E-BUSINESS IN INDONESIA AND NZ

Ease in E-business start-up © 2007 Duncan Graham

News that Indonesian public servants are resisting the introduction of electronic business transactions known as e-government should not surprise anyone familiar with systems overseas.

The benefits to the consumer are huge; the downside for the bureaucrat is just as large. Once e-government processes are installed correctly pen pushers become redundant. Also farewelled are the opportunities for pocketing extra fees.

E-government came to Indonesia with a 2001 Presidential instruction on Telematica, meaning telecommunication, media and information. This was supposed to put citizens on-line to access services, not to wait in line.

According to an ASEAN review only 23 of 265 regencies in the Republic are ‘preparing’ e-government networks. In many cases these are just websites that may or may not get regularly updated.

Now, six years later Djoko Agung Harijadi, the boss of e-government has been reported saying the public service isn’t ready for the system, citing ‘resistances’ and ‘lack of awareness.’

One of the best examples of how e-government works can be found in New Zealand. This country ranks equal first alongside Denmark and Finland as the world’s number one cleanskin in Transparency International’s corruption perception index. Indonesia comes in at 143 along with Gambia and Russia.

One reason for this purity rating has to be the widespread use of e-government that removes any chance for corrupt public servants to milk the system or treat their fellow citizens with contempt.

Indonesia ranks 123 down the World Bank’s list measuring ease of doing business. NZ comes in second place, just behind Singapore. It takes about six months to start a business in Indonesia. In NZ it takes one day.

Registration can be done from home or the office – anywhere with an Internet connection. A printer and scanner are also required. The only other physical requirements are a reasonable level of English and a credit card.

It works like this:

The potential businessperson (and it can be an Indonesian citizen) checks on the Internet the registry of NZ business names to ensure his or her choice hasn’t already been taken.

If there’s no exact or similar match the new name (let’s call it Golden Futures Limited) is reserved for 28 days for a fee of NZ $10 (Rp 70,000) paid by credit card transaction.

This takes about five minutes and confirmation of name and company number is e-mailed back to the client. No problems unless the Registrar reckons you’ve chosen a name too close to an existing brand. No Nescafi or McDanolds, thank you.

You then have a month to turn Golden Future’s engagement into a marriage. All the forms and instructions to register the company are on the Internet (www.companies.govt.nz) and in plain English.

You need to download the consent of shareholder and consent of director forms and give these to the individuals to sign. These people do not have to be NZ citizens and can use their Indonesian addresses. KTP (identity cards), KK (family cards), letters from the Rukun Tetangga (community head), police, bank, employer or anyone else aren’t required.

Once this has been done the forms can be scanned and uploaded to the NZ Companies Office.

The only catch for people living overseas is that they must provide a NZ address as the company’s registered place of doing business. Post office boxes aren’t allowed so you need to find a friend in NZ who will allow you to use his or her address for serving any hard-copy correspondence, though in fact most communication is via e-mail.

Provided you’ve filled in all the boxes correctly, paid the NZ $150 (Rp 1 million) and you’re not banned from being a company director through a prior fraud conviction, then Golden Futures Limited will be a legal entity within one working day. As Indonesia is five hours behind NZ it pays to lodge the documents during the night.

Maybe there’s a public servant squirreled away in some neon-saturated Companies Office cubicle watching your forms and signatures flash across the screen. If so she or he doesn’t communicate well; when you stuff up and fail to tick the right box a curt red message zips back telling you to try again. As Kiwis are generally polite you’re probably dealing with a machine. No wonder Indonesian bureaucrats fear the mouse-clicks of progress.

One other catch for overseas applicants; you don’t need an Internal Revenue Department (IRD) number (known elsewhere as a tax file number or in Indonesia as a Nomor Pokok Wajib Pajak) but without it you’ll be hit by the top tax rate.

Unfortunately the IRD hasn’t streamlined its processes to the Companies Office level of sophistication. The forms can be downloaded, there’s no fee, but completed applications have to be returned by mail. For anyone living in Indonesia that’s not always a fast or secure service.

You can communicate with the IRD through e-mail, but you have to register first so privacy can be preserved. But to register you must have an IRD. This is the e-version of the chicken and egg riddle. No doubt a computer will find a solution.

(First published in The Jakarta Post 15 October 07)

##