Indonesia is a republic, with political power established around the legislative, judicial and executive branches of government.
The legislative system comprises of three chambers. The first chamber is the Dewan Perwakilan Rakyat, also known as the People’s Representative Council, comprising of representatives of the political parties who are tasked with passing the laws with the President (Ali Budiardjo). Dewan Perwakilan Daerah is the second chamber involving representatives of the country’s provinces, known as the Regional Representatives council. Lastly, is the Majelis Permusyawaratan Rakyat, the People’s Consultative Assembly that includes members of both the first and second chamber who among with others, are tasked to amend the Constitution.
The current judicial system of Indonesia has been developed under the concept of separation-of-power. Hence, there is an impartial system, where there is no specific political method when resolving disputes. Under this system, the disputants may either choose to resolve it before the court which is generally a lengthy and cumbersome process, or take the alternative dispute resolution procedure, where they have the option to choose the law in which they believe governs the dispute at hand.
The legal system in Indonesia is based on the Roman-Dutch law, however it has been significantly enhanced and revised over the years. These modifications are made to cater to the indigenous concepts and also the new codes for criminal procedures passed each year (Dyah).
Businesses in Indonesia are generally governed by Indonesian law, however not all are. For example if there was a foreign party in the business agreement, that party has the choice of using a law other than the Indonesian law for their business agreement to use as their governing law. No registrations or requirements for reporting are needed in this case.
When entering into the Indonesia market, businesses must understand the mannerisms of Indonesia for their company to be successful within the country.
Firstly, it is vital to recognize that there is a lack of personal space or privacy when doing business with Indonesians. Therefore, they tend to be overly friendly, and many questions are asked on the first meeting. This is because Indonesians place high importance on building relationships, as they believe business is personal there. Hence, the only successful approach of doing business would encompass dealing with someone face-to-face through business meetings, dinners and other social gatherings (Expat Web Site Association). Moreover, Indonesians are known to be patient and do not make decisions in a hasty manner in regards to the business environment. When decisions are made quickly, Indonesians see this as a deal which has not been thoroughly considered and thought through (Kwintessential). Thus, in the initial meetings, business is rarely discussed, as it becomes more of a meet and greet, concentrating on building that relationship before talking about the business.
Further, businesses looking into entering their businesses in Indonesia must understand that the majority of the population is Muslim (Expat Web Site Association). This means that their religion forbids