Indonesia flag Indonesia: Business Environment

Business Practices in Indonesia

Opening hours and bank holidays

General Information
Advice from the Australian Government
eDiplomat - Cultural Etiquette, Indonesian business culture as per E-Diplomat
Commisceo Global - Indonesia Guide, Indonesian business culture as per Commisceo Global
Services for business, Global Affairs Canada
Opening Hours and Days
Banks: from 8 am to 2 pm, Monday to Saturday.
Public Administrations: from 8 am to 4 pm, Monday to Thursday; Friday until 11 am; Saturday from 8 am to 2 pm
Shops: from 8 am to 9 pm, Monday to Saturday; some supermarkets open on Sunday.
 
 
 

Public Holidays

Christian New Year (Tahun baru Masehi) 1 January
Islamic New Year (Tahun baru 1429 Hijriyah) 10 January
Chinese New Year (Tahun baru Imlek) 1st day of the 1st month of the Chinese calendar
Day of silence (Hari raya nyepi, Tahun baru Saka) New Year in the Balinese calendar
Birth of the Prophet Mohammed (Maulid Nabi Muhammad SAW)  20 March
Good Friday Variable
Labor Day 1 May
Waisak May
Ascension of Christ May
Ascension of Mohammed June
Independence Day (Hari proklamasi kemerdekaan RI) 17 August
Idul Fitri (end of Ramadan) Variable
Idul Adha (Feast of the Sacrifice) Variable
Christmas Day (Hari Natal) 25 December
 
 

Periods When Companies Usually Close

Ramadan Maximum 3 weeks
Christmas/New Year 1 week
 

Business culture

The Fundamental Principles of Business Culture
Indonesian society is strongly group-oriented. That is why Indonesians prefer to work towards a team goal rather than towards individual targets. Worth and status are derived from the family or group to which a person belongs. The concept of “face” is fundamental: any praise or censure should be addressed to the whole group rather than individuals, in order to avoid embarrassment. Moreover, Indonesians seldom give a negative answer, so what is stated may not match what one really thinks.

Hierarchies and seniority are highly respected, with the decision-making power concentrated at the top. Managers are the ones who should make decisions, while employees are generally not proactive as taking initiative could be seen as a criticism of the manager and the structures of the organisation. The concept of “Bapakism” (where “Bapak” literally means father) is used to describe the approach to management in Indonesia, with absolute respect being shown to elders or superiors.

The Indonesian approach to business is heavily relationship-focused. Promotion and selection are often based along relationship and family lines rather than on performance criteria.

First Contact
When trying to establish the first contact, it is preferable to be introduced by a third party, who should be carefully chosen (a local associate or bank representative). It is advised to meet first the highest-ranking person of a company. Personal visits are fundamental as Indonesians may not answer emails, phone calls or messages. Initial meetings are generally not business focused, as they are used to get to know the counterpart.
Time Management
Time in Indonesia is referred to as “rubber time” due to the elastic approach Indonesians have towards it. Therefore meetings can often start or finish late. Meetings are often unstructured and do not follow a well-defined agenda.
Greetings and Titles
Greetings can be rather formal as they are meant to show respect. A handshake is the most common greeting accompanied with the word "Selamat". Many Indonesians (especially Muslims) greet each other by bowing and putting their hand on their heart. Always start with the eldest or most senior person first when being introduced to several people at a time.
As titles represent the status of a person. They are very important in Indonesia and should be used together with the name. Superiors are often called "bapak" or "ibu", which means the equivalent of father or mother.
Gift Policy
Giving small gifts can help develop and maintain business relationships. To avoid any hint of corruption, gifts should be small and should not be given during first meetings. Gifts should always be wrapped and will usually be opened in private. Muslim colleagues or clients should not be given alcohol products as a gift.
Dress Code
The dress code varies depending on cultures and companies, but it is recommended to adopt a formal style and to respect the Muslim rules of modesty. Standard Western business attire (suit and tie for men and suit or skirt and blouse for women) are recommended when attending a normal business meeting. Heat and humidity are really strong in Indonesia and have to be kept in mind when choosing clothing.
Business Cards
Cards are exchanged at the beginning of meetings. They should be taken with the left hand and, studied carefully and placed in a card wallet. Business cards should be of high quality and contain as much information as possible, including title, corporate position and educational qualifications.
Meetings Management
Meetings can often start with small talk which is not related to core business matters. This can be essential, as it helps the relationship-building process, so it should not be rushed or viewed as inconsequential.

Negotiations are very slow and at the first meeting little progress is usually made. In general, Indonesians like bargaining and giving concessions too quickly will be viewed as naivete. Verbal contracts are very important and insisting on a written contract is considered to be a breach of trust. In any case, a written legal document is highly recommended afterwards. Indonesians would hardly express disagreement, so understanding what one really means is pivotal (even saying “yes” could be a sign of understanding, not necessarily of acceptance).

As Indonesians are indirect communicators it is important to pay attention to gestures and body language and to read between the lines. People are expected to be moderate in all communication situations. It is important not to be perceived as a threat to the harmony of the group, so it is better to speak in a quiet, gentle voice, and to avoid disagreeing explicitly. Hierarchy plays an important role. Hence during a meeting it is important that the right amount of deference is paid to the senior people present. Before answering a question, it is normal to leave a pause. This pause can at times be seen as quite long by Western standards, nevertheless it should not be broken. At peer level, managers usually reach decisions through a consensus-forming process, which can prove very time-consuming.

Meals should be used as an opportunity to widen the topics of conversation and develop a personal relationship with your counterpart, rather than be focused on business-related matters. Most Indonesians are Muslims and may not drink alcohol or eat pork. Whenever eating, passing or receiving food, use the right hand as the left hand is considered to be unclean. In formal situations, men are served before women. Wait to be invited to eat before you start. Most restaurant include a 10% service charge in their bills; if this charge has not been added it is considered polite to leave an equivalent amount.

Sources for Further Information
Kwintessential.co.uk Commisceo eDiplomat - Cultural Etiquette World Business Culture

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Latest Update: May 2022

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