5 Important Things to Know about Business Culture in Indonesia

Unique business culture presents unique challenges for foreigners who want to invest in Indonesia. Here are five important cultural aspects of understanding.


All foreign investors must learn about a country’s business culture before investing there. As an emerging market in Asia, Indonesia presents unique challenges to foreigners who want to invest in Indonesia. The country’s business culture is affected by specific factors that contribute to the people and bureaucracy.


Here are five important things to know about business culture in Indonesia.


1.     Subtle and Indirect Communications

Most Indonesians have subtle communication style. They tend to say something different from what they originally meant to be “polite”. Some Indonesians may be direct, but subtleness is the general communication pattern a foreign worker or expat will often encounter. Indonesians also tend to be less confrontational when communicating a problem.


Many expats find that talking in a full /frontal manner rarely works among Indonesian peers (unless it’s an emergency). Learning Indonesian language and being more approachable in communication style is often more effective.


2.     High Sense of Pride

Much like the Japanese, many Indonesians hold their dignity in high place. Most don’t appreciate getting criticized in public, let alone humiliated. Many cases of resignation or poor communication style come from this damaged sense of dignity. Expatriates, especially those from countries with more direct cultures, must learn to be more discreet in communication.


Generally, criticizing someone in private is an effective way to solve small-scale problems. Private criticism toward individuals that deserve it will spare everyone from a negative impression.


3.     Strong Personal Connections

While many people prefer to keep personal connections out of workplaces, Indonesian workplaces are not always that stiff. People like if you can form connections using small talks or friendly meals. Having a friendly demeanor can help expatriates to form good connections with colleagues and workers. They tend to cooperate better with someone who has good connections with them.


One downside of this factor is the “privacy breach”. Some Indonesians don’t hesitate to ask questions that may be deemed personal in other countries, such as age, marital status, or religion. A foreign worker or expatriate needs to be prepared for such questions.


4.     Communal Opinions are Important

Communal opinions and consensus are not just important in Indonesia. They are viewed as parts of cultures, signified by phrases like “musyawarah untuk mufakat” (literally means “discussion to reach agreement”). Expatriates must find a way to reach agreements that benefit the companies without upsetting the majority.


Sometimes, other factors can influence the consensus, like the opinions of senior officials. Government offices and companies in formal sectors still favor seniority like in Japan. However, developing companies and startups have started to ditch extreme seniority.


5.     Appearances are Important

Most Indonesians pay attention to appearances in formal settings. Even in creative industries with a more casual working atmosphere, men and women are still expected to wear proper clothes. Usually, this means a suit or at least collared shirt for men, modest dress, skirt, and pants for women, “work denim”, and no sleeveless clothes. Certain companies (especially in formal sectors) expect employees to wear batik every Thursday or Friday.


Expatriates and investors who visit Indonesia should connect with someone who can help them bridge cultural gaps. For more information about how to invest in Indonesia, contact Smart Legal Consulting at Smartlegal.id. The business consulting service provides services and consultations about starting a business or investing in Indonesia.

Reference: Establish Forein Investment Company in Indonesia

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