Coal business in Indonesia has been one of the favourite options for foreign companies when investing in the country. Indonesian coal is known to have a versatility that meets the demands of various markets in the world. Moreover, the rich natural resources also allow the country to produce large numbers of coal.
Currently, despite the world’s effort to substitute coal with clean energy, in practice, it is still difficult. Much of a developing country infrastructure still relies heavily on coal-powered power plants. Some developed countries even had to reactivate their coal power plants due to cost efficiency. Due to these reasons, the current demand for coal has been increasing.
Coal Business in Indonesia and the Beneficiaries
With the recent hike in the coal price in Indonesia, more foreign companies are lurking in the mining sector to expand their business profitability. The political tension between Australia and China have also further propelled the demand for coal from Indonesia. All the coal demands that were once reserved for Australia are shifted to Indonesia, causing a frenzy in the industry.
A lot of inactive mining areas are once again revived to meet the demands of the market. Businessmen all over the country shift their interest to the coal industry, pumping more investments and further alleviating coal business in Indonesia. It’s not a surprise that the market price has increased significantly. With the rise of the coal business, other related industries are also experiencing an increase in demand.
For instance, the trucking industry and leasing companies. Those two businesses are also enjoying the benefits of the coal demand frenzy. To increase efficiency, mining companies rent more trucks to meet their large monthly quota. On the other hand, trucking companies give orders to leasing companies to secure more trucks. The truck manufacturer also benefits from the rise of the coal business in Indonesia as more trucking companies procure vehicles from them.
Starting a Business for Foreign Investments
The high potential of the industry causes a lot of foreign companies to gain interest in Indonesia’s mining industry. However, before being able to invest in the coal business in Indonesia, foreign companies need to have a company in Indonesia. They need to invest in Foreign Direct Investment or otherwise known as PT PMA.
To establish PT PMA, foreign companies must first have a business domicile. The function of this domicile letter is to register their businesses legally. Without a proper address, foreign companies will not be able to get their business permit. Aside from business address, they must also have a working company number as part of the prerequisite to set up a company.
Therefore, the best two options for a foreign company in Indonesia is to use Virtual Office and Serviced Office. Both options provide a good solution for foreign companies as they fulfil the requirements of both business address and company telephone number. However, for foreign companies, it is much more recommended to use Serviced Office as they will also gain access to a fully furnished and serviced office suite.
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