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Doing Business in Indonesia vs Singapore: A Comprehensive Comparison
- Published: 2 April 2025
- 16 min read
- Foreigner's Guide, Incorporation
Heather Cameron
Author
From expert guidance and helpful accounting tips to insights on the latest trends in fintech, Heather is here to empower entrepreneurs and small business owners in Singapore with great content. With a background in digital marketing spanning eight years, she has experience writing for various industries and audiences. As Osome’s copywriter, she’s here to inform and inspire our readers with great storytelling.
Comparing Indonesia vs Singapore? This article explores their economic landscapes, business climates, and cultural differences. Learn how each country stands out and what to expect.
Key Takeaways
- Singapore boasts a higher GDP per capita and a stable economic environment compared to Indonesia, which has a larger total GDP but faces bureaucratic challenges.
- The ease of doing business is significantly higher in Singapore, which ranks 2nd globally, while Indonesia ranks 73rd, indicating complex regulatory frameworks and bureaucratic hurdles.
- Cultural differences between the two countries impact business practices, with Singapore emphasising efficiency and professionalism, while Indonesia values relationship-building and communal ties.
Economic Landscape: Singapore vs Indonesia
Singapore and Indonesia’s economic landscapes provide a fascinating study in contrasts. In the year 2023, Singapore’s GDP was approximately $501.4 billion, whereas Indonesia’s GDP is around $1.37 trillion, highlighting a significant disparity in economic scale. Although Indonesia has a larger GDP, Singapore’s higher GDP per capita indicates a more developed economic structure.
Singapore’s economic strength is further evidenced by its stable political environment and low corruption levels, making it an appealing business destination. In contrast, Indonesia faces more bureaucratic challenges, which can complicate day-to-day business operations.
These economic disparities provide a backdrop for understanding the factors that influence business operations in each country. In the 2024 Year, official statistics reveal that Indonesia’s total GDP maintains a strong position in direct comparison with other regional economies, including India. These details emphasise how the sheer scale of Indonesia’s market can present both opportunities and challenges, while also requiring closer attention to operational details. Meanwhile, Singapore’s per capita indicators remain robust, reinforcing its position as an efficient hub. The year 2026 is expected to bring further shifts in GDP growth. It's crucial to read the latest reports for a comprehensive understanding of regional developments.
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GDP comparison
The GDP comparison between Singapore and Indonesia reveals stark disparities. According to the World Bank data in the year 2023, Singapore’s GPD per capita income is around $84,734, significantly higher than Indonesia’s $4,920. This significant gap in per capita income highlights the economic disparities between the two nations. GDP per capita in Singapore is also aided by the smaller population.
According to the World Bank, Indonesia's per capita income is projected to grow at around 5% in 2025, while Singapore’s GDP growth rate is approximately 7.6%. These growth rates highlight Indonesia’s strong expansion as an emerging market and Singapore’s sustained progress as a developed economy.
One of the key reasons for Indonesia’s projected rise in GDP is the country’s focus on building stronger trade partnerships. As each year progresses, investors look for details on how policy reforms will shape the next day of economic activity. This ongoing comparison between Indonesia and developed markets like India continues to reveal new insights.
Inflation rates
Inflation rates serve as critical indicators of economic health, influencing purchasing power and total economic stability. By early 2025, Singapore’s inflation rate was around 0.8% according to the World Bank data, in contrast to Indonesia’s 3.8%. These differing rates impact purchasing power, with Indonesia facing more inflationary pressure.
Taking into account the World Bank's stats, Singapore’s inflation rate was approximately 3.4% in the year 2023, while Indonesia’s was around 6.5%. These figures highlight Singapore’s economic stability in contrast to Indonesia’s inflationary challenges.
Key industries
The key industries in Singapore and Indonesia highlight their unique strengths and economic foundations. As per the World Bank, Singapore’s economy is driven by sectors like finance, biotechnology, and electronics, positioning it as a global economic hub.
Indonesia’s economy, on the other hand, relies heavily on agriculture, mining, and manufacturing, showcasing its rich natural resources and labour-intensive sectors, contrasting with Singapore’s service-oriented economy.
Business Environment
The business environments in Singapore and Indonesia present contrasting experiences for entrepreneurs and investors.
Singapore is an investment hub, benefiting from:
- A stable economy
- Favourable business conditions
- A transparent regulatory framework
- Efficient processes that attract foreign investments, especially in technology and finance sectors.
Indonesia, meanwhile, provides emerging investment opportunities, particularly in technology and infrastructure development. Although Indonesia’s regulatory landscape is more complex, its growing middle class and dynamic market with significant prospects for businesses.
Regulatory frameworks
In Singapore, business setup regulations are straightforward, requiring fewer permits and licenses than Indonesia, which involves multiple layers of regulatory approvals. Singapore’s streamlined regulatory structure emphasises international standards compliance and provides strong intellectual property protections.
Conversely, Indonesia’s regulatory landscape is often complex, requiring multiple licenses and approvals, potentially causing delays for entrepreneurs.
Ease of doing business
Singapore consistently ranks high on the World Bank’s Ease of Doing Business Index due to its efficient processes and minimal bureaucratic hurdles. Holding the second position in the world, Singapore significantly outperforms Indonesia, which ranks 73rd. This high ranking reflects Singapore’s supportive policies and streamlined processes for business setup and operations.
As per the World Bank, starting a business in Singapore is rated 4th in the world, compared to Indonesia’s 140th position, underscoring stark differences in the startup process. These world rankings highlight the challenges businesses face in Indonesia compared to the more efficient environment in Singapore.
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Business culture
Singapore’s business landscape is marked by efficiency, taking over 60% of Southeast Asia’s data centres, solidifying its role as a world tech hub. Its advanced technological infrastructure fosters a dynamic and innovative business environment, which has an impact on the GDP.
In contrast, Indonesia’s business landscape is deeply influenced by its diverse heritage, celebrated through various religious and cultural festivals. Major festivals like Idul Fitri and Nyepi emphasise the importance of community and respect in business interactions. This cultural emphasis on relationships and respect can influence business practices and decision-making processes.
Infrastructure and Connectivity
Infrastructure and connectivity are vital for businesses, influencing logistics, communication, and overall efficiency. Singapore has an extensive and efficient transportation network, including an integrated public transport system. In contrast, Indonesia’s transportation system varies significantly, with urban areas like Jakarta facing severe congestion.
Singapore enjoys one of the world's highest internet penetration rates with reliable connections, whereas Indonesia faces uneven internet access, particularly in rural areas. Electricity supply reliability differs as well; Singapore enjoys nearly universal coverage, while Indonesia faces distribution challenges, especially in remote regions.
For those seeking more details, it’s worth noting that a new government initiative, outlined on Page 2 of the latest infrastructure blueprint, plans to boost connectivity between major urban places in Indonesia, including the important hub of Bandung. The reasons behind this rise in strategic development are clear: improving trade routes can save both time and money for businesses.
Transportation networks
Jakarta’s severe traffic congestion, often ranked among the worst in the world, leads to significant daily delays for commuters taking both private and public transport. This congestion, a significant issue due to rapid urbanisation, affects the efficiency of public transportation systems.
Conversely, Singapore’s transportation network is highly efficient, with an integrated public transport system including buses, trains, and taxis. This efficient infrastructure supports Singapore’s business environment by ensuring reliable and timely transportation services.
Internet access
Singapore boasts the world's fastest fixed broadband speeds and a mobile penetration rate exceeding 170%. The total penetration rate exceeds 90%, ensuring high-speed access nationwide, particularly in urban areas.
In Indonesia, internet penetration is around 70%, but service quality and speed vary widely, particularly in rural regions. This disparity in internet access underscores the challenges faced by businesses in Indonesia compared to Singapore’s advanced infrastructure.
Electricity supply
Singapore’s electricity supply is highly reliable, with an average interruption time of less than one minute per customer per year. This reliability stems from advanced infrastructure and effective management, ensuring a consistent power supply for businesses and residents.
In contrast, Indonesia faces challenges in electricity supply reliability, with frequent outages in many regions and a need for infrastructure upgrades.
Cost of Living
The cost of living in Singapore and Indonesia varies significantly, affecting affordability and lifestyle. Total expenses in Indonesia are about 64% lower than in Singapore. Singapore is costlier consistently among the highest in Asia, driven by housing, transportation, and food expenses.
Accommodation in Singapore is generally more expensive than in Indonesia, with budget hotels in Singapore often costing double or triple the price of similar options in Indonesian urban places like Yogyakarta.
Housing costs
Renting a one-bedroom apartment in central Singapore costs around S$3,605, compared to S$581 in Indonesia's Jakarta. This disparity reflects the higher demand and limited supply of housing in Singapore’s urban areas.
In Singapore, rental prices vary considerably by location, with private apartments in prime areas costing between S$3,718 and S$11,155 monthly. This place has more affordable housing options in this category, making it a budget-friendly choice for residents and businesses.
Food and groceries
Food prices in Singapore are generally higher than in Indonesia, reflecting its reliance on imported goods. This reliance increases costs, making groceries and dining out more expensive in Singapore.
Travel expenses for dining out and day attractions are generally lower in Indonesia, making it a more budget-friendly option for tourists. These differences in food and grocery costs affect the overall lifestyle.
Other essential expenses
Beyond housing and food, residents in Singapore must consider essential expenses like healthcare, education, and utilities. Monthly utility costs for an average apartment in Singapore are around $123.10, considered reasonable but higher than in Indonesia.
Healthcare costs are notably higher in Singapore, where private healthcare is expensive, compared to Indonesia’s more accessible and affordable public healthcare. These higher utility and healthcare costs impact the overall affordability of staying in Singapore.
Category | 🇸🇬 Singapore | 🇮🇩 Indonesia |
|---|---|---|
| 💰 Overall Cost of Living | Among the highest in Asia, driven by housing, transportation, and food costs | About 64% lower than Singapore, offering a more affordable lifestyle |
| 🏡 Housing (City Centre, 1-bedroom apartment) | ~S$3,605 per month | ~S$581 per month |
| 🍽️ Food & Groceries | Higher costs due to reliance on imported goods | More affordable, with lower prices for dining out and groceries |
| 🏥 Healthcare | Higher costs, especially for private healthcare | More affordable public healthcare options |
Cultural Differences and Similarities
Cultural differences and similarities between Singapore and Indonesia significantly shape business practices and social interactions. Singapore’s multicultural society blends other world's influences like Chinese, Malay, Indian, and Western, shaping its cultural landscape. Singapore’s business environment emphasises punctuality and professionalism, reflecting its efficient and direct communication style.
Indonesia’s cultural landscape is rich and diverse, with numerous ethnic groups, each with distinct traditions and customs. Indonesia’s business environment often values relationship-building and a relaxed approach to time, emphasising personal relationships and trust in business dealings.
Tourists often visit various destinations year-round, yet the travel sector also influences a nation’s GDP in a broader sense. In a single year, revenue data from tourism can form a significant economic input to the GDP. While many travellers focus on leisure, the volume of business travel has also boosted GDP figures and supported multiple service sectors.
Language and communication
In Singapore, the major languages spoken include:
- English
- Malay
- Mandarin
- Tamil
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Natural Beauty and Tourism
Singapore and Indonesia are renowned for their stunning landscapes and diverse tourist attractions. Singapore features a mix of high-rise architecture and lush greenery, including attractions like Gardens by the Bay and the Singapore Botanic Gardens. The blend of urban landscape and green spaces provides a distinct experience for visitors.
In contrast, Indonesia boasts diverse natural wonders, including beaches, mountains, and volcanoes. Popular destinations such as Bali and Yogyakarta attract tourists with their natural beauty and cultural heritage. The country’s rich biodiversity and serene landscapes deliver a wide range of experiences for nature lovers and adventure seekers.
Popular destinations
Singapore has its share of must-visit attractions, including Gardens by the Bay, the Singapore Botanic Gardens, and the iconic Marina Bay Sands. These destinations attract many people and showcase Singapore's commitment to integrating nature within its urban setting, providing a refreshing escape from the bustling life.
Indonesia provides a variety of popular destinations, each with its own distinct charm. Bali is renowned for its beautiful beaches and vibrant lifestyle, while Yogyakarta is famous for its historical sites and traditional arts. Bandung, with its cool climate and proximity to volcanoes, is a popular getaway from major towns.
Unique experiences
Indonesia’s Raja Ampat islands are celebrated for their incredible biodiversity, providing some of the best diving and snorkelling experiences in the world. Visitors to Bintan can explore pristine mangrove forests and enjoy boat rides along the clear river, providing an immersive experience.
In contrast, Singapore provides distinct urban experiences such as the Night Safari and immersive food tours. These attractions highlight Singapore's blend of modernity and tradition, offering visitors a diverse range of activities and experiences. The country’s commitment to sustainability and green spaces is evident in its many urban parks and gardens.
Travel costs
Travel expenses in Singapore tend to be higher than in Indonesia, particularly in accommodation and dining, reflecting its status as a global city. Travelling from Singapore to Bintan is convenient, with ferry rides taking only about an hour, offering an affordable getaway for those looking to explore Indonesia’s natural beauty.
In Indonesia, the overall cost of travel is generally lower, making it a more budget-friendly destination for tourists. The affordability of travel in Indonesia, combined with its diverse attractions, makes it an attractive option for day travellers seeking different experiences without breaking the bank.
Population and Demographics
The comparison of the population and demographics of Singapore and Indonesia is crucial for businesses and investors. Statistics indicate that Indonesia’s total population in the year 2025 stands at approximately 281.2 million, while Singapore’s is about 5.9 million. This significant difference in population size and density has implications for market opportunities and resource allocation.
Singapore’s population density is notably higher than Indonesia’s and is expected to grow even higher, reflecting its smaller land area and greater urbanisation. These demographic factors influence various aspects of business operations, from workforce availability to consumer behaviour.
Population size and density
According to the World Bank, Singapore’s expected population is approximately 5.7 million in 2025, while Indonesia’s population exceeds 280 million. The population density in Singapore is significantly higher, with around 7,804 people living per square kilometre, compared to Indonesia’s density of roughly 155 people per square kilometre. This comparison reflects the urban nature of Singapore compared to Indonesia’s vast and diverse land area.
Singapore’s high population density is a result of its limited land area and extensive urban development, leading to a more concentrated and efficient use of space. In contrast, Indonesia’s lower population density is spread across its many islands with land area, resulting in varied regional development and infrastructure challenges.
Demographic trends
Singapore has a rapidly ageing population, with about 20% projected to be aged 65 and above by the year 2030. This demographic trend poses a fair share of challenges for healthcare and social amenities, requiring strategic planning to address the needs of an ageing population.
In comparison, Indonesia has a younger population, with a significant portion of its population in the working-age group. This demographic trend offers opportunities for economic growth and development, driven by a youthful and dynamic workforce.
People living in major cities
Jakarta, Indonesia’s capital, houses a total of over 10 million residents, making it one of the largest urban areas in Southeast Asia. The metropolitan region of Jakarta has a population of over 35 million, ranking it among the largest urban areas not only in Indonesia but also in the world. This expected rise in urban population in this place presents both opportunities and challenges for businesses operating in the city.
In contrast, Singapore’s total population is concentrated within its urban landscape, leading to a highly developed and efficient city-state. The high population density and urbanisation in Singapore provide a concentrated market for businesses, with advanced infrastructure and services supporting the population.
Currency and Financial Systems
The currency and financial systems of Singapore and Indonesia reflect their economic stability and development. The exchange rate from the Indonesian Rupiah (IDR) to the Singapore Dollar (SGD) reflects fluctuations, with the highest rate observed at 0.0001 SGD per IDR in recent months. This exchange rate highlights the economic stability differences between the two countries.
Singapore’s banking sector is highly developed, offering a wide range of financial services compared to Indonesia’s emerging banking landscape. The robust financial system in Singapore supports its position as a global financial hub, while Indonesia is working to enhance its banking system to attract more investments.
Currency exchange
As of early March 2025, one Indonesian Rupiah is worth approximately 0.00008Singapore Dollars. The low value of the Indonesian Rupiah relative to the Singapore Dollar indicates economic stability challenges in Indonesia compared to Singapore.
Overall, the exchange rate reflects ongoing economic differences and the stronger currency stability of Singapore. These differences in currency value can impact trade, investment, and business operations between the two countries.
Banking and financial services
Singapore’s banking sector is characterised by a high level of regulation and a broad range of financial services compared to Indonesia. The country’s well-established banking system offers comprehensive financial services to both individuals and businesses, supporting its role as a global financial centre.
In contrast, Indonesia’s banking sector is characterised by a mix of local and international banks, providing a range of financial services to both individuals and businesses. The emerging banking landscape in Indonesia is undergoing modernisation, attracting more investments and enhancing financial inclusion.
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Investment opportunities
Indonesia offers a diverse range of opportunities due to its large population and rapidly growing economy, making it an attractive destination for foreign investors. Emerging sectors such as ecommerce and renewable energy provide compelling investment opportunities for investors.
Singapore’s stable political environment and strategic location in Southeast Asia provide a significant advantage for businesses looking to invest in the region. The country’s well-established financial hub and regulatory improvements support a conducive environment for investment, attracting businesses and investors from all over the world.
Summary
In summary, doing business in Singapore and Indonesia offers distinct opportunities and challenges. Singapore’s stable economy, efficient regulatory framework, and advanced infrastructure make it an attractive destination for businesses and investors. The country’s high cost and structured business environment reflect its status as a world-leading financial hub.
In contrast, Indonesia’s dynamic market, rich cultural heritage, and emerging investment opportunities present significant prospects for businesses willing to navigate its complex regulatory landscape. The country’s affordability and diverse natural beauty make it an appealing destination for both businesses and tourists. Understanding these differences is crucial for making informed business decisions and leveraging the various opportunities each country offers.