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The Expat's Guide to Doing Business in Semarang THE EXPAT’S GUIDE TO DOING BUSINESS IN SEMARANG THE EXPAT’S GUIDE TO DOING BUSINESS TABLE OF CONTENTS IN SEMARANG TOPIC PAGE Interesting Facts about Semarang (Infographic) 3 Why Invest in Semarang 4 Business Culture 5 Visas and Permits 6 Company Setup 12 Business & Import Licenses 15 Business Process Outsourcing 18 Ofce Solutions 21 Survival & Networking Guide 23 Cekindo Business International 24 CEKINDO BUSINESS INTERNATIONAL© 2020 2 THE EXPAT’S GUIDE TO DOING BUSINESS INTERESTING FACTS ABOUT IN SEMARANG SEMARANG CEKINDO BUSINESS INTERNATIONAL© 2020 3 THE EXPAT’S GUIDE TO DOING BUSINESS WHY INVEST IN SEMARANG IN SEMARANG 7 REASONS TO INVEST IN SEMARANG Semarang was awarded The Pro-Investment Area. Jakarta-Surabaya toll road in December 2018 and the 1 On November 26, 2018 Semarang received the Pro- expansion of Tanjung Mas Port (still ongoing). Investment Area Award at the 2018 Central Java Strategic location. Located between Jakarta and Investment Business Forum (CJIBF) held in Jakarta. 4 Surabaya, two of Indonesia’s largest domestic markets, the Semarang has built a conducive investment climate strategic location of Semarang enables foreign investors and signicantly increased the amount of investment to reach any destination within the island conveniently. from the private sector. In 2017, the investment Furthermore, Semarang operates both international airport gure reached IDR 20.5 trillion in Semarang, which and port and is further connected with allmajor cities in was much higher than the IDR 1 trillion in 2011. Java. The implementation of investment-friendly system. Low labour cost. The minimum wage in Semarang is, 2 Investments in Semarang have never been easier than now 5 half-price of Jakarta, at IDR 2.13 million per month. with the implementation of an investment-friendly system Enticing incentives. Government Regulation (PP) No. through e-government. A total of 148 online service appli- 6 142/2015 states that tax incentives will be granted to cation systems were created and integrated to facilitate the investors building their factories in industrial parks. These evaluation system of investments. In addition, the elimina- incentives include easier licensing processes, advanced tion of nuisance permits, environmental permits and recog- infrastructure, tax deductions and exemptions. nition of digital signatures are the efforts of the government Growing digital landscape. According to startup to accelerate the processing of permits in Semarang. 7 ranking.com, among the 1000 startups in Indonesia in Well developed infrastructure. This includes the opening 2017, 31% of them were actually in Semarang. 3 of a new airport terminal in June 2018, the opening of WhileWhile residing residing in inSemarang, Semarang, you you will stillwill havestill have the perfect the perfect access access to qualied labour, thanks to several prestigious universities that ! to qualied labour, thanks to several prestigious universities that areare situated situated within within the the proximity. proximity. CEKINDO BUSINESS INTERNATIONAL© 2020 4 THE EXPAT’S GUIDE TO DOING BUSINESS BUSINESS CULTURE IN SEMARANG To run a successful business in Indonesia, it takes more than just market knowledge, capital and human resources. Indonesian business culture is always a focal point in doing business because of the country’s diverse and rich cultures and traditions. TIME MANAGEMENT Indonesian people have a different attitude towards time, which is called the “rubber time” or “jam karet” in Indonesian language. It means that Indonesians approach matters more slowly and believe that time is exible and everything needs time to be realised. Indonesians take pride in their hospitality and “relationship rst, business second” approach. Building relationship is more important to bring harmony. Therefore, this kind of attitude applies when it comes to showing up at appointments or meeting deadlines. THE PREVALENCE OF AUTHORITY, SENIORITY AND HIERARCHY The concept of authority, seniority and hierarchy is still commonly found in, especially in a long-established company with employees of older generations. During a meeting, for example, you are advised to greet the most senior or the highest position rst. They should be addressed with their names preceded with titles such as Mr/Mrs/Miss or the name of positions such as Chairman/Director/Manager. INDIRECT RESPONSE AS POLITENESS To reiterate, Indonesians place high importance on maintaining the harmony in every social and personal situation. Therefore, sometimes they will say something indirectly or opposite to express their thoughts and opinions to maintain a harmonious relationship. As an expat, you should not regard this as good or bad business culture. Instead, understand and embrace it for your business advantage. ! When an Indonesian say “yes” to your proposal, it does not mean they have agreed with your proposal. Don’t take this the wrong way as hypocrisy. They just try to be nice and don’t want to hurt your feelings. To make sure it is a real “yes”, conrm a few more times and seal the deal with a proper agreement. CEKINDO BUSINESS INTERNATIONAL© 2020 5 THE EXPAT’S GUIDE TO DOING BUSINESS VISAS & PERMITS IN SEMARANG Visa and/or permit application in Semarang depends on your purpose of visit or stay. In this e-book, we provide you with the most common visas and permits available for foreigners. BUSINESS VISA You can opt for a business visa to participate in business activities that do not generate any income. These business activities can include meetings with suppliers, interviews with staff, seminars and conferences, etc. Business visa comes in two types: single- entry and multiple-entry, and both can be applied online. 1. Single-Entry Business Visa 2. Multiple-Entry Business Visa This visa is valid for 60 days and is not extendable. You must leave If you want to enter and leave Indonesia several times per Indonesia and apply for a new business visa to return to Semarang. year for the same purposes as a single-entry business visa, a multiple-entry business visa is the right choice. A multiple-entry business visa does not restrict the number of visits to Indonesia, but each visit is limited to only 60 days, and it is not extendable. The validity of the visa is one year. ! You should not confuse a business visa with a work visa because as mentioned earlier, a business visa does not allow foreigners to work and receive a salary. CEKINDO BUSINESS INTERNATIONAL© 2020 6 THE EXPAT’S GUIDE TO DOING BUSINESS VISAS & PERMITS IN SEMARANG SOCIAL VISA Social visa is granted to foreigners who would like to visit Semarang for short internship programs and courses, lectures, meetings, and other related social activities. This visa allows its holder to stay for a maximum of 60 days and is extendable up to four times, and the visa will gain a 30-day validity for each renewal. You need an Indonesian sponsor, such as Cekindo, for social visa. RETIREMENT VISA Retirement visa allows foreigners who are over 55 years to stay in Semarang. The validity of this type of visa is one year, and it can be extended. A local Indonesian sponsor is compulsory for the application of retirement visa. However, not any Indonesian national can be the sponsor. The retirement visa’s sponsor should be the owner of a travel agency license, like Cekindo. To be eligible for retirement visa application, you need to satisfy the following requirements: 55 years old or older In retired status Conrmation of hiring a maid in Semarang Sufcient savings of 1,500 USD per month Passport with at least 18-month validity Passport photos with a red background Pension, insurance and medical statements CEKINDO BUSINESS INTERNATIONAL© 2020 7 THE EXPAT’S GUIDE TO DOING BUSINESS VISAS & PERMITS IN SEMARANG WORK & STAY PERMITS Indonesia offers several types of visas that differ based on the purpose of stay in the territory. The frequently used ones are a Temporary Stay Permit called KITAS (ITAS) and a Work Permit known as IMTA. However, effective from June 2018, IMTA is no longer required. IMTA is simplied as it is combined with Expatriate Placement Plan (RPTKA). With regard to RPTKA, it is no longer mandatory for shareholders that are also directors or commissioners, diplomatic and consular ofcers, and foreign workers that are needed by the Indonesian government. CEKINDO BUSINESS INTERNATIONAL© 2020 8 THE EXPAT’S GUIDE TO DOING BUSINESS VISAS & PERMITS IN SEMARANG .Temporary Stay Permit (KITAS) Having a Temporary Stay Permit (KITAS), also known as Indonesian Investor KITAS can be categorised into two a Work visa or Work KITAS, is on of the necessities when types: working in Indonesia. A Work KITAS must be sponsored by .Index 313: 1-year KITAS an Indonesian company (an individual sponsorship is not .Index 314: 2-year KITAS allowed). The length of each working KITAS is based on job To qualify for an Investor KITAS, foreign investors are positions commonly ranging from six to 12 months, and required to have a minimum investment of IDR 1 billion in it goes hand in hand with a Multiple Exit Re-Entry Permit invested shares and the invested capital of the company (MERP). has to be over IDR 10 billion. Another type of KITAS that appeals to foreigners in Investor A newly established company will be able to sponsor the KITAS. Noteworthy benets of Indonesian Investor KITAS investors upon receiving the Business Identication Number include ease of application and waiver of work permit fee. (Nomor Induk Berusaha – NIB) and business license (Izin With an Investor KITAS, foreign investors will no longer be Usaha). required to pay a fee of USD 1,200 every year, provided that all the investment requirements are met. Furthermore, once the initial investment has been poured, foreign investors can immediately start working in Indonesia. CEKINDO BUSINESS INTERNATIONAL© 2020 9 THE EXPAT’S GUIDE TO DOING BUSINESS VISAS & PERMITS IN SEMARANG .Permanent Stay Permit (KITAP) KITAP is the highest goal for foreigners wanting to reside in Not everyone can apply for a KITAP.
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