This post is also available in: 简体中文 (Chinese (Simplified))

Doing Business in Singapore VS Indonesia


One Of The Leading Asean Markets

Indonesia is the world’s largest archipelago known for its incredible natural resources, tremendous economic potential and for being one of the leading Asean markets. Indonesia has followed through significant efforts to make it worthy of jumping 15 places upward from last year in the ranking list by World Bank 2017 statistics for Ease of Doing Business to 91st position. Compared to the 128th position in 2013, the last couple of years give more reason why to invest in Indonesia as the ranking has improved remarkably. Indonesia has a large domestic consumption base, and the country’s middle class with increasing levels of disposable income and purchasing power has grown substantially from 38% of the population or 81 million in 2003 to 56.6% or 131 million in 2010. A World Bank report indicated that the middle class grew by 61.73% over this 7 year period, with over 7 million people being elevated to the middle class segment. Despite the country’s crisis in both politic and economy, the country stands tall among its class. Investors, both domestic and international, find many reasons to place their investment here.


Gives Investors A Wide Range Of Field Option

With a quarter billion inhabitants, Indonesia becomes the fourth largest populated country. This huge crowd will definitely generate a great market for the business you invest in. The best part is that most of those 250 million people are young and in their productive age. It gives you a large workforce to help your business expand. Not to mention that Indonesia has a wide variety of ethnic groups and cultures. With such diversity, your business will have a lot of options to direct its development. Besides its flora and fauna, Indonesia is the home to a wide range of ecosystems. From beaches, small islands, coral reefs, sea-grass beds, sand dunes, tidal flats, coastal mudflats, mangroves, and the list goes on. This gives investors a wide range of field option to work on. When one way doesn’t work, there are still many ways available to achieve successful business in Indonesia. However, one negative point is entering Indonesia is not as easy as in many of the more developed markets. In fact you could say that despite its recent reforms it is still a very complicated market to enter. However, the entry barriers should not seen as a limitation but rather as an opportunity. It will keep the competition relatively low and the ones willing to face the complexities of will be rewarded for it. Although the proper set up may seem a significant investment, the total cost of fulfilling the requirements and acquiring proper licenses since the beginning is in practice smaller compared to the amendments that must be done later.


Most Rapidly Growing Southeast Asian Regions

Singapore is one of the smallest countries in the world, but its main economic indicators, allow it entry to the world’s elite group. The city-state belongs to one of the most rapidly growing southeast Asian regions, it can boast of a well-developed and free economy and low level of corruption (according to the Corruption Perceptions Index 2015, Singapore is ranked in 8th place of least-corrupt countries in the world). According to the World Bank’s ranking Doing Business, Singapore retains the top ranking on the ease of doing business for the tenth successive year (since 2007). The Economist Intelligence Unit‘s Business Environment Rankings declares Singapore to be the world’s most investor-friendly location in 2014-18, retaining its number-one spot from the 2009-13 period. Because of its unique connectivity and infrastructure, Singapore is a global transportation hub with the most extensive and comprehensive network of trade agreements in Asia. Its favourable geographic location allowed Singapore to become one of the world’s best transportation hubs for sea and air cargo. Its container ports are the busiest in the world – they have 200 shipping lines with links to some 600 ports in 123 countries.


Investment Environment

Changi International Airport offers almost 6,900 flights to some 280 cities in 60 countries every week. The Changi Airfreight Centre, with its 24/7 opening hours is a one-stop hub for storing, moving and repackaging goods. The efficient and well organised transport structure has attracted some 6,000 logistics providers to Singapore. Probably the biggest draw for doing business in Singapore is the investment environment. The national reserves are abundant enough to withstand 10 years of recession, the government consistently stays stable with 1 party in power and has one of the lowest corruption rates in the world. To attract businesses ready to invest in Singapore, the government keeps its tax rates and tax laws competitive and takes a strategic, holistic approach towards stewardship of key pillars of the economy, such as petrochemicals, electronics, and clean energy. The country has placed a great deal of commitment into developing a strong domestic regulatory framework to protect IP rights. It is currently rated the best place in Asia and 4th in the world for IP rights protection in the Global Competitiveness Report 2015 – 2016.