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Doing Business with Indonesia

DOING BUSINESS WITH INDONESIA “Tapping the Opportunities, Tackling the Challenges”

Bahar, Pinsent Masons, BKPM, and AIBC

AUSTRALIA: Sydney, Melbourne, Perth

28 March, 1 – 2 April 2019

 

BACKGROUND

Following the recent signing of Indonesia – Australia Comprehensive Economic Partnership Agreement (IA CEPA) on 4 March 2019 in Jakarta, Indonesia, Bahar[1] and Pinsent Masons[2] took the initiative to run a roundtable series of roadshow in Australia.

The roadshow was initially started with ideas to disseminate IA CEPA to acquaintances of Pinsent Masons in Australia. Taking into account Bahar’s active participation during the IA CEPA negotiations through the Indonesian Chamber of Commerce and Industry (KADIN Indonesia) and the Employer’s Association of Indonesia (APINDO), and good relationships with the Indonesia Investment Coordinating Board (BKPM) and Australia – Indonesia Business Council (AIBC), both Bahar and Pinsent Masons saw the roadshow would receive more positive energy from the involvement and support of BKPM and AIBC and their vast networks in Australia.

The first roadshow was held in Sydney (28 March), followed by the second roadshow in Melbourne (1 April), and concluded in Perth (2 April). Each roadshow was organized by Bahar and Pinsent Masons, and fully supported by BKPM and AIBC.

ACTIVITIES

The Chairman of BKPM, Mr Thomas Lembong, showed his full support by being e-presented through a video tapping. He viewed IA CEPA as “fun and powerhouse”, and expected to see much more conducive relationship between the two countries. The economies from both countries are complementary, where one is a maritime giant (Indonesia), and one is land mass (Australia) – if Indonesia and Australia could join up together and capitalize opportunities throughout ASEAN and Asia Pacific, both will be unstoppable. IA CEPA provides better legal certainty and protection on various areas of opportunities, particularly, trade, tourism, and investment.

Indonesian Consul General based in Sydney, Melbourne, and Perth, respectively conveyed their positive views and remarks on IA CEPA and the roundtable discussion.

President Director of AIBC, Mr Phil Turtle, attended the roundtable in Perth, while other AIBC representatives joined the roundtables in Sydney and Melbourne. AIBC has been supporting businesses in both Indonesia and Australia.

The topic is “Doing Business with Indonesia”, and discussions were focused on business climate, opportunities, and challenges. Considered as high-level discussions, the participants were carefully selected and invited based on their business interests in Indonesia.

There were several selected aspects being discussed, starting with corporate related matters on the negative investment list, licensing, local partner and capital requirements, import, infrastructure, local content requirements, labor, and dispute resolution. Facilities and incentives for business were also elaborated, particularly on taxation (tax holiday, mini tax holiday, tax allowance, and super deductible tax), and Special Economic Zone. We understand that public governance matters have been more highlighted in Indonesia recently, and challenges such as law enforcement, corruption, and transparency were raised. For that matter, a National Regulatory Body is expected to be formed directly under the President.

As for Indonesia’s international commitments, there has been growing awareness and support from business community, including in the regions, towards trade agreements that are being negotiated by Indonesia. On Indonesia and Australia, Indonesian business players welcomed the signing of the IA CEPA and believed that the agreement was not only important to boost trade between the two countries, but it was expected to increase investment in various sectors such as education, health, tourism and human resources development.

Key takeaways

Indonesia is a growing developing country. Thanks to regional autonomy, tourism, and infrastructure development, Indonesia’s economy keeps growing and spreading to regions.

The Government of Indonesia is working to tackle existing challenges in order to provide a better investment climate. Certain improvements are seen in many sectors – nevertheless, there is still a lot of room for improvement.

Business community is supporting the Government through various activities and participations.

We appreciate the supports from AIBC and other IA BPG members. We believe IA CEPA is a new chapter in our businesses, and we hope cross border investments and transactions will be further boosted.

One-on-one meetings

Bahar, Pinsent Masons, and BKPM office in Australia (IIPC) were also welcoming several one-on-one meetings requested by the audience after the roundtables. Several business fields, such as education and energy, had shown their interests in expanding their businesses further into the Indonesian market.

 

CONTACTS

Bahar

  • Mr. Wahyuni Bahar, Managing Partner and Head Committee for Multilateral Institutions and Free Trade Agreement of KADIN Indonesia and APINDO
  • Ms. Jessica Callista, Associate and Deputy Head Committee for Multilateral Institutions and Free Trade Agreement of KADIN Indonesia and APINDO

 

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[1] Bahar is an Indonesian law firm located in Jakarta

[2] Pinsent Masons is a worldwide international law firm based in London, the United Kingdom. In Australia, the firm has offices located in Sydney, Melbourne, and Perth