Doing Business in Bali, How its culture interwoven with business practices

Bali is not only synonymous with beautiful beaches, sophisticated culture, idyllic holidays and world-class hotels but also has tremendous business and investment opportunities that have yet to be explored. Beside tourism industry, clothing, textiles, and handicrafts provide millions of US dollars worth of export income. In the agricultural sector, rice, tea, coffee, vanilla, soy beans, chilies and cacao are staple exports. Indonesia’s growing economy is attracting investors from all over the world. You can even run a business from Bali now.

The best aspects of doing business in Bali are the incredible environment and its friendly and kind people. Although the Balinese remain self-consciously “traditional,” they have been neither rigid in that tradition nor resistant to change. Many foreigners, after coming from holiday in Bali, filled with grand ideas about retiring early and moving there permanently to start a business or venture.

Like doing business in your own country, you have to have enough experience in the business you want to start. There is a huge turnover in the bars and restaurants all over Bali. Sure there are established places that seem to have been around forever, but it has taken the business owners years of hard work to get to there. Take a bit of time to learn the cultural set-up and act in a neo-colonial fashion.

The Challenges

Indonesian bureaucracy

Indonesia has different laws, customs and language. There is nothing worse than expats who continually compare the way things are done “back home”. Navigating the Indonesian bureaucracy is one of the biggest challenges of operating a business in Bali. Having connections in government and commercial circles is very important.

Bali has advanced in recent years, with better communication infrastructure systems in place and an influx of Western lawyers, as well as English-speaking real estate agents. Doing business in Indonesia can be heavy going. It’s not just language barriers. There’s the archipelago’s complex legal system, lack of infrastructure, as well as a myriad of social and religious customs to be adhered to during any business transaction. Find reputable on-the-ground people who can help you.

Balinese Culture

Balinese culture is unique, quite different from the rest of Indonesia. On Nyepi, Balinese new year, the entire island shuts down. The Hindu Balinese refrain from all worldly and physical activities for 24 hours. Government and private institutions, as well as schools, will be closed. No one goes outside, except for the local Banjar (police/local authority) who tell others to go home. If you get caught outside on Nyepi, you’d be taken to a holding area and held there until it was over.

Lights must not be turned on and no fires may be lit, including stoves for cooking or even lighting a cigarette. and many fast on this date. Only emergency services and hospitals are allowed to operate as usual. Tourists and visitors who happen to be in Bali on Nyepi day must remain inside their hotel complexes where activities can take place as normal. The Ngurah Rai Airport is also closed for 24 hours with no fights arriving or departing on Nyepi day. The reason for Nyepi? People believe that the evil spirits are scared away by the parades with monsters the day before, and the next day they return to the island and see no one there, the people are safe for another year.

Bali Community

Starting and running a business in Bali is also about interacting with the resident population, even if your customers are likely to be other expats and tourists. Other foreigners living in the same place as you are not necessarily going to become friends. It can be the opposite. There’s a lot of competition in some types of business where you need to be careful not to tread on someone else’s toes. In the early days of starting up your enterprise, you might want to seek out other business owners on the island who may be willing to help you. Learn the Indonesian way of doing business by engaging with the local community so that the business can grow more. Make time to understand the Balinese community system. There are seven things that wrap the Balinese that creates collectively strong oneness among the Balinese community: Hindu Religion, Pura or Temple, Dadia, Banjar, Caste, Subak, and Indonesia Government System.

Balinese Employees

When you hire Balinese as your employees the first thing you have to remember is that Balinese will always put their community and religion before their job. Religious ceremony is an everyday affair in Bali and as an employee they would ask for so much time off. The main reason is that if they are not active in the community, the community will not support them.

The Hindus have quite a demanding religious calendar and, being in Bali where the majority are Hindu, the office should accommodated their needs completely. Although most Balinese try to organize their time to fit in all their ceremonies and community commitments with their job, this is not always possible. Balinese don’t have a habit of keeping a diary, they often forget that they have a ceremony coming up. As a result asking for time off at the last minute is often occurred.

In the work place there is a lot of respect for religious duty and time is given for individuals to practice their religion of choice. Therefore it’s wise to have a team of employees that is not 100% Balinese. Thus, the Christians can be off at Christmas while the Muslims and Hindus work, the Muslims can be off at Ramadan while the Hindus and Christians work, and the business will run as usual when the Hindus are off for their regular religious ceremonies.

Business Etiquettes

Bali Dress Code
Wearing appropriate business attire is a sign of respect for both men and women. Out of business, clothing should comprise lightweight, casual items. In temples and government buildings, smarter clothing is essential.

Greeting Someone in Bali
Business people should be addressed by their title along with a right-handed handshake for both men and women. However, the Balinese prefer a light-handed shake to a firm one.

Business Cards
Business cards are also considered important and should be exchanged during introductions as a sign of interest. Please have these printed in English and Indonesian.

Small Talk
Balinese society is very hierarchical. They always ask each other early in any conversation “What is your name?” because the name tips off the caste of the other person, allowing the two to pick the right levels. They might do the same to foreigners. Be aware that it is not customary for Indonesians to talk “straight” (too much directness is often considered rude). Please rephrase their sentences to ensure that you understood correctly and to avoid any misunderstandings during business meetings.

Money in Bali

Most mid-range hotels, all top-end hotels and some tourist attractions, car rental agencies and tour companies list their prices in US dollar. However, since July 2015 Balinese Businesses are not allowed to cash in dollars anymore. This means, although they might still have dollar prices on their menus and price lists, they will have to receive Indonesian Rupiahs from you.

Foreign currency, whether in banknotes or traveler’s checks, should be exchanged at major banks or authorized money changers (PT. Central Kuta is highly recommended). Bring always new, clean US$ bank notes which are not damaged in any way. Otherwise hardly any moneychanger on Bali will accept it at full value – or at all.

Business Meeting

Bali follows the Hindu and Muslim calendars. Mark your calendar for the key religious dates before you plan your meeting with your Balinese business partner or with Indonesian business partners in Bali. Besides Christmas and New year, the Balinese Hindu have a large number of festivals and ceremonies throughout the year. Also factor in that the Muslim population fasts for an entire month during Ramadan. Do not arrange business meetings on these dates.

Language

There are almost 700 indigenous languages spoken in all parts of the Indonesian archipelago. Fortunately, one language, Bahasa Indonesia, is the only cultural element that unifies the entire population. It is the official Indonesian language and is used in schools, television and government.

Greetings with international hi or hello is nice, but try to speak Indonesian language will draw respect and admiration for your effort. For business people who want to do business in Indonesia, it is advisable to learn a few words of Indonesian. This will show that you have an interest in your host’s language and culture. It is a very good icebreaker and you will gain a great deal of respect by Indonesian people by communicating in their language.

Although many government officials or business people speak some English, they may prefer to hold meetings in Bahasa Indonesia. Even though foreigners are present in the meeting, by nature – not on purpose – they often switch automatically to Indonesian language. You should not feel offensive. It is advisable to bring English-speaking translators with you to keep you in the loop. Presentation material and company literature should be also translated into Bahasa Indonesia. You will gain a great deal of respect by Indonesian people by communicating in Indonesian language.

In day to day interaction, many locals speak English too, but foreigners usually end up paying higher prices when speaking English.