Let me tell you a story about how my 1st business setup in Indonesia evolved. It all started in 2006 where I was suppossed to setup a software outsourcing company in Bandung.

I thought Bandung was the right place due to ITC (Institute Technology Indonesia) and recruitment possibilities. I met up with the local authorities KMBP to start processing my license to conduct business in Indonesia.

That really did not end up as expected, the main communication to me was that if I did not have an Indonesian partner doing business would be impossible - but of course they could provide a partner for me at 30-35% of the shares in the company. I refused to have that kind of dead weight and referred to the Indonesian laws that allows foreigners to create companies in Indonesia without local partners. Aparently, the people I talked to never heard about that particular law and after one month of fighting back and forth I gave up and moved to Jakarta to continue my quest for an Indonesian company setup.

In Jakarta, I got in touch with a lawyer who was suppossed to be able to setup business and I gave her some money to get her started. One problem of course was that she did not understand English, fortunately my Indonesian girlfriend (and now wife) could help me out and act as the translator. Half through the process that involved a number of government bureaus, a lot of paperwork and documentation from my side and quite a bit of money, I realized that this lawyer never tried setting up a foreign company - plenty local companies, but not a foreign one. She gave up, but kept the money already paid to her, and I was left with half the job done and 4 months of waiting time on top of the 2 months I spent in Bandung.

Then I got in touch with another person an agent that looked at my "case" and the process that afterall was done by my lawyer. The agent told me that half of the prior work could be reused and half was kind of wasted. I told him to go on with what he could use and end this nightmare.

After 2 more months and some more money I ended with a representative company where I could hire 8 employees and invoice from a Danish mother company. This worked very well for my purposes - I was in business after 8 months of red-tape and around $ 12.000, on top of that I had an invoice from services rendered by the Danish embassy for another $ 8.000, they were the ones that got me in contact with the agent and they also helped me finding Internet connections and PC equipment.

My outsourcing business was booming and soon I found myself in a situation were the 8 people did not cut my demands, so after one year I had to figure out a way to create a PMA, which would give me the right to hire more people and invoice in the company name and have a company bank account. Having a PMA here is like a Ltd in other countries, basically it means that you have to show some cash in my case $250.000.

This process went extremely easy, I never had to show any cash and the cost for upgrading the company ended at $ 5.000 and after 3 months of processing time I was the lucky owner of a PMA (miracle!).

I went to the bank to open an account with my new PMA and was rejected. It appeared that the address where my company was located could not be used for business, so I got all the stamps and permission except for the one where I could invoice and have a bank account in Indonesia. I did not have the financial resources to move to some fancy office building and instead I lived with this situation for a year - at that time the real estate business had hit hard in Europe and having a bank account for the company account was the least of my troubles.

I hope this small tail gives a taste of what patience and luck it takes to start anything in Indonesia.... I was lucky in many situations and I have heard stories much more complicated than this one.