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Indonesian firms invited to expand to attractive countries
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Expand your business in Singapore
I
ndonesian entrepreneurs have to take two important questions into consideration when they finally take their companies on that quantum leap to expand to foreign countries.
The questions are: Which foreign country, and which foreign partner? These questions will become critical once they have identified the prospective destination country and ideal business entity to assist in their overseas expansion.
Before we present the five highly attractive foreign countries for Indonesian companies’ overseas expansion, we will first explain the difference between a corporate branch and subsidiary, a vital distinction in all business expansions.
A branch is merely the geographical extension of the Indonesian parent company in a different jurisdiction. A branch conducts the same activities as the parent company, while it is a legal entity that remains subordinate to and dependent on the parent company. Branches do not represent separate legal entities, although the parent company must register all branches to obtain licenses for their operation.
Meanwhile, a subsidiary must be registered as a separate legal entity in the chosen jurisdiction. The parent company can register and administer subsidiaries under a different company name while directing it to engage in different or additional commercial activities outside the parent company’s specializations. The parent company is also not liable for its subsidiary’s debts and obligations.
Indonesian companies can enter a new jurisdiction through either a branch or a subsidiary. Possessing their own characteristics, the two options each offer promising ways to penetrate a different market and operational zone.
The list below presents some of the countries to where an Indonesian entrepreneur can choose to expand his or her company:
- Singapore: A financial hub with a friendly business climate and low taxes, Indonesian investors can request the services offered by a firm that specializes in opening companies in Singapore to ensure that the process is as smooth as possible.
- Japan: A perpetually growing economy with an environment where innovation takes the front seat, these are two important reasons why Japan is a viable option for corporate expansion. Its highly educated workforce and several research and development incentives are also key factors.
- Hong Kong: One of Asia’s financial hubs, Hong Kong can be seen as an alternative to Singapore. The two locations offer similar business advantages; however, Hong Kong has a distinct advantage compared to Singapore, as it is located very close to Mainland China. Working with a team of specialists in opening companies in Hong Kong is an option for Indonesian investors.
- Thailand: Expanding to the Thai market allows Indonesian investors to benefit from good infrastructure and good foreign direct investment policies (with emphasis on selected business fields).
- Ireland: A location in Europe with important advantages for doing business, Ireland offers a low corporate income tax rate, investment incentives as well as a talented and flexible workforce. Moreover, investors can receive complete assistance on how to set up an Irish company.
An Indonesian company with plans for international growth can open a branch or a subsidiary in the jurisdictions described in this article. You can also explore different business opportunities in other markets.
