Advice against doing business in Indonesia over the internet

A number of Indonesian companies are currently marketing their products over the internet. In many cases it is very difficult, or even impossible, to get reliable information about these companies, including their credit-rating and previous business records. One reason is that there are no comprehensive lists of registered companies in Indonesia.

Over the last few years, the Embassy of Sweden in Jakarta has been contacted by a large number of Swedish companies and private individuals wishing to do or having done business with smaller Indonesian companies that they have come in contact with over the internet. Several Swedish companies were victims of fraud in connection to business transactions with these companies. The most common form of fraud has been connected to advertisements on the Internet mainly about electronics, boats or motorcycle products. Once in contact with an interested buyer the Indonesian party usually asked for an advance payment. Once the payment was made the Indonesian counterpart suddenly disappeared and the goods were never delivered. In other cases, the Swedish companies were unable to get refunds when shipments of products did not correspond to the agreement. In virtually all cases, the addresses and contact numbers given on the internet websites have been fake or connected to pre-paid mobile phone numbers that cannot be traced.

For this reason, the Embassy of Sweden in Jakarta advices Swedish companies and private individuals against doing any business whatsoever with smaller unknown Indonesian companies over the internet. Experiences from Indonesia show that it is often necessary to have a reliable local partner or agent in the country that can check all information, including deliveries of products, in order to avoid being exposed to fraud. Indonesia is a big, important and interesting market, but not suitable for this type of business at a distance.