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10 May 2018
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2 minutes

Doing business in Indonesia during Ramadan

Indonesia has the largest Muslim population in the world, with approximately 225 million adherents. Starting on May 15 the country begins to celebrate Ramadan – and this carries implications for multinational firms.

Here are six tips for doing business in Indonesia during Ramadan.

1. One-time bonus to aid spending

In Indonesia, the government requires that employers pay a religious holy day bonus. This one-month salary increase helps increase the public’s spending power during Ramadan and Eid – a time when Muslims tend to spend more than usual on food anyway. Employers can also consider giving out supermarket and department store vouchers.

2. Cancel breakfast and Lunch meetings

Due to the fasting period, Muslims eat breakfast early in the morning before sunrise and only eat after sundown in the evening. Hence, corporations should be mindful of setting meetings and avoid lunch or breakfast as much as possible.

It also helps for non-Muslims to arrange the meetings at the office of their Muslim counterparts (or at least nearby). You should avoid inviting your Muslim counterparts for any coffee or tea during the meeting.

3. Changes in working hours

As Muslims begin fasting, their daily routine changes, and many will request to change their working hours accordingly. Employers are strongly advised to provide a flexible working environment to the Muslim employees as a sign of inclusiveness.

Human resource departments should engage with employees to construct the best working hours structure. For example, many companies the option of removing their lunch break, letting them leave work an hour early in return.

4. Employees may request for flexible working days

At the end of Ramadan some employees will travel to their hometown for a day of celebrations. Employers are encouraged to be flexible and let them do this wherever possible. This may require a temporary loosening of HR policies such as flexible working, or work-from-home allowances. Companies may also need to consider being more generous being when considering simultaneous annual leave requests.

This flexibility requires forward-planning. Some companies will have to tweak their annual cycle to ensure periods of extreme busyness fall outside this days; alternatively firms can reallocate work, or draft in temporary cover.

5. Greetings

During the month of fasting, you can wish a simple ‘Ramadan Kareem’ or ‘Ramadan Mubarak’. As on the celebration of Lebaran, either ‘Selamat Lebaran’ or ‘Selamat Idul Fitri’ will suffice. As a greeting to your employees and business partners, these are the words you can use on email, message or even verbally.

Avoid saying ‘happy fasting’ as it can be deemed as being sarcastic. However, you can wish them ‘happy break fasting’ or ‘selamat berbuka puasa’ during the communal meal at sundown. 

6. Dinner (break fasting) is important

Muslims take their break fasting meal very seriously – and because it takes place at sunset, the timing changes from day to day. This has implications for companies who employ night shift workers – the time of regular breaks will need to shift daily. 

Bosses can join their Muslim counterparts for dinner – some companies use Ramadan as an opportunity to organize events and company-wide gatherings. 

Talk to TMF Group

Running a business in Indonesia during Ramadan can be challenging without the help of local experts and in-depth knowledge. TMF Indonesia offers a wide range of services from company set up to on-going compliance services including payroll, accounting, tax, company secretarial and process agent services.

Talk to us for more information.

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