Business Opportunities Outside of Jakarta and Bali

The capital district of Jakarta and the paradise island Bali are in the spotlight when it comes to doing business in Indonesia. However, the world’s largest archipelago has much more to offer.

In this article, we take a closer look at business opportunities outside of Jakarta and Bali. The focus is on consumer markets as we leave the topic of natural resources for another article.

Biggest cities in Indonesia

Indonesia is the largest economy in Southeast Asia with an ample quantity of natural resources and immense potential.

Jakarta and Bali are the two most well-known destinations. However, with a population of over 250 million people, there are also many other cities with strategic locations and prospective business opportunities in Indonesia in 2017.

City	Region	Population
Jakarta	Jakarta Province	10.135 million
Surabaya	East Java	2.843 million
Bandung	West Java	2.575 million
Bekasi	West Java	2.51 million
Medan	North Sumatera	2.497 million
Semarang	Central Java	2.067 million
Tangerang	Banten	2.001 million
Depok	West Java	1.869 million
Palembang	South Sumatra	1.561 million
South Tangerang	Banten	1.436 million

Source: World Population Review, 2017

Note that those numbers only account for people living within city limits. Including the neighboring areas the populations can be several times bigger than what is mentioned in the table above. According to Worldometers, 54.6% of the population in Indonesia is living in urban areas and even more people are relocating to cities. This is an indicator of both growing number of solvent consumers as well as increasing labor pool.

For example, the population of Semarang increased by nearly 33% between 2010 and 2014.

GRP per capita

The regional gross domestic product nominal (GRP) indicates the economic situation most comprehensively, showing the market value of products and services produced in regions in a certain time period.

There are many areas in Indonesia contributing to the growth of the GDP with a significant number of GRP.

Rank	Region	GRP Nominal per capita in IDR 2015	GRP Nominal per capita in USD 2015
1.	DKI Jakarta	Rp.174,824,110	$14,726.99
2.	East Kalimantan	Rp.155,136,650	$13,068.54
3.	Riau	Rp.109,832,520	$9,252.17
4.	North Kalimantan	Rp.95,567,290	$8,050.09
5.	Riau Islands	Rp.95,396,450	$8,036.09
6.	West Papua	Rp.68,586,110	$5,777.62
7.	Jambi	Rp.46,004,120	$3,875.34
8.	Bangka-Belitung Islands	Rp.41,960,450	$3,534.92
9.	East Java	Rp.39,903,870	$3,361.46
10.	Papua	Rp.39,850,480	$3,356.96
11.	South Sumatera	Rp.38,834,860	$3,271.41
12.	Bali	Rp. 38,112,660	$3,210.57

Source: Wikipedia List of Indonesia Provinces by GRP per capita

Minimum salaries in Indonesia

There is no set nationwide minimum wage in Indonesia. Minimum wages are revised annually by regional wage councils and vary in different provinces and cities.

In 2017, the minimum wage in Jakarta is Rp.3,355,750 (~US$ 250). In Yogyakarta, on the other hand, it is Rp.1,337,645 (~US$ 100) and can be even lower in smaller cities. Therefore, you can cut down your labor costs significantly by setting up your business outside of Jakarta and Bali.

Finding educated employees in Indonesia

Generally, fresh graduates’ salaries in Jakarta are around Rp. 4 million (~US$ 295) and candidates expect a salary increase of 10-15% with each year of employment.

However, as we already pointed out, you can hire trained workforce in other Indonesia’s regions for half the cost of hiring in Jakarta.

Top universities in Indonesia

QS Top Universities brings out ten best universities in Indonesia. Nine of them are featured in the QS World University Rankings 2018 and most of them are located outside of Jakarta, providing well-educated workforce across Indonesia.

University	Location	World University  Rank 2018	Asia University Rank 2018
University of Indonesia	Jakarta	277	54
Bandung Institute of Technology	Bandung, West Java	331	65
Gadjah Mada University	Yogyakarta	401-410	85
Airlangga University	Surabaya, East Java	701-750	171
Bogor Agricultural Universit	Bogor, West Java	751-800	147
Sepuluh Nopember Institute of Technology	Surabaya, East Java	801-1000	232
Diponegoro University	Semarang, Central Java		240
University of Brawijaya	Malang, East Java		291-300
Muhammadiyah University of Surakarta	Surakarta, Central Java		301-350
Bina Nusantara University	Jakarta	N/A	251-260

Source: QS Top Universities

Test the Indonesian market by outsourcing

If you are in doubt whether Indonesia has enough demand for your goods or services, you can test the market before setting up a company here. Emerhub’s outsourced operations model creates excellent conditions for trying out the market prior to making any investments.

It provides services such as importer of record and employer of record in Indonesia that allow you engage in business activities and hire employees without setting up a legal entity in Indonesia.

After making sure that Indonesia is the market for your business, you can proceed to company registration with confidence and an already existing clientele.  

Closing thoughts

It is evident that Indonesia provides many great business opportunities outside of Jakarta and Bali as well.

Emerhub has over 5 years of experience and can assist you with choosing the best location for your future business as well as with your market entry strategy and company registration in Indonesia.

Contact us for a consultation via [email protected] or leave your details in the form below.
Read more: Simple Guide to Foreign-Owned Company Registration in Indonesia