDI in other sectors faces a variety of restrictions, most of which include requirements for special licences and/or caps on foreign ownership. Some of these more restricted industries include mining and finance. The negative list was last revised in 2016, but is set for an update in 2019 to allow full foreign ownership in 25 industries so as to attract more investment into the country following disappointing FDI flows in 2017-2018. The previously capped industries include:

    • Ecotourism in forestry areas
    • Oil and gas construction
    • Offshore oil and gas drilling
    • Geothermal drilling and geothermal survey services
    • Operation and maintenance of geothermal facilities
    • Power plants with capacities of more than 10 megawatts
    • Testing service for high-voltage electrical installations
    • Polling services
    • Art galleries and theatres
    • Land transportation without any specific tracks
    • Overseas sea transportation of passengers, excluding cabotage
    • Data communication services
    • Fixed and mobile telecommunication networks and content services
    • Call centres and other value-added telephone services
    • Internet service providers, internet telephony services for public purposes and internet interconnection services
    • Job training
    • Pharmacy industry for investment of more than IDR100 billion (USD6.8 million)
    • Acupuncture facilities
    • Pest control/fumigation services

    In addition to these newly liberalised industries, the following previously closed industries are now open to foreign ownership:

    • Surveyor services
    • Leasing of construction machinery
    • Leasing of other machinery

    Finally, the following sectors/industries will no longer require special recommendations from the government:

    • Cigarette industry
    • Wood processing operations
    • Crumb rubber
    • Cyclamate, saccharin, or artificial sweeteners
    • Coral or ornamental coral cultivation
    • Medical equipment
    • Banks and laboratories for cell and tissue culture

  3. Foreigners cannot effectively own land in Indonesia in urban and rural settings. They can obtain formal rights to use the land for a certain period for purposes such as mineral expropriation, agriculture, building and commercial purposes, by forming a legal entity (company) incorporated according to Indonesian law and domiciled in Indonesia. Businesses can purchase apartments and office space in Indonesia valid for a period of time, if various stringent stipulations are complied with. It still remains a difficult and time onerous process.

  4. In order to conduct business in Indonesia, foreign investors must be incorporated as a foreign-owned limited liability company in Indonesia (PMA). Investors are also required to participate in the Workers Social Security Programme or BPJS.

  5. Foreign investors are generally prohibited from investing in micro, small and medium enterprises in Indonesia, although the 2016 Negative Investment List opened some opportunities for partnerships in farming, catalogue and online retail.

  6. The Indonesian government is attempting to ensure that it maintains a stake in the exploitation of the country's national resources by maintaining that foreign-owned mining companies must gradually divest 51% of its shares to Indonesian interests over 10 years, with the price of divested shares determined based on fair market value and not taking into account existing reserves. Under new proposed oil and gas laws, the state's national oil company will have right of first refusal over any new oil and gas contracts in Indonesia.

  7. The Indonesian government expects foreign investors to contribute to the training and development of Indonesian nationals, allowing the transfer of skills and technology required for their effective participation in the management of foreign companies. As a general rule, a company can hire foreigners only for positions that the government has deemed open to non-Indonesians. Employers must have training programmes aimed at replacing foreign workers with Indonesians.

  8. High regulatory uncertainty exists in the mining, oil and gas, and construction industries. Indonesia regularly issues and reverses various policies on export bans, taxes and licensing requirements which create significant investor uncertainty in these sectors.

  9. The government has introduced a new incentive for investments of between IDR100.0 billion and IDR500.0 billion in eligible sectors, namely a 50% corporate income tax cut for a five-year period.

Sources: WTO – Trade Policy Review, ITA, US Department of Commerce, Fitch Solutions

7.3 Free Trade Zones and Investment Incentives

Free Trade Zone/Incentive ProgrammeMain Incentives Available
Batam Island Free Trade Zone (FTZ)• Largest FTZ located just south of Singapore (bonded zone)
• Investors are not required to apply for additional implementation licenses (location, construction, and nuisance act permits and land titles)
• Foreign companies allowed 100% ownership
• Import duty, income tax, VAT and sales tax exemption on imported capital goods

Sources: US Department of Commerce, Fitch Solutions

8. Taxation – 2019

  • Value Added Tax: 10%
  • Corporate Income Tax: 25%

Source: Directorate General of Taxes

8.1 Important Updates to Taxation Information

  • A 57% excise tax on e-cigarettes was effective from July 1, 2018.
  • Inline with Indonesia's commitment to implement Base Erosion and Profit Shifting Action 13, Indonesian parent entities or Indonesian subsidiaries of multinational enterprises which meet certain conditions are required to prepare and file a Country-by-Country Report to the DGT starting with the 2016 tax year.

8.2 Business Taxes

Type of TaxTax Rate and Base
Corporate Income Tax
25%
Capital Gains Tax25% on profits
Withholding Tax (dividends)Dividends paid domestically to a resident :15%. Dividends remitted to overseas shareholders are subject to a final 20% withholding tax, unless a tax treaty provides a lower rate.
Withholding Tax (interest, royalities)Residents are subject to a creditable withholding tax of 15% with any balance being payable or refundable, while non-residents are subject to a final withholding tax of 20%.
Withholding Tax (branch profits tax)20%. This rate may be reduced under a double tax treaty. Branch profit tax applies regardless of whether the income is remitted to the head office.
Withholding Tax (payments to non-residents)20%
Value Added Tax10% standard rate. VAT on export of goods is zero-rated while the import of goods is subject to VAT at a rate of 10%.
Transfer duty on land and buildingsmaximum rate of 5%, charged to the seller

Sources: Directorate General of Taxes, Fitch Solutions
Date last reviewed: February 6, 2019

9. Foreign Worker Requirements

9.1 Localisation Requirements

A company can hire foreigners only for positions which the government has deemed open to non-Indonesians. Employers must have training programmes aimed at replacing foreign workers with Indonesians. The foreign worker must meet education, work experience and Indonesian language requirements and commit to transfer knowledge to an Indonesian counterpart.

9.2 Obtaining Foreign Worker Permits for Skilled Workers

Staying in Indonesia for work purposes for a long period (or anything over five weeks) requires the approval of the Immigration Office in Indonesia. Foreign workers must have the necessary visa and work and stay permits, all of which can be applied for by the sponsor or counterpart in Indonesia at the Immigration Office in Indonesia. Foreigners can only be issued with limited or temporary resident visas for a maximum period of 12 months, with the possibility of extension; although, this is again subject to approval from the Immigration Office. The process of obtaining a visa and work permit for foreigners in Indonesia is lengthy, taking an average of three months. It is also a bureaucratically complex process. The temporary resident visa can only be obtained if the applicant has a sponsor or counterpart in Indonesia to help them obtain the visa by applying to the Immigration Office.

9.3 Visa/Travel Restrictions

Given that Indonesia has a significant tourism industry, there are many countries (such as those in the European Union and those party to the Asia-Pacific Economic Co-operation Agreement) whose citizens can obtain visas on arrival in order to enter Indonesia for periods of up to 30-60 days. This means that Indonesia is an easy country to enter for business trip purposes.

Sources: Government websites, Fitch Solutions

10. Risks

10.1 Sovereign Credit Ratings


Rating (Outlook)Rating Date
Moody's
Baa2 (Stable)13/04/2018
S&P GlobalBBB- (Stable)19/05/2017
Fitch Raings
BBB (Stable)02/09/2018

Sources: Moody's, S&P Global, Fitch Ratings

10.2 Competitiveness and Efficiency Indicators


World Ranking
2016201720182019
Ease of doing business Index
109/189
91/190
72/190
73/190
Ease of paying taxes Index
115/189
104/190114/190112/190
Logistics Performance Index
63/160
N/A46/160N/A
Corruption Perception Index
90/176
96/18089/180N/A
IMD World Competitiveness48/6142/6343/63N/A

Sources: World Bank, IMD, Transparency International

10.3 Fitch Solutions Risk Indices


World Ranking
2016201720182019
Economic Risk Index
N/AN/A37/202
46/202
Short-Term Economic Risk Score
68.168.169.2
67.5
Long-Term Economic Risk Score67.968.569.067.4
Political Risk IndexN/AN/A94/20294/202
Short-Term Political Risk Score72.972.970.6
70.6
Long-Term Political Risk Score67.9
68.563.2
63.2
Operational Risk IndexN/AN/A83/20182/201
Operational Risk Score52.2
52.2
52.6
52.5

Source: Fitch Solutions
Date last reviewed: January 17, 2019

10.4 Fitch Solutions Risk Summary

ECONOMIC RISK
Indonesia's short-term economic risk is constrained by an inefficient tax system and reliance on resource revenue, while its long-term economic risk is dragged down by the poor quality of government expenditure and the high volatility of its currency.

OPERATIONAL RISK
There are various opportunities for investment in Indonesia, which is South East Asia's largest economy. The manufacturing, ICT, financial services, oil and gas, and infrastructure sectors all represent attractive options for FDI, while portfolio investment, through increasingly sophisticated local financial markets, is a key source of capital inflows. Furthermore, businesses in Indonesia are able to make use of the country's strategic location on vital global shipping lanes which paired with the various port projects happening in Indonesia bodes well for the future.

Source: Fitch Solutions
Date last reviewed: January 17, 2019

10.5 Fitch Solutions Political and Economic Risk Indices

Graph: Indonesia short term political risk index
Graph: Indonesia short term political risk index
Graph: Indonesia long term political risk index
Graph: Indonesia long term political risk index
Graph: Indonesia short term economic risk index
Graph: Indonesia short term economic risk index
Graph: Indonesia long term economic risk index
Graph: Indonesia long term economic risk index

100 = Lowest Risk, 0 = Highest Risk
Source: Fitch Solutions Political and Economic Risk Indices
Date last reviewed: January 17, 2019

10.6 Fitch Solutions Operational Risk Index


Operational RiskLabour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Indonesia Score52.551.553.256.848.4
East and Southeast Asia average55.456.556.853.854.4
East and Southeast Asia position (out of 18)1112
12811
Asia average48.750.648.246.050.1
Asia position (out of 35)1114
131018
Global average49.649.749.9
49.049.8
Global Position (out of 201)8290
8963101
Graph: Indonesia vs global and regional averages
Graph: Indonesia vs global and regional averages
Country
Operational Risk
Labour Market RiskTrade and Investment RiskLogistics RiskCrime and Security Risk
Singapore82.877.8
88.5
75.0
89.7
Hong Kong81.671.2
88.7
77.1
89.5
Taiwan73.766.4
75.9
73.4
79.2
South Korea72.063.5
71.5
79.8
73.1
Malaysia67.961.6
73.6
75.8
60.5
Macau62.764.2
66.4
52.1
68.0
Brunei62.362.8
60.7
55.1
70.6
Thailand59.456.7
67.2
68.5
45.2
Mainland China58.153.9
57.8
66.2
54.4
Vietnam54.052.6
56.6
55.6
51.3
Indonesia52.551.5
53.2
56.8
48.4
Mongolia51.757.8
53.9
40.9
54.1
Philippines44.051.3
50.8
42.4
31.3
Cambodia41.946.7
43.6
37.6
39.5
Laos37.444.2
34.4
34.1
36.7
Myanmar33.145.5
31.8
30.0
24.9
North Korea32.149.6
19.2
28.8
30.8
Timor-Leste30.140.5
27.9
19.6
32.5
Regional Averages55.456.556.853.854.4
Emerging Markets Averages46.748.145.545.7
46.0
Global Markets Averages49.649.749.9
49.0
49.8

100 = Lowest risk, 0 = Highest risk
Source: Fitch Solutions Operational Risk Index
Date last reviewed: January 17, 2019

11. Hong Kong Connection

11.1 Hong Kong’s Trade with Indonesia

Graph: Major Export Commodities to Indonesia (2018)
Graph: Major Export Commodities to Indonesia (2018)
Graph: Major Import Commodities from Indonesia (2018)
Graph: Major Import Commodities from Indonesia (2018)

Note: Graph shows the main Hong Kong imports from/exports to Indonesia (by consignment)

Graph: Merchandise Exports to Indonesia
Graph: Merchandise Exports to Indonesia
 
Graph: Merchandise exports to Indonesia
 
Graph: Merchandise Imports from Indonesia
Graph: Merchandise Imports from Indonesia
 
Graph: Merchandise imports from Indonesia
 

Note: Graph shows Hong Kong imports from/exports to Indonesia (by consignment)
Exchange Rate HK$/US$, average
7.76 (2013)
7.75 (2014)
7.75 (2015)
7.76 (2016)
7.79 (2017)
7.83 (2018)

Sources: Hong Kong Census and Statistics Department, Fitch Solutions
Date last reviewed: February 13, 2019


2017
Growth rate (%)
Number of Indonesia residents visiting Hong Kong482,022
3.8
Number of Indonesians residing in Hong Kong136,697
1.6

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs - Population Division


2017
Growth rate (%)
Number of Asia Pacific residents visiting Hong Kong54,482,5383.5
Number of East Asians and South Asians residing in Hong Kong2,784,870
1.6

Sources: Hong Kong Tourism Board, United Nations Department of Economic and Social Affairs - Population Division, Fitch Solutions
Date last reviewed: January 17, 2019

11.2 Commercial Presence in Hong Kong


2016
Growth rate (%)
Number of Indonesian companies in Hong KongN/AN/A
- Regional headquarters
- Regional offices
- Local offices


11.3 Treaties and agreements between Hong Kong and Indonesia

  • Indonesia has a Double Taxation Agreement with Hong Kong that entered into force in March 2012.
  • Hong Kong has an Air Service Agreement with Indonesia that entered into force on June 27, 1997.

Source: Inland Revenue Department

11.4 Chamber of Commerce (or Related Organisations) in Hong Kong

Indonesia Chamber of Commerce in Hong Kong
Address: 11/F, Nanyang Plaza, 57 Hung To Road, Kwun Tong, Kowloon
Email: info@inachamhk.com
Tel: (852) 2110 1645    
Fax :(852) 2110 1649

Source: INACHAMHK

Consulate General of the Republic of Indonesia in Hong Kong
Address: 127-129 Leighton Road, 6-8 Keswick Street, Causeway Bay, Hong Kong
Email: info@cgrihk.com
Tel: (852) 3651 0200
Fax: (852) 2895 0139
Website: Consulate General of the Republic of Indonesia in Hong Kong

11.5 Visa Requirements for Hong Kong Residents

Visa-free access valid for 30 days.

Source: Hong Kong Immigration Department
Date last reviewed: January 17, 2019


Cleantech: EXERGY Technology in Transforming…

Mainland China
Location: Philippines, Indonesia
Sectors: CleanTech
Looking for: Majority Shareholdings, Minority Shareholdings
Capital Required (USD):
$ 5,000,000 - $20,000,000

Indonesia - Bantaeng Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Ports, Roads and Highways
Looking for: Open for Negotiation

Indonesia - Bitung Industrial Estate (SEZ)

Southeast Asia
Location: Indonesia
Sectors: Ports, Agriculture and Rural Development, Railways, …
Looking for: Open for Negotiation

Indonesia - Dumai Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Ports, Transport & Logistics Infrastructure, Power Plant
Looking for: Open for Negotiation

Indonesia - Flower Garden

Southeast Asia
Location: Indonesia
Sectors: Agriculture and Rural Development, Manufacturing, Hospitality & Tourism
Looking for: Joint Venture, Open for Negotiation

Indonesia - Flyover (FO) Pantoloan

Southeast Asia
Location: Indonesia
Sectors: Transport & Logistics Infrastructure
Looking for: Public–private partnership
Capital Required (USD):
$ 10267200

Indonesia - Industrial Investment in the…

Southeast Asia
Location: Indonesia
Sectors: Manufacturing
Looking for: Public–private partnership, Open for Negotiation

Indonesia - Java Integrated Industrial and…

Southeast Asia
Location: Indonesia
Sectors: Roads and Highways, Railways, Ports, …
Looking for: Open for Negotiation

Indonesia - Kendal Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Ports, Roads and Highways
Looking for: Open for Negotiation

Indonesia - Konawe Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Ports, Roads and Highways
Looking for: Open for Negotiation

Indonesia - Kuala Tanjung Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Roads and Highways, Ports, Power Plant, …
Looking for: Open for Negotiation

Indonesia - Lake Toba

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism, Urban Development
Looking for: Open for Negotiation

Indonesia - Lake Toba Tourism Infrastructure…

Southeast Asia
Location: Indonesia
Sectors: Urban Development, Hospitality & Tourism
Looking for: Joint Venture, Public–private partnership, Open for Negotiation
Capital Required (USD):
$ 1800000000

Indonesia - Mining of minerals

Southeast Asia
Location: Indonesia
Sectors: Energy & Natural Resources, Mining
Looking for: Open for Negotiation, Joint Venture
Capital Required (USD):
$ 356000000

Indonesia - Morowali Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Ports, Power Plant
Looking for: Open for Negotiation

Indonesia - Mutiara Sis Aljufri airport…

Southeast Asia
Location: Indonesia
Sectors: Transport & Logistics Infrastructure
Looking for: Public–private partnership
Capital Required (USD):
$ 888888889

Indonesia - New Bakaru I & Ii Hydro…

Southeast Asia
Location: Indonesia
Sectors: Power Plant
Looking for: Open for Negotiation

Indonesia - Oil and Gas Block Project

Southeast Asia
Location: Indonesia
Sectors: Oil & Gas
Looking for: Asset Acquisition, Majority Shareholdings, Minority Shareholdings
Capital Required (USD):
$ 35,000,000

Indonesia - Palu Industrial Estate (SEZ)

Southeast Asia
Location: Indonesia
Sectors: Ports, Roads and Highways
Looking for: Open for Negotiation

Indonesia - Palu Outer Ring Road

Southeast Asia
Location: Indonesia
Sectors: Transport & Logistics Infrastructure
Looking for: Public–private partnership
Capital Required (USD):
$ 79703704

Indonesia - Palu – Parigi bypass road

Southeast Asia
Location: Indonesia
Sectors: Transport & Logistics Infrastructure
Capital Required (USD):
$ 430000000

Indonesia - Pantoloan Harbor Development

Southeast Asia
Location: Indonesia
Sectors: Transport & Logistics Infrastructure
Looking for: Public–private partnership
Capital Required (USD):
$ 7173340

Indonesia - Sei Mangkei Industrial Estate …

Southeast Asia
Location: Indonesia
Sectors: Roads and Highways, Railways, Energy & Natural Resources
Looking for: Open for Negotiation

Indonesia - Sibisa Authoritative Zone

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism
Looking for: Joint Venture, Open for Negotiation

Indonesia - Surumana Dam Development

Southeast Asia
Location: Indonesia
Sectors: Public Utilities 
Looking for: Public–private partnership
Capital Required (USD):
$ 88888889

Indonesia - Tangerang project

Southeast Asia
Location: Indonesia
Sectors: Manufacturing
Looking for: Majority Shareholdings

Indonesia - The Karawang Industry City

Southeast Asia
Location: Indonesia
Sectors: Manufacturing
Looking for: Asset Acquisition

Indonesia - Wilmar-Serang Industrial Estate

Southeast Asia
Location: Indonesia
Sectors: Roads and Highways, Railways
Looking for: Open for Negotiation

Indonesia- Biofuels Projects Plant from…

Southeast Asia
Location: Indonesia
Sectors: Oil & Gas, Renewable Energy
Looking for: Asset Acquisition, Majority Shareholdings
Capital Required (USD):
$ 90,000,000

Indonesia- Borobudur Area and Its…

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism

Indonesia- Bromo- Tengger- Semeru

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism
Capital Required (USD):
$ 740Million

Indonesia- Labuan Bajo

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism, Roads and Highways, Ports

Indonesia- Mandalika SEZ and Its Surrounding

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism

Indonesia- Morotai SEZ

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism

Indonesia- Oil and Gas Exploitation

Southeast Asia
Location: Indonesia
Sectors: Oil & Gas
Looking for: Asset Acquisition, Majority Shareholdings
Capital Required (USD):
$ 35,000,000

Indonesia- Tanjung Kelayang SEZ

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism

Indonesia- Tanjung Lesung SEZ

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism

Indonesia- The Project for Creating Power…

Southeast Asia
Location: Indonesia
Sectors: Power Plant
Looking for: Asset Acquisition, Majority Shareholdings
Capital Required (USD):
$ 50,000,000

Indonesia- The Project for Creating Power…

Southeast Asia
Location: Indonesia
Sectors: Power Plant
Looking for: Asset Acquisition, Majority Shareholdings
Capital Required (USD):
$ 90,000,000

Indonesia- Thousand Islands & Jakarta…

Southeast Asia
Location: Indonesia
Sectors: Hospitality & Tourism

Jet Engine Power Generator

Africa
Location: Benin, Burkina Faso, Cabo Verde, …
Sectors: Power Plant
Looking for: Joint Venture, Majority Shareholdings, Minority Shareholdings

Spain, Poland, Israel, Indonesia and Others …

Central & Eastern Europe
Location: Poland, Spain, Israel, …
Sectors: Agriculture and Rural Development
Looking for: Majority Shareholdings, Minority Shareholdings, Joint Venture, …
Capital Required (USD):
$ 21000000 - 30000000

Technology: Clean Eco Fuel

Africa
Location: Benin, Burkina Faso, Cabo Verde, …
Sectors: CleanTech
Looking for: Joint Venture, Majority Shareholdings, Minority Shareholdings

Technology: Waste Treatment Improving Carbon…

Mainland China
Location: Colombia, Indonesia, Malaysia, …
Sectors: CleanTech, Waste Treatment
Looking for: Joint Venture, Licensing

West Semarang water supply PPP

Southeast Asia
Location: Indonesia
Sectors: Water and Sanitation
Looking for: Open for Negotiation