Doing business in Indonesia: what speaking Indonesian taught me

Why learning Bahasa Indonesia matters in business

I speak English and Indonesian, and the second language has shaped my working life as much as any qualification. From 2011 to 2014 I owned Troppo Zone Puri Rama Resort in Kuta, Bali, an 88-room resort built around guest comfort and Balinese culture.

Since 2017, Australasia Marketing has worked in high-end property development and holiday rentals across Asia, and Indonesia is one of the primary markets for Kinnara. Indonesia is our close neighbour, with more than 270 million people, yet many Australians know it only as a holiday destination. For business owners willing to learn how it works, it deserves far more attention.

Bahasa Indonesia is the national language, used in government, business, schools and media across thousands of islands and hundreds of regional languages. For English speakers it's one of the more approachable Asian languages. It uses the Latin alphabet, it has no tones, and verbs don't change form for tense.

Here is what speaking it gives you in business:

• You understand what's happening in the room. Side conversations, hesitations and real concerns often surface in Indonesian, even when a meeting runs in English.
• You show respect. Making the effort signals that you're committed to the country for the long term. Even basic greetings and polite forms change the tone of a first meeting.
• You can read the documents. Indonesian law requires agreements involving Indonesian parties to be in Indonesian, so bilingual contracts are standard. Knowing the language helps you spot where two versions differ, although you still need a qualified translator and lawyer.
• You hire and manage better. Staff tend to tell you more, and more openly, when they can speak their own language with you.

In Bali, many people also speak Balinese at home and in their villages. You don't need to learn it, but a few words are always appreciated.

Relationships come before transactions

In Australia, business can move from introduction to contract quickly. In Indonesia, trust usually comes first, and trust takes time. People want to know who you are, who you know and whether you'll still be around next year.

My approach:

• Meet in person, and keep meeting. Video calls help once a relationship exists, but they rarely start one.
• Share meals and time outside the meeting room. Much of the real conversation happens there.
• Get introduced. A warm introduction from someone respected carries far more weight than a cold approach.
• Keep your word on small things. Turning up when you said you would and following through builds the reputation that larger deals depend on.

Two ideas help explain how decisions get made. Gotong royong is the tradition of mutual cooperation. Musyawarah is decision-making through discussion until the group reaches consensus, known as mufakat. Decisions can take longer because more people need to agree, but once they're made, the support behind them tends to be real.

Owning a resort in Bali showed me how closely a business is tied to its community. Village organisations known as banjar play a large part in Balinese life, and ceremonies and temple obligations shape staff calendars through the year. A hospitality business that plans around those rhythms, rather than against them, is a better place to work and a better place to stay.

Patience with permits, paperwork and timing

Indonesia has made real progress in simplifying business registration, including the Online Single Submission (OSS) system for business licensing. Even so, expect things to take longer than planned. Permits, licences, notarised documents and bank accounts each have their own steps, and requirements can differ by sector and region.

Practical points for setting up:

• Check the investment rules for your sector. Indonesia's investment list sets out which sectors are open to full foreign ownership and which are limited or reserved.
• Choose the right structure. Foreign-owned companies generally operate as a PT PMA, which comes with minimum investment and capital requirements, business classification codes known as KBLI, and ongoing reporting.
• Build buffers into every timeline. I'd add generous time to any plan that depends on licences or approvals.
• Plan for flexible schedules. Indonesians sometimes joke about jam karet, or "rubber time". Be punctual yourself and allow for flexibility in others.

Patience applies to money as well. Payments, approvals and bank processes can take longer than an Australian business expects, so plan your working capital with room to spare. Pushing a partner or an official to meet your deadline rarely speeds things up, and it can cost goodwill you'll need later.

A technology business has its own considerations. Indonesia is a mobile-first market, and customers expect products that work well on a phone. Indonesia also now has a Personal Data Protection Law, so any business collecting personal information from customers or visitors needs to understand its obligations under it.

Respect and business etiquette in Indonesia

Good manners open more doors in Indonesia than a strong pitch. These habits go a long way:

• Use titles. Bapak, or Pak, for men and Ibu, or Bu, for women, followed by the person's name, is polite and widely used.
• Respect hierarchy. Greet and address the most senior person first, and show courtesy to elders.
• Use your right hand to give and receive things, including business cards, documents and money.
• Keep criticism private. Public criticism causes embarrassment, known as malu, for everyone involved. Raise problems one on one and calmly.
• Listen carefully to "yes". A direct "no" can feel impolite, so "yes" may mean "I hear you" rather than agreement. An answer like "belum", meaning "not yet", can carry a softer no. Open questions help you understand where things really stand.
• Respect faith. Indonesia has the world's largest Muslim population, and Bali is predominantly Hindu. Plan around Ramadan and Idul Fitri, Nyepi in Bali and local ceremonies, and dress modestly for meetings.
• Allow time for small talk. Meetings often open with conversation about family, travel or food before business begins. Rushing that part can come across as cold.

None of this is complicated. It comes down to patience and paying attention, which is also most of what doing business anywhere requires.

Choosing local partners in Indonesia

The right local partner can decide whether a business grows or stalls. Take the choice as seriously as any investment decision.

In my experience, the best partnerships combine what each side does well. An Australian partner may bring capital, systems or access to overseas markets. An Indonesian partner brings local knowledge, relationships and an understanding of how things actually get done.

• Look for shared goals as well as connections. A well-connected partner who wants something different from the business will cause problems later.
• Do your due diligence. Check company records, licences, reputation and any disputes, as you would for a property purchase.
• Put everything in writing, in both languages, reviewed by your own lawyer and prepared or certified by a notary where required.
• Avoid nominee arrangements, where a local person holds shares or land on your behalf. They may be unenforceable and can leave you exposed. I've covered the property side of this in buying property in Bali and Phuket.
• Share the upside. Partners and staff who benefit from success tend to stay committed. I believe strong companies share their profits with the communities they work in.
• Develop local talent. Promote Indonesian staff into management. They know the market better than any expatriate can.

Practical steps for Australian businesses entering Indonesia

If you're considering Indonesia, here is where I'd start:

1. Begin learning Indonesian now. An hour a week makes a noticeable difference within months.
2. Visit often before committing capital. Spend time beyond Bali and Jakarta if your market is wider than those places.
3. Use government resources. Austrade and IA-CEPA, the economic partnership agreement between Indonesia and Australia, are sensible starting points for understanding trade and investment settings.
4. Get local professional advice on structure, tax, visas and employment. Working on the wrong visa can have serious consequences.
5. Start small and test. A pilot or a single project will teach you more than a year of planning from Australia.
6. Think long term. The relationships you build in the first years become the foundation for everything after.

Indonesia rewards people who show up, listen and stay. My own experience there has convinced me that language and relationships matter more than any business plan. You can read more about my work in the region on the ventures page.

About the author

Adrian Campbell is an Australian entrepreneur based in Indonesia and the founder and CEO of Kinnara, a global property marketplace. He speaks English and Indonesian, owned a resort in Bali and works in property development and holiday rentals across Asia. Read his biography.