Expand Business in Indonesia

Global Upside helps businesses expand into Indonesia by providing talent acquisition, human resources, accounting, payroll, tax, incorporation, and professional employer organization (PEO)/employer of record (EOR) services. Our comprehensive offerings create an end-to-end solution that helps you establish your business and optimize your operations, all while maintaining compliance with Indonesian laws and regulations.

The hiring and incorporation processes in Indonesia are often complex, time-consuming, and involve numerous legal and compliance challenges.Global Upside simplifies these processes and lifts the compliance burden from your business. Our teams have the experience and expertise required to help you establish a legal entity in Indonesia. We also offer PEO/EOR solutions to companies interested in hiring employees quickly, without setting up a legal entity in the country.

Capital City

Jakarta

Currency

Indonesian Rupiah (IDR)

Language

Indonesian

Government

Unitary Presidential Constitutional Republic

Country Overview

Indonesia is a country surrounded by the Indian and the Pacific Ocean with the largest economy in the South-Eastern zone. It is a newly industrialized, developing lower middle-income nation which has made huge growth in destitution reduction by diminishing the poverty rate to 9.4% in 2019 since 1999.

  • Indonesia ranks as the 16th largest economy in the world by nominal GDP.
  • Indonesia ranks as the 5th largest economy in Asia.
  • Indonesia ranks as the 24th business-friendly nations in the world.
  • Indonesia is one of the world’s main suppliers of coffee, cocoa, palm oil, and rubber.

Legal Entity Setup

Options for setting up a legal entity in Indonesia include:

Limited Liability Company or Perseroan Terbatas (PT)

Limited Liability Company or Perseroan Terbatas (PT) is an establishment that is similar to an LLC in the US and is run by at least one director and two local investors.

It takes a minimum of 4 to 8 weeks to incorporate a legal establishment in Indonesia.

Human Resources

There are three kinds of workers that are classified on the basis of the nature and type of their job, and the length of their employment:

  • Permanent employees
  • Fixed-term employees
  • Foreign employees

Labor law is regulated by the Law No. 13 of 2003 which comprises of the following:

  • Employer details
  • Employee details
  • Job description
  • Location of the job
  • Details such as the rights and obligations of both the employer and employee
  • Joining date and terms
  • Location of where is agreement is prepared
  • Signatures of both the employer and employee

Payroll

The frequency of salary payment varies from weekly to monthly with the exception of an employment contract that is for a period of less than one week.

Accounting

The common-setting body that regulates the accounting standards in Indonesia is the Financial Accounting Standards Board, also known as, Dewan Standar Akuntansi Keuangan (DSAK) under the Indonesian Institute of Accountants, also known as, Ikatan Akuntan Indonesia (IAI). The Indonesian law states that both public and private firms must be in compliance with the accounting standards issued by the DSAK-IAI.

Tax & Compliance

Corporate Tax

The corporate tax rate in Indonesia is 25%.

Value Added Tax (VAT)

VAT levied here is 10%.

Data Privacy

There is no general law on data protection in Indonesia, however, there are specific rules that concern the usage of electronic data. The principal sources of the administration of electronic data and exchanges are Law No. 11 of 2008 with respect to Electronic Information and Transactions, also known as the EIT Law, as revised by Law No. 19 of 2016 with respect to the Amendment of EIT Law or the EIT Law Amendment, Government Regulation No. 71 of 2019 with respect to Provisions of Electronic Systems and Transactions Reg. 71 and its exercising regulation, Minister of Communications and Informatics Regulation No. 20 of 2016 in regards to the Protection of Personal Data in an Electronic System (the “MOCI Regulation”).

Anti-Bribery & Anti-Corruption Law

The Indonesian Anti – Bribery Law and Anti-Corruption Law regulates the bribery of public officials. However, practically, litigations of bribery have been put into effect by the recent Anti-Corruption Law.

1. Bribery of Public Officials

For Individuals:

i) Imprisonment for up to 5 years.
ii) A fine that ranges from IDR 50 million to IDR 250 million.

For legal entities:

i) A fine for the firm.
ii) Penalty for the firm’s management.
iii) Imprisonment of the officers of the firm.

2. Bribery of private officials

It is not governed under the Indonesian legal system. However, under Article 378 of the Indonesian Criminal Code, any deceitful act is punishable for up to 4 years imprisonment.