Indonesia’s startup ecosystem has been thriving and proving its early adopters correct, and the Indonesian government, spearheaded by the Ministry of Communications and Informatics, wants to keep the momentum by offering support and incentives to foreign investors in the space.
Startup scene boom
In recent years, the Indonesian startup scene has been enjoying tremendous growth from multiple sectors, and the pandemic has revealed new industries that have vast potential in the region.
While promoting a growing ecosystem with Gerakan Nasional 1000 Startup Digital (1000 Digital Startups National Initiative), the Indonesian government now puts in place investor-friendly policies such as the push to exempt foreign investment from minimum investment requirements. The initiative allows foreign direct investments to enjoy some favorable manpower regulations, such as incentives for priority sectors and tax cuts.
“If you’re an investor, you’ll be tapping into not only Indonesia but also the entire Southeast Asia and Asia-Pacific regions,” says Semuel Abrijani Pangerapan, Director General for Informatics Application, Ministry of Communications and Informatics. “The return for your investment is going to be bigger than you can expect while being among the ones who support the advancement of multiple societies.”
New growth industries
Speaking of the most promising sectors, the country has seen funding being mainly focused on EdTech, Fintech, and SaaS for these past few years. However, the pandemic has shifted the market and logistics, manufacturing, and delivery services have risen to be among the sectors with most potential for growth.
“Particularly for the top manufacturing countries like Japan, Indonesia has played an important role to provide manufacturing facility resources. Many startups have moved rapidly to adapt the manufacturing ecosystem, while digitizing the industry with SaaS-enabled solutions,” said Chendy Jaya, CEO of Imajin, a marketplace for manufacturers in Indonesia.
All these, plus the over US$190 billion fund allotted by the Indonesian government for its National Economic Recovery Program has made Indonesia a prime market for investors. According to a report by Asian Development Bank (ADB), Indonesia’s economy is expected to enjoy 3.5% growth in 2021 and by 4.8% in 2020 despite the significant impact of the pandemic.
Programs for Japan Investors
To further sustain this momentum, the Ministry of Communications and Informatics continues to develop and implement programs aimed to foster connections between Japanese investors and Indonesian startup founders such as the upcoming Joint Exhibition & Junction of Startup Landscape in Indonesia or JEJALA ID, a four-month networking event.
It will hold roadshows, workshops, and seminars for investors and founders in Europe, Singapore, Japan, and the United States. Registration for Japan’s Investors is ongoing until October 28th, 2021, and the first pre-event roadshow titled “Addressing The Myth Surrounding Indonesian Startup Investment” – will be held on October 29, 10:00-11:00 JST for participants representing Japan.
It will feature esteemed business executives such as Hiro Kiga, founder of FX and a cross-border payment solution company, Wallex; Chendy Jaya, CEO of Imajin; Semuel A. Pangerapan; and Italo Gani, Managing Partner at Impactto. They will share their knowledge and wisdom to help participants gain insight into the Indonesian market.