Political and Economic Stability: Indonesia has consolidated its role as an upper-middle-income nation and resilient democracy. Growth is projected at 4.9–5.1%, supported by macroeconomic stability and consistent policy continuity during the recent political transition.
Diverse Business Environment: From Java’s industrial hubs to emerging regional centers, Indonesia offers varied opportunities. A major 2026 trend is the rise of MICE tourism, with cities evolving into convention and business travel destinations.
Workforce Modernization: The manufacturing sector added 218,000 jobs in early 2026. Through the National Productivity Master Plan 2025–2029, Indonesia aims for Rp126.2 million labor productivity per worker annually, driven by Industrial Transformation 4.0 technologies.
Strategic Partnerships: Positioned along key Indo-Pacific trade routes, Indonesia leverages RCEP and other agreements to enhance private-sector productivity and global competitiveness.
1. Political Landscape
Indonesia remains a major democracy but is undergoing a turbulent transition under President Prabowo, marked by greater power centralization and protests over inequality. Despite this, the government continues to strengthen strategic partnerships with countries such as the UK and China to reinforce its status as an upper-middle-income economy.
2. Work Environment Diversity
Indonesia offers diverse professional settings, from Jakarta’s commercial core to Bali’s tourism economy. A key 2026 shift is Nusantara (IKN) emerging as a major convention and exhibition hub, boosting MICE tourism in East Kalimantan.
3. Workforce and Industry
Declaring 2026 as the year of productivity-led employment, Indonesia is prioritizing workforce quality over size. Industrial hubs are upgrading rapidly through downstreaming policies, turning cities into centers for EV batteries, automotive components, and advanced machinery.
4. Status of Upper Middle-Income Goal
In July 2025, Indonesia achieved upper-middle-income status for the third consecutive year, prompting its graduation from schemes like the UK’s DCTS from January 2027 and marking its shift toward full global trading partner status.
Indonesia is in its peak demographic dividend phase (2020–2030), with Gen Z making up 28% of the population. To harness this, the government launched the National Internship Program, aiming for 100,000 participants in 2026 to close skills gaps in high-tech and AI sectors
1. Aviation & MRO Services
Indonesia possesses one of the world’s fastest-growing aviation markets, driving high demand for aircraft, replacement parts, and ground support equipment. The maintenance, repair, and overhaul (MRO) sector is a key highlight, with a forecast annual growth rate of 6.5 percent through 2028.
2.Infrastructure & Public Works
The government continues to prioritize a massive development agenda, including over 23 planned toll road and bridge projects valued at approximately USD 35 billion through 2029. These projects are primarily managed through public-private partnership (PPP) schemes to improve investment security for international stakeholders.
3. Energy & Power Generation
As industrialization and urban centers expand, there is significant opportunity in traditional power generation (coal, gas, hydro) as well as the strengthening of the national electricity transmission and distribution grids. Companies providing engineering services and technology to improve operational efficiency are in high demand.
4.Mining & Downstreaming Technology
With vast deposits of nickel, copper, and bauxite, Indonesia is focusing on increasing domestic processing capacity. This creates a market for suppliers of extraction technology, heavy machinery, and engineering
services needed to add value to mineral exports.
5. Digital Infrastructure & ICT
Indonesia is rapidly modernizing its digital landscape, creating strong demand for telecommunications equipment, data centers, cloud computing, and cybersecurity solutions. The adoption of 5G networks and the growth of the financial technology (Fintech) sector further drive the need for advanced software and compliance technology.
1. On-the-Ground Engagement
Companies are strongly encouraged to conduct regular in-person visits to the Indonesian market to build trust, manage partnerships effectively, and perform rigorous due diligence when selecting reputable local distributors or agents.
2. Navigating Legal and Regulatory Complexity
Due to Indonesia’s complex legal environment and lengthy partner termination processes, firms should consult with local legal advisors to assist with business setup and ensure compliance with upgraded risk-based licensing systems.
3. Flexible Entry Models
International firms may enter the Indonesian market through direct investment, joint ventures with compliant local partners, or established distribution and agency agreements, particularly in prioritized sectors like green energy and digital innovation.
Newly appointed Director General Laode Sulaeman is driving the 10% increase in private sector quotas and 2026 energy security plans
Targeting USD 16 billion in upstream
investment for 2026; plans to drill 100 new exploration wells and manage idle field reactivation.
Streamlining investment through the OSS RBA system to attract global capital for 75 new oil and gas working areas through 2028.
Provides upstream oil and gas exploration, development, production, and investment in domestic and international energy assets
Provides upstream oil and gas exploration, field development, production, and asset operations across Indonesia
Provides exploration and production of oil and natural gas in the Coastal Plains Pekanbaru (CPP) Block.
Provides exploration and production of oil and natural gas in Sumatra
Provides upstream oil and gas exploration and production in Aceh
Provides exploration and production of oil and gas in South Sumatra
Provides upstream oil and gas exploration and production activities
Provides upstream oil and gas exploration and production in the Belida Working Area
Indonesian engineering, procurement, construction, and fabrication company serving the oil & gas and energy industries.
Provide engineering consultancy, design, project management, and engineering services for the oil & gas sector.
Provide offshore marine, subsea, and support services for oil & gas exploration and production activities
Provide engineering, procurement, construction (EPC), fabrication, and installation services for offshore and onshore oil & gas facilities
Provides integrated brownfield maintenance, offshore hook-up and commissioning, topside major maintenance, and marine services for the oil and gas industry
Provides floating production, storage and offloading (FPSO) facilities and offshore energy production services
Provides environmental consulting, laboratory testing, monitoring, and oilfield support services
Provides industrial valve manufacturing, supply, testing, and maintenance solutions for the oil and gas, petrochemical, and power industries
Provides engineering, procurement, offshore manpower, inspection, and integrated energy support services for the oil and gas industry
Provides corrosion engineering, asset integrity management, inspection, and materials consultancy services
Provides engineering, fabrication, machining, and maintenance solutions for the oil & gas, petrochemical, and power industries.
Provides high-quality manufacturing solutions, including industrial fasteners, cable support systems (cable trays, trunking, and ladders), cathodic protection systems (sacrificial and impressed current), and hydraulic bolt tensioning equipment
MALAYSIAN GOVERNMENT OFFICES IN INDONESIA
Embassy of Malaysia in Indonesia
Jl. H.R. Rasuna Said Kav.X/6,
No. 1-3 Kuningan 12950 Republik Indonesia
Jakarta Selatan
Web: www.kln.gov.my/web/idn_jakarta
Email: mwjakarta@kln.gov.my
Tel: +62 21 5224947 (General Enquiries)
+62 813 8081 3036 (For Emergencies)
TRADE ASSOCIATIONS/ INSTITUTES BASED IN INDONESIA
Embassy of Malaysia
Malaysia External Trade Development Corporation (MATRADE)
12th Floor, Plaza Mutiara
Jl. Lingkar Kuningan
Kav. E.1.2, No. 1 & 2
Kawasan Mega Kuningan
Jakarta 12950 Indonesia
Email: jakarta@matrade.gov.my
Tel: +62 21 576 4322/4297
Web: www.matrade.gov.my
Click i-ogse@mprc.gov.my to request more information
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