Indonesia

The Republic of Indonesia is a group of islands located in Southeastern Asia bordering Malaysia, Papua New Guinea, the Indian Ocean, and Pacific Ocean. Indonesia is about three times the size of Texas and covers an area of 1,919,440 sq. kilometers. The total population is 251.6 million and is growing at a rate of 6.2% with 50.7% living in urban areas. The capital of Jakarta has a population of 8.8 million with other main cities including Surabaya (3 mil), Medan (2.5 mil), and Bandung (2.5 mil). The people are governed by a republic and are predominately Muslim. The primary language is Indonesian and the local currency is the Indonesian Rupiah.

Indonesia’s economy has achieved significant advances over the past few years in economic policy and market supervision. Indonesian still suffers from high levels of poverty, poor infrastructure, and corruption. Indonesia’s main trade partners are Japan, Singapore, US, China, Malaysia, Thailand, India, Saudi Arabia, South Korea, and Australia. Its primary imports are machinery and equipment, chemicals, fuels, and foodstuffs. Exports include oil and gas, electrical appliances, plywood, textiles, and rubber. Indonesia’s GDP (Purchasing Power Parity) is $1.237 billion and is growing at a real rate of 6.2% with an inflation rate of 4.3%. Indonesia ranked 128st out of 185 countries in the World Bank Group’s Ease of Doing Business Ranking due to strict government controls on business.

Franchising Laws Overview

Disclosure laws:

Franchisor must disclose certain information to prospective franchisees sufficiently in advance.

Relationship laws:

10-year term for a master franchise
Requirements of local language and local governing law
The intellectual property right under the franchise must be registered.
A franchise must be proven “profitable.”

Registration Laws:

Franchisor must register franchise-offering prospectus before signing a franchise agreement with franchisee.
The franchisor shall register the franchise agreement.

Click the links below for articles with more information on Franchising in Indonesia

Indonesia Franchise Market Report (2016)

Trade Mission Generates Excitement for U.S. Brands

Doing Business in Indonesia (2010)

Franchising Rides Waves of Economic Expansion in Asia and Pacific Rim (2007)

* CPI Score is published by Transparency International and relates to the perceptions of the degree of corruption as seen by business people and country analysts and ranges between 100 (highly clean) and 0 (highly corrupt).

**Ease of Doing Business Ranking is determined by the World Bank Group and is ranked out of a possible 185 countries. www.doingbusiness.org

Most recent statistics have been taken from the CIA World Factbook unless noted otherwise.