Road Rules – Set Up a Private Transportation Services Business in Indonesia
Shift your business gear to success and set up a private transportation services business in Indonesia with 3E Accounting’s quick read.
Indonesia is in line to have the world’s fourth-largest economy by 2050. It is already the largest emerging market in Southeast Asia and is set to be an e-commerce powerhouse. Due to Indonesia’s huge population and massive landmass, the need for private transportation is in demand. Indonesia’s transport and logistics sector are expected to have a 10% Compound Annual Growth Rate (CAGR) by 2025. Now is the time to capitalise on this potential and set up a private transportation services business in Indonesia.
The Fast and the Profitable
Traffic congestion is legendary in Indonesia, especially in capital cities such as Jakarta and Bali. Yet, public transportation is still underdeveloped, and the population relies heavily on private modes of transport to get around. Statistics show that less than 30% of the million-strong commuters use public transportation.
To set up a private transportation services business in Indonesia will require some research. There are many modes of private transportation available, including:
- Private bus or car
- Auto rickshaw
- Ojeks (motorcycle taxis)
- Pedicabs or becaks (prohibited in city centres)
As Indonesia is an archipelago, there is an option of offering transport services via small planes and boats too. You might also want to consider the highly popular Transport Tech model of business. These types of companies provide transportation services that are on-demand and multi-vertical. For instance, it includes bike or car rentals, delivery services, logistics, etc. and are mobile app-based.
Once you have chosen your business model, register your company with the Trade Register or Company Registry. Your company can have either a legal or business entity. The following are types of legal entities, which need government approvals to operate:
- Local Limited Liability Company (Perseroan Terbatas or PT) which is locally owned.
- Limited Liability Company (Perseroan Terbatas Penanaman Modal Asing or PT PMA) which is foreign-owned and needs a Permanent Business License from the Capital Investment Coordinating Board (BKPM).
If your company is a business entity, then it will only need to be registered with the relevant government departments. These types of companies include:
- Civil Partnerships
- Limited Partnerships (Comanditer Venootshcap or CVs)
Registration is done via the Online Single Submission (OSS) system which issues a Business Identification Number (NIB). You will also need to get tax registration done as well.
Approvals and permits include having a valid driving license, the class of which will depend on the nature of business. Licenses are issued by the Indonesian National Police (POLRI). For e-hailing or rideshare models, you will have to join a co-operative to start your business.
The Road to Success
If you’re keen to set up a private transportation services business in Indonesia, then it’s time to commit. The best way to do so is to hire professionals like 3E Accounting to ensure a smooth start to your venture. 3E Accounting offers a wheelhouse of business solutions that you can pick and choose from to fit your needs.
Contact 3E Accounting today and start your business on the right track to success.