Doing Business in Indonesia VS Philippines – A Comparison
Entrepreneurs and investors often face a dilemma when choosing the ideal destination to establish or expand their businesses in Asia. Indonesia and the Philippines are two popular options, each offering unique advantages that make the decision challenging. While Indonesia is renowned for its competitive business landscape, high quality of life, and lower costs for setting up smaller businesses, the Philippines is praised for its English-speaking workforce, strategic location, and growing economy. This article provides a detailed comparison to help investors make an informed choice.
Key Comparison Points
Business Environment
- Indonesia: Indonesia boasts political stability and a growing economy supported by government reforms, making it a reliable destination for investors.
- Philippines: The Philippines offers a business-friendly legal framework and strong government incentives, but it faces occasional political challenges.
Taxation
- Indonesia: Indonesia has a corporate tax rate of 22%, with several tax incentives available for businesses in special economic zones.
- Philippines: The Philippines recently lowered its corporate tax rate to 25% for large corporations and 20% for small businesses, providing competitive tax benefits.
Ease of Company Incorporation
- Indonesia: Indonesia offers a straightforward incorporation process, supported by digital infrastructure and continuous regulatory improvements.
- Philippines: The Philippines has a relatively simple company registration process, but navigating bureaucratic hurdles can sometimes be time-consuming.
Cost of Living and Business Operations
- Indonesia: Indonesia is known for its affordable operational costs, including office space and living expenses, making it ideal for smaller businesses.
- Philippines: The Philippines also offers competitive costs, but urban centers like Manila can be more expensive compared to Indonesia’s major cities.
Access to Markets
- Indonesia: Indonesia’s strategic location in Southeast Asia and its membership in ASEAN provide excellent global market connectivity and trade opportunities.
- Philippines: The Philippines benefits from its proximity to major global markets and its strong trade ties with the United States and other countries.
Quick Comparison Overview
Here’s a quick overview of the key differences for easy reference:
Factor |
Indonesia |
Philippines |
Business Environment |
Politically stable with ongoing economic reforms. |
Business-friendly but faces occasional political challenges. |
Corporate Tax Rate |
22% |
25% (20% for small businesses) |
Capital Gains Tax |
Varies based on the transaction and asset type. |
6% on the sale of real property or shares of stock. |
Ease of Incorporation |
Straightforward process with digital support. |
Relatively simple but can be time-consuming. |
Business Costs |
Lower operational and living costs. |
Competitive, but urban centers can be pricier. |
Market Access |
Strong ASEAN connectivity and trade agreements. |
Proximity to global markets and trade ties with the U.S. |

Benefits of Choosing 3E Accounting
Whether you’re looking to register a company in Indonesia or start a business in Indonesia, 3E Accounting offers unparalleled expertise and support. From seamless incorporation to comprehensive business solutions, our team ensures a hassle-free experience for entrepreneurs and investors.
Explore our Indonesia company incorporation services package to understand how we can assist you. For more guidance, check out our guide on registering a company in Indonesia. Ready to take the next step? 3E Accounting is here to help. Contact us today to get started.
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Frequently Asked Questions
Indonesia offers lower operational and living costs compared to major urban centers in the Philippines, making it more attractive for startups and small businesses.
Indonesia has a corporate tax rate of 22%, while the Philippines offers 25% for large companies and 20% for small businesses.
Abigail Yu oversees executive leadership at 3E Accounting Group, leading operations, IT solutions, public relations, and digital marketing to drive business success. She holds an honors degree in Communication and New Media from the National University of Singapore and is highly skilled in crisis management, financial communication, and corporate communications.