Doing Business in Indonesia

Each ethnic group has its own language, customary law, dress, music, dance, cuisine and architecture. Despite the regional differences, there are generally accepted Indonesian cultural norms, which, for example, emphasise the family and the community.

Personal friendships are considered important for successful business dealings in Indonesia. An open, friendly demeanour puts everyone at ease. The use of Pak and Ibu (the polite forms of Mr and Mrs) before the name of an Indonesian conveys an understanding of Indonesian etiquette.

When entertaining Indonesian guests in Australia, plan a full itinerary including weekend activities and a program for spouses. Social functions are not complete without formal speeches and even the presentation of a gift such as a company plaque. Ceremony and protocol are considered an important part of a business relationship.

Making the effort to understand Indonesian culture may be the difference between success and failure in business dealings. See Living in Indonesia, which provides abundant practical information and tips, and in particular the following pages:

• Doing Business in Indonesia

• Cross Cultural Training

The website of the Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal – BKPM) provides an excellent source of information on rules and regulations surrounding joint ventures and foreign direct investment. It also provides information about the national and provincial government roles in investment approvals.

The Indonesian Chambers of Commerce and Industry website is an important source of advice on doing business in Indonesia.

Further useful contacts and references are provided on the Contacts and References pages.

Titles on business cards

The use of educational titles on business cards and elsewhere is more common in Indonesia than in Australia.

Dr = PhD in any field including medicine. dr = doctor of medicine (without PhD). Drs is a superseded title indicating a graduate degree in a non-technical field (male). Dra is the female equivalent of Drs. Ir indicates a graduate degree in a technical field such as agriculture, animal husbandry or engineering.

Often the letters for the specific degree are used after the name as well, e.g. Drs M. Djukatana SE. SE = Sarjana Ekonomi (economics degree).

These days, Indonesian education titles are usually indicated as they would be in Australia, e.g. Djoko M Subadi MBA.

Business initials

The initials ‘PT’, ‘CV’ etc (before or after the name of the firm) indicate the legal status of the firm.

• ‘PT’ is an abbreviation of ‘Perseroan Terbatas’ and indicates a limited liability company. Note that ‘PT (Persero)’ denotes a government-owned limited liability company.

• ‘CV’ is an abbreviation of ‘Commanditaire Venootschap’ and indicates a limited partnership.

• ‘FA’ is an abbreviation of ‘Firma’ which is the short form of ‘Venootschap Onder Firma’ and indicates a limited partnership enterprise similar to a ‘Commanditaire Venootschap’ (CV).

• ‘UD’ or ‘KUD’ is an abbreviation of ‘Unit Desa’ or ‘Koperasi Unit Desa’ and indicates a village cooperative.

• PMA = ‘Penanaman Modal Asing’ or ‘foreign investment’

Indonesian addresses

Sample:

Jl Bromo No. 45

Kalapa Lima

Makassar, Sulsel, 9643

Indonesia

‘Jl’ is an abbreviation of ‘jalan’ which means ‘street’ and precedes the name of the street. The house number comes after the street name. Ideally, the whole address should be in Indonesian, but the English name for the province may be used.

Supported by funding from the Australian Agency for International Development ( AusAID ) the Australian Government's overseas aid agency.
Produced by Indonesia Management Specialists ( IMS ).
© 2001-2002 Commonwealth of Australia.
Updated on 22 May 2003.