Cyborlink · International Business Etiquette
Asia · Country Profile

Doing business in Indonesia

A working reference on Indonesian business etiquette, culture, and cross-cultural communication — updated for the contemporary workplace.

IndonesiaCapital: Jakarta / Nusantara
Language: Bahasa Indonesia
Currency: Rupiah (Rp)
§ 01 — Orientation

Introduction

With a population of approximately 278 million people across more than 17,000 islands, Indonesia is the world’s largest archipelago, located between the continents of Asia and Australia, and between the Pacific and Indian Oceans. It is the fourth most populous nation on earth, the largest economy in Southeast Asia, and a member of the G20. Jakarta is the current capital; the government is building a new capital, Nusantara, on the island of Borneo (Kalimantan). Although the population has significant Malay heritage, it is remarkably diverse with over 300 distinct ethnic groups and more than 700 languages. Bahasa Indonesia, the national language, unites everyone. English is commonly spoken in business circles, particularly in Jakarta and tourist areas.

Indonesia has become a major destination for foreign investment, driven by its massive domestic market, young workforce (median age approximately 30), rich natural resources (palm oil, nickel, tin, coal, natural gas), and strategic location on global shipping lanes. The country is the world’s largest producer of palm oil and a critical supplier of nickel — essential for electric vehicle batteries. Indonesia’s digital economy is booming, with companies like GoTo (Gojek + Tokopedia), Grab, and Bukalapak leading a vibrant technology sector.

Though the large majority of Indonesians follow the Islamic faith (approximately 87%), making it the largest Muslim-majority country in the world, the intensity of observance varies significantly across the archipelago due to the nation’s extraordinary diversity. Christianity (approximately 10%) is a distant second. To truly understand the socio-political culture in Indonesia, one needs to understand Java, where political and economic power is concentrated.

Fun Fact

When someone says yes, does he or she mean yes or no? Indonesia is a gracious culture that is polite. Wanting to be agreeable and never wanting to embarrass another, the native language Bahasa Indonesia has 12 words that “say yes but really mean no.” Unless you are fluent in Bahasa Indonesia, using English or another language will not convey the correct message. Even with a correct translation, though the literal translation for these 12 words would be yes, the culture requires a polite, agreeable response. Since saying no to someone is impolite, don’t assume a positive response means you have agreement.

§ 02 — Cultural Analysis

Hofstede Analysis

Indonesia — Six-Dimension Scores
Power Distance
78
Individualism
14
Masculinity
46
Uncertainty Avoidance
48
Long-Term Orientation
62
Indulgence
38
Source: Hofstede Insights. Scores on a 0–100 scale.

The Geert Hofstede analysis for Indonesia has very high Power Distance (78) with offsetting low Individualism (14). This establishes an authoritarian structure where rank and position are very important. With the majority of the population Islamic, religion and faith enter into decision making on a more subjective basis than in most Western cultures.

Indonesia has one of the lowest world rankings for Individualism at 14, compared to the greater Asian rank of 23 and the world rank of 43. The score indicates the Indonesian society is strongly Collectivist. This is manifest in a close long-term commitment to the member ‘group’, be that a family, extended family, or extended relationships. Loyalty in a collectivist culture is paramount, and overrides most other societal rules and regulations.

Moderate Uncertainty Avoidance (48) reflects a more flexible approach than many Asian countries. Long-Term Orientation (62) indicates a pragmatic culture that values persistence and adaptation. Low Indulgence (38) reflects a restrained society where social norms govern personal behavior.

Read the full Hofstede framework →

Religion.  Indonesia has the largest Muslim population of any country in the world, with approximately 87% practicing the Islamic faith. Christianity is a distant second at approximately 10% (Protestant 7%, Catholic 3%), followed by Hinduism (concentrated in Bali), Buddhism, and Confucianism. The national philosophy of Pancasila recognizes six official religions and emphasizes belief in one God, national unity, social justice, and democratic governance. Business practices in more conservative areas (Aceh, parts of Java) may differ significantly from those in cosmopolitan Jakarta or Hindu Bali.

§ 03 — Dress & Presence

Appearance

Dress, clothing,
body language
& gestures
  1. Dress conservatively and modestly. Men should wear suits or long-sleeved shirts with ties for business meetings. Women should wear modest professional attire with covered shoulders and knees.
  2. In more conservative Muslim areas, women should dress particularly modestly. A headscarf is not required for non-Muslim women but covering the arms and legs is expected.
  3. Batik shirts (traditional Indonesian patterned fabric) are widely worn in formal and semi-formal business settings and are considered equivalent to a suit in many contexts.
  4. Do not touch someone’s head — it is considered sacred.
  5. Do not point with your index finger — use your thumb with fingers folded underneath.
  6. Do not show the soles of your feet or shoes to others.
  7. The left hand is considered unclean. Use the right hand for greetings, eating, and passing objects.
  8. Avoid standing with hands on hips — it signals anger or aggression.
§ 04 — Conduct

Behavior

Dining, gifts,
meetings &
general conduct
  1. Relationships are everything. Indonesians will invest significant time getting to know you before discussing business. Patience is essential.
  2. Punctuality expectations are flexible. “Jam karet” (“rubber time”) is a widely acknowledged concept. However, as a foreign visitor, you should always arrive on time.
  3. The concept of “face” is central. Never embarrass anyone publicly, raise your voice, or display anger. Indonesians will go to extraordinary lengths to maintain harmony and avoid confrontation.
  4. Decision-making can be slow and involves building consensus through multiple layers of authority. Do not expect quick decisions.
  5. Gifts are common and appreciated. Good choices include quality items from your home country, sweets, or crafts. For Muslim counterparts, do not give alcohol, pork products, or leather goods. Wrap gifts attractively but avoid white wrapping paper.
  6. When dining, wait for the host to invite you to eat. In many settings, food is eaten with the right hand. Utensils are used in more formal restaurants.
  7. Alcohol is not consumed by observant Muslims. Be sensitive to your counterpart’s religious practice when ordering or offering drinks.
  8. Tipping is appreciated but not mandatory. 5–10% is appropriate in restaurants.
  9. Remove shoes before entering a mosque, many traditional homes, and some offices. Follow your host’s lead.
§ 05 — Communication

Communication

Greetings,
introductions &
conversation
  1. Bahasa Indonesia is the national language. English is widely spoken in business circles in Jakarta and major cities but less so outside urban areas. An interpreter may be advisable.
  2. Greetings vary by ethnic and religious background. A handshake is generally acceptable. Muslim men may offer a two-handed touch to the chest after shaking hands. Do not offer a handshake to a Muslim woman unless she extends her hand first.
  3. Use titles and honorifics. “Bapak” (Mr./Sir) and “Ibu” (Mrs./Madam) followed by the first name are standard forms of address.
  4. Communication is highly indirect. Indonesians avoid saying “no” and will use soft phrases, change the subject, or remain silent rather than disagree openly. Pay close attention to non-verbal cues.
  5. Speak softly and calmly. Loud voices and animated gestures are considered rude.
  6. Good conversational topics include Indonesian culture, food, family, and travel. Avoid discussing politics, religion in comparative terms, the Chinese-Indonesian relationship, and East Timor.
  7. Business cards should be exchanged with the right hand or both hands. Have one side printed in Bahasa Indonesia.
§ 06 — Further Reading

Resources

Government & Data

News & Culture

Cultural Framework