An Investor's Guide to Cattle Farming: How to Start Establishing Your Business

Productivity | Wednesday, March 15, 2023

Establishing a successful cattle farming operation requires meticulous planning and preparation. To ensure success in the cattle business, potential business owners must carefully consider the type of investment they make. There are two types of investment for cattle farming in Indonesia: domestic and foreign. 


Domestic Investment 

In Indonesia, this is defined as an investment for the purpose of running and conducting business within the country. There are three types of domestic businesses in Indonesia, each providing its own set of benefits depending on the type of capital and nature of leadership: 


Cooperatives provide the separation of its’ members assets as capital, and are run in accordance with the values of the larger member group. 


Limited Partnerships (CV) involve a partnership business entity formed by a group, with assets entrusted to one or more people who are fully involved with running of the business. 


Limited Companies (PT) are legal entities that conduct business with authorized capital divided into shares. 


Foreign Investment 

Only one type of foreign investment is allowed in Indonesia through the legal entity Perseroan Terbatas Penanaman Model Asing (PT PMA). This type of investment is carefully watched by the government, and is subject to very specific rules and regulations down to the number of local and foreign workers employed, and the type of allowed financial sourcing.  


In addition to choosing the appropriate type of investment, potential business owners must also consider local considerations and regulations, including legal, financial, and social aspects. Business owners must ensure compliance with the different laws and regulations in Indonesia, proper financial sourcing and documentation, and the upliftment of the local hiring economy. 

  • Legal: Cattle farms have a specific set of business registration requirements and permits needed—owners must be constantly on the lookout to ensure that they are complying with the regulations for licensing and processes. 
  • Finance: Financial sourcing and capital are crucial for business registrations to be approved in Indonesia, so business owners must have their data in order and provide the proper investment schemes and documentation.  
  • Social: Employees are the backbone of a successful business, and are subject to various labor regulations and rights to ensure they are being compensated properly and have their paperwork in order. It is the responsibility of business owners to make sure they are giving the proper benefits for their workers. 

 To establish and maintain a profitable and sustainable cattle farming operation, potential business owners must carefully follow these steps and invest time and effort in the pre-operational phase of their business. By doing so, they can increase their chances of success and contribute to the growth of the cattle farming industry in Indonesia. Learn more about these steps in our Business Entity Establishment overview. 

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