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Political and Legal Factors
One of the important factors for any country which affect trade policy is their legal rule, regulation and their government. If the government is stable then there is less chance of risk because legal rule and regulation would not be change in short time. Indonesia’s legal rules and regulations are based on Roman-Dutch law. The Indonesian company law of 1995 is the most important framework for the current legislation on corporate governance in Indonesia. Under the company law, a company is separate legal entity in which directors and commissioners represent the company. Every company must register their memorandum of Act under this Company Law.
• Labour force – occupation
Agriculture : 42.1%
Industry : 18.6%
Service : 39.3%
• Prime lending rate
Indonesia commercial Bank prime lending interest rate it is quiet decent which 6.41% and their Central bank discount rate is 10.83%
• Environmental law
Indonesia Environmental Agency states Decree Laws. For instance, Municipal Noise Reduction Plan (MNRP) has noise limit such areas in housing occupancy, hospitals, schools, and religious buildings. (Inter Noize, 2007)
• Business or Individual tax system
Tax systems has various rules and categories for example on first 25,000,000 income rate of tax is 10% then on next 25,000,000 it is 15% and on next 50,000,000 it is 30%. In the same way Income Tax on interest from Indonesia banks is fixed at final 15% for both companies and individuals
Indonesia has good relationship with other nations for enhance the economic growth co- operation, for this they have maintaining co-operation with regional level and international level as well. Due to the government policies and treasure of national resources, their GDP growth has been increasing rapidly from last few years. Indonesia spends 23.5% of their GDP to develop their nation. According to last announced budget they had revenues $92.62 billion and expenditures $98.88...
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