Indonesia implements a mixed legal system with the civil law system as the main legal system adopted from the Dutch colonial law. Indonesia also recognises the customary legal system (sistem hukum adat) and religious legal system (Islamic sharia law).
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To incorporate a company in Indonesia, you must appoint at least one director and one commissioner. The director manages daily operations and makes critical business decisions, while the commissioner provides oversight, ensuring the company complies with Indonesian laws. Both roles are mandatory for legal incorporation, and they work together to ensure the smooth functioning of the business.
The director must be qualified and, in some cases, meet residency requirements, especially for foreign-owned companies. The commissioner, though not involved in daily management, is responsible for guiding the company towards compliance and proper governance.
Opening a corporate bank account is essential when incorporating a company in Indonesia. After incorporation, you must deposit your paid-up capital into this account. Once your company is officially registered, you can start operating as a legal entity. However, there are additional steps to complete:
Within 30 days, you must submit the labor report and other required documents to the Ministry of Labor. Additionally, you must enroll your employees in Indonesia’s social security programs, which cover workplace accidents, retirement, pension, and death benefits. It’s also mandatory to secure healthcare and employee welfare insurance through the Badan Penyelenggara Jaminan Sosial (BPJS).
Essential Work Visas for Foreigners Relocating to Indonesia
Work KITAS (Limited Stay Work Permit)
The Work KITAS allows foreign employees to legally live and work in Indonesia. It is sponsored by the employing company and valid for the length of the employment contract.
Single-Entry Business Visa
Ideal for short-term business visits, this visa is valid for 60 days and can be extended, allowing up to 180 days in total. It’s perfect for attending meetings, conferences, or business events.
Multiple-Entry Business Visa
Designed for frequent business travelers, this visa allows multiple entries within a one-year period, offering flexibility to manage ongoing business operations in Indonesia.
Employment Pass Requirements
The requirements for an Employment Pass in Indonesia may vary depending on the specific job and industry. However, the common requirements include having a valid passport, an employment contract with a sponsoring company, relevant educational qualifications, and work experience. Additionally, the company must provide a sponsorship letter, and a medical check-up is often required to confirm the applicant’s health status before the work visa is granted.
The requirements for registering a company in Indonesia are simple and straightforward. They are:
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