Last updated: 23 Apr 2012
Doing business
Current business situation
On 10 January 2012 the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) entered into force for Indonesia; Australia’s most ambitious trade deal to date. Australian business is urged to take a close look at the opportunities created by the agreement, as it will deliver real commercial benefit for Australian exporters and investors doing business in Indonesia. More information on AANZFTA.
Business culture
Indonesians, especially the Javanese, consider outward displays of respect very important.
Decision making frequently occurs through consensus. To attempt to force a decision will often have an adverse effect on negotiations.
A common Indonesian term is ‘jam karet’ (rubber time), and is an indication that meetings may not necessarily start on time. Guests may also arrive late due to traffic. RSVPs are frequently not answered, but this does not imply the guest will not come. In fact, for some invitations, you may find guests turn up with one or more friends unannounced.
Indonesians will frequently not ask for clarification if unsure of a matter. Often they will respond with what they believe you want to hear. Moreover, ‘Yes’ can simply mean, ‘Yes, I hear you’ and not ‘Yes, I agree’. Ensure that the message has been fully understood.
Always have plenty of business cards, and treat other peoples’ cards with respect when they are handed to you. Never give or offer your business card (or any items) with your left hand.
Invitations to business functions often state lounge suit/batik. Long-sleeved batik shirts are regarded as formal wear, (ie. equivalent to a dark business suit) and are frequently worn by both Indonesians and resident businessmen in Jakarta. Trousers, shirts and ties are common business attire. Women's business clothing is becoming more dressy. Avoid wearing revealing clothing such as sleeveless shirts or shorts.
Alcohol is not widely consumed and pork is prohibited for religious reasons. However, Indonesians generally tolerate alcohol consumption.
When presented with tea or coffee, always wait for your host or hostess to drink first. It is also considered polite to at least sample the food or drink offered. In a meeting, refreshments are frequently not touched till the end.
Avoid pointing, as this is considered to be rude.
Avoid showing the soles of your feet when seated, as this is considered offensive, particularly if the soles of your feet face anyone in the room. Instead place your feet flat on the ground.
In business, the exchange of gifts is not widely practised.
Forms of address
When formally addressing letters to Indonesians all names should be written in full. With titles included in conversation the same name is often used in both formal and informal contexts, eg. ‘Mr Sudjana Santosa’ or ‘Mr Sudjana’ (use only the given name), but as friendship develops, ‘Sudjana’ would be acceptable.
The titles ‘Drs (male) and ‘Dra’ (female) indicate a university graduate in social sciences or arts. The title ‘Ir’ indicates a graduate in engineering/technical sciences. ‘DR’ is a PhD and ‘Dr’ is a medical graduate.
Links and resources
Government, business and trade
Indonesian Investment Coordinating Board - www5.bkpm.go.id
TradeIndonesia.com - www.tradeindonesia.com
News and media
The Jakarta Post - www.thejakartapost.com
Tempo Interaktif - www.tempo.co
Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.