5 Benefits of Moving Factories to Indonesia, Get Them Now
February 07, 2022
Relocating a business is typical to streamline the operations and gain more profits. In terms of business advantage, there are several benefits of finding a rental factory and relocating business to Indonesia.
The Indonesian government is very open to welcoming foreign investment to Indonesia. They show many efforts to lower the entry barrier for a foreign company to invest in this country.
For considerations, here are five benefits of moving business to Indonesia.
Large Domestic Market
With 272 million populations, Indonesia is undoubtedly a large market for any business. Not only that, with a stable growth of GDP at 5-6%, per capita income of the people also increases steadily.
Consequently, it makes the purchasing power of the citizens relatively high. This potential only is attractive for foreign entrepreneurs.
Not only that, but Indonesian people are also popular with their friendly welcome for new brands. As long as the product could offer more value and prestige, it will certainly show a good result.
Low Labor Wage
Indonesia sets the minimum wage at different levels across the country. Although in some cities, the monthly salary could reach above US$ 300, there are still more which are under US$ 120.
It puts Indonesia as one of the ASEAN countries with the lowest labour wage, even compared to Malaysia, Vietnam, and Philippines.
A low level of Indonesian labour wage means lower-cost production. As a result, the company could gain a more significant profit. Mainly when it also targets the local citizen as a market.
Low Cost of Living
Indonesia is still struggling to move from a developing country to a developed country. This condition creates a gap between the living costs in one city.
While the living cost in a big city like Jakarta is considerably high, you still could find more cities with a very cheap living cost.
However, that cost is nothing when you compare it with western countries. So, overall, it's safe to say that the living expense in Indonesia is very cheap, including rent, food, transport and utilities,
How could this benefit your company?
Cheap living costs will maintain the labour wage at a low level. Even though it increases every year, the number will still be relatively low.
To make the country attractive for foreign investment, the Indonesian government has done so many things, including tax relief.
Currently, Indonesia has DTAA (Double Taxation Avoidance Agreement) with over 65 different countries. It will help the company to ease out about tax costs.
For instance, the agreement between Singapore reduces the royalty tax rate from 15% to 10% in art fields and 8% in industry and scientific fields. You can check all tax treaties on https://pajak.go.id/id/tax-treaty.
For the last couple of years, Indonesia has carried out massive infrastructure development from infrastructure to electricity. This provides great support for any business.
Although manufacturing, mining and plantations are still favourites for foreign investors, many others start working in service sectors.
The e-commerce and startup industry has shown tremendous growth in recent years. Of course, this growth is, undoubtedly, related to the improvements in infrastructure and technology.
Are you interested in relocating your business to Indonesia? Start with finding a rental factory for your business. Feel free to check our listing on https://www.slp.id/en/rental-factory.
Call us right now and enjoy the benefits of moving factories to Indonesia as soon as possible.