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Making Investments in Indonesia Work for You

Making Investments in Indonesia Work for You

Benjamin Franklin is supposed to have once said, “An investment in knowledge always pays the best interest.” We agree and that’s why we like to share what we’re learning.

Here’s an example. We were having one of our regular think-tank sessions the other day and one of the team asked,

“Is investment a science or an art?”

An interesting question. Turns out, it should actually be a bit of both.

Science because you need data, research, strategy, and models. And art because of the conceptual aspects of insight, intuition, and creativity.

Finding a Balance and Joining the Dots

Savvy investors know this and find the balance between the science and the art. In many senses, they’re able to perceive things most folk would miss and then join apparently unrelated dots together. But that requires the knowledge to think that way. Thanks, Ben.

On the surface, being in lockdown doesn’t sound too attractive. Most would agree it’s not. But lockdown doesn’t mean the world has stopped spinning. Things may have slowed down and changed but business is still happening and investments are still being made (and lost). Some would even argue this current situation is an opportunity.

Positive Mindsets Matter

At Seven Stones Indonesia, we believe in being creative. We believe in the power of a positive mindset. We believe in helping our clients, partners and communities create a better world and to focus on what matters most to them. We deliver peace of mind and help businesses grow, which is why we encourage our partners to use these extraordinary times to determine what can be done more efficiently and to best prepare for the future.

One way we’re doing this is to look at the facts and use our insights and intuition.

It’s a fact that Bali’s primary investment opportunities have been in the tourism industry. It’s a fact that Bali is perceived as one of the best places in the world to visit; the culture is unique, the people are super friendly, the weather is fabulous, the F&B scene is taking off, infrastructure is improving, and the cost of living is cheaper than most places, including Jakarta.

It’s also a fact that recent changes to the rules and regulations surrounding Foreign Direct Investment (FDI) are having a positive impact on Indonesia’s ease of doing business index and one of these changes applies to visas, which have improved dramatically in recent months. That’s why it pays to know where you stand and what options are now open.

It’s Time to Work Smarter

Our intuition is leading us to encourage our clients to use this time to clarify their brands and consolidate their investments, to streamline and restructure and look at smarter ways to organise their businesses. There’s no time like the present.

Most people are familiar with the idea that thinking outside the box relates to being creative, but a couple of years ago, I saw a video that changed my thinking; prompting me to start working on a self-help business book based around the idea of thinking inside the box. Here’s the story….

Thinking inside the Box

A Creative Director of an Ad Agency is meeting with his team. They’re exploring ideas for a new restaurant. The team is throwing out concepts but they’re all pretty much the same old thing: Greek, BBQ, French Fusion, Indonesian Rijstaffel, and Italian home cooking. The Creative Director is nodding but nothing his team has suggested has piqued his interest. That is until someone at the back of the room shouts out, “how about a restaurant that doesn’t serve food?”

The Creative Director raises his hand and says “Interesting! So, team, how are we gonna do that? How are we gonna create a restaurant that doesn’t serve food?”

Then the ideas began to flow.

“People bring their own food and it’s like a buffet.”

“We only serve wine and beer.”

“Use it as a film set, like they do in Hollywood.”

“Order from nearby places.”

“We don’t serve food. We serve experiences.”

The Creative Director liked what he was hearing. “The ‘box’”, he said, “is your environment, your situation. It is what it is and it forces you to be creative within it.”

And that’s the point. We’re living in a time that’s very different to what we’re used to. It doesn’t mean we just stop. We just have to find ways to use the situation to our advantage.

Energising Hospitality in Bali

If you own a villa resort or hotel in Bali, you’re probably suffering from a lack of guests and quite possibly seeing your investment going straight down the toilet. We’ve seen many operations close permanently and nearly all of them downsize staff. The impact this has had on businesses and the local community has been extreme.

Another side of this box is people’s ability to travel. Rapid tests, quarantine, and expensive flights are clearly having a negative impact on the numbers. And even if you can travel, you can’t just arrive and get your 30-day Visa on Arrival anymore.

Here’s where we see a silver lining. We’re seeing a way to legally combine issuing visas, with long-term villa or hotel stays, which we think would not only energise Bali’s tourism industry but also offer a viable alternative to people suffering through Draconian lockdown headaches across the world.

Sponsoring Visas Makes Business Sense

We start by asking our clients if their villa resort or hotel is owned by a PT PMA (a foreign-owned company) or a PT PMDN (a locally-owned company). You’d be surprised at how many are not.

For those that aren’t we suggest they create one. Why? Because if your villa resort or hotel is owned by a PT PMA or PT PMDN, you’re now able to be the legal sponsor for a visa. And if you’re the sponsor for a visa you can offer that service to your guests.

We’re noticing those foreign visitors who have decided to come to Bali during COVID-19 are not here for short-term stays anymore. This makes sense. It’s simply not worth it to travel halfway across the world to possibly spend 14-days in quarantine once you arrive. Long-term stays of six months or more make much more sense. You’d be able to offer fantastic rates for these long stays of course, and you can also package these incredible rates with the costs associated with issuing a visa from your guests’ home country.

Win-Win-Wins All Round!

We see that as finding the balance between the science and art of investing and we believe it’s a win-win-win.

Your villa resort or hotel now has guests. And that means you can re-hire staff. And that means there’s money to put food on the table. And your guests also have the opportunity to enjoy a possible extended period of time in one of the world’s most loved tourist destinations. And that has benefits for you, your business and your community.

If your business needs some help and positive advice on how to use lockdowns in ways that combine the science and art of investment, let us know how we can help.

Send us an email at:[email protected]

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