How to Keep Your Business Operations Running in Indonesia during the Coronavirus Pandemic

We can all agree that the biggest crisis that many countries around the world are currently facing is no other than the coronavirus, also known as COVID-19, including in Indonesia. Today, the cases have risen significantly, and Indonesia is no exception. Individuals and businesses have been impacted.

The great news is, the government of Indonesia has provided support for individuals and businesses. Also, there are strategies that you can implement to keep your business running as usual in Indonesia amid the coronavirus crisis.

Coronavirus Outbreak in Indonesia: The Latest Updates

Taking into account that the current coronavirus and health situations are quite dynamic, we expect to see a lot of changes in regulations affecting the business environment in Indonesia. We are monitoring the updates and will make amendments from time to time. But, the updates published here are the latest ones.

Tax Compliance

With regard to tax compliance, the most updated changes are as follows:

1. Tax Calendar

• For individual annual tax return and payment, the deadline has been extended for one month from 31 March 2020 to 30 April 2020.
• For 20 February monthly tax return, the deadline has been extended for more than one month from 20 March 2020 to end of April 2020.

2. Tax Incentives

• Manufacturing (April – September): exemption of withholding tax (WHT) art. 21 – employees and art. 22 – import of raw materials, 30% exemption of tax installment art. 25, exemption of tax audit on VAT restitution.
• Hospitality (April – unidentified): exemption of local tax.

Employers or companies that are eligible for the newest tax incentives are as follows:

• Employers with shortlisted Business Segment Classification (KLU)
• Employers having Certificate of Import For Export Purposes (KITE)
• Employers categorised as Low Risk of VAT-able Company (applicable only for VAT incentives)

Immigration

Due to coronavirus, citizens from China along with South Korea, Italy and Iran who are currently in Indonesia and whose visas are about to expire soon can get Emergency Visas (30 days and extendable).

Other foreign nationals whose countries of origin are implementing the lockdown policy due to the coronavirus situation are allowed to stay in Indonesia with Emergency Visas as well. If you require immediate assistance on Emergency Visa application, do not hesitate to contact us.

If you wish to leave Indonesia, the immigration will not refuse your request as long as you are not facing any legal issues.

Furthermore, with Visa on Arrival (VoA) and free visa waiver currently being suspended, travelers who are set to travel to Indonesia may be able to apply for Business Visas. However, health certificate may be requested. To know more about this possibility, please get in touch with us.

The Minister of Law and Human Rights of the Republic of Indonesian issued Regulation Number 11 Year 2020 concerning Temporary Restriction for Foreigners to Enter Territory of the Republic of Indonesia.

The regulation temporarily ban all foreigners from entering Indonesia as of 2 April 2020, 00.00 WIB (Indonesian Western Time), except for the holders of:

a. Permanent Stay Permit (KITAP) and Work and Stay Permit (KITAS);

b. Diplomatic Visa and Government Official Work Permit;

c. Diplomatic Stay Permit and Permanent Government Employment Stay Permit;

d. Medical, food assistance and support personnel for humanitarian purposes;

e. Air, sea or land transport crew;

f. Foreigners employed on National Strategic Projects;

For your reference, you can download the complete documents below:

• Latest announcement (complete)
• Updates on Indonesian immigration regulation
• Updates on Indonesian immigratio regulation (Indonesian version)
• Regulation by Minister of Law and Human Rights of Republic of Indonesia concerning Immigration Policy concerning COVID-19 (Indonesian version)

Export

Exporting face masks (and related goods to be used by health workers) is currently prohibited by the Indonesian government to ensure sufficient national supplies. Please consult with us to stay up to date on the latest export regulations.

More Support for Individuals and Businesses amid Coronavirus Crisis in Indonesia

In addition to the above, the government provides the following support for individuals and businesses:

Housing Credit Incentives

• 5% subsidised interest rate
• 4% subsidised interest rate (for Papua and West Papua provinces)
• IDR 8 million subsidy for upfront deposits

Income Support for Individuals

• IDR 5 – 15 million per month for medical professionals
• IDR 200,000 per person for basic food (sembako)
• IDR 20,000 per day for 45 days for families with COVID-19 patient
• 50% – 100% subsidy on electric bills for 3 months
• IDR 300 million per individual (death compensation for medical worker)
• IDR 550,000 – Rp 1 million per household per year (Hope for Family program)

Support for SME or Large Businesses

• 6 months credit payment deferral
• Up to 1 year credit and leasing deferral
• IDR 3 trillion budget for medical industries
• IDR 65 trillion budget for medical supplies
• 100% income tax relief from April to September (440 sectors)
• 100% tax relief up to September (102 sectors)
• 30% subsidy on corporate tax relief for 102 sectors
• From 25% to 22% in 2020 and 2021, to 20% in 2022

Business Process Outsourcing (BPO) to Ensure Operations in Indonesia

Business process outsourcing providers aim to support business continuity, regardless of the situation or condition.

Even if after you have outsourced your business tasks, your outsourced accountants or payroll specialists feel unwell due to the coronavirus, there are people on the outsourced team, including team leaders and managers, that are ready to act as a temporary replacement.

Unlike in-house employees who may not be able to find replacement when they get sick, you can rest assured and have peace of mind as all your outsourced services are covered with no gap in between. The most common outsourced business tasks include accounting and tax, payroll processing and human resources.

Business process outsourcing is particularly important, especially during an unfortunate outbreak like now. Even though a virus strikes, obligations such as tax withholding and annual tax return, still require to be fulfilled in order to ensure compliance for smooth business operations in Indonesia.

Even after the coronavirus is completely gone in Indonesia and in every other country, which hopefully will be soon, you can enjoy other benefits of business process outsourcing. These include stress-free over non-generating tasks and costs saving, since it is cheaper to outsource than maintaining an in-house accounting and finance team, for example.

Business Process Outsourcing with Cekindo

In addition to having a team of experienced, skillful and knowledgeable specialists, be it in the field of accounting, taxation, finance or human resources, Cekindo’s workforce is distributed across multiple offices across Indonesia and has been trained with emergency procedures in case of force majeure events.

Our dedicated team is confident about their ability and capability for remote working, which is supported by our profound investment in rehearsed planning and training, systems, laptops and infrastructure, among others.

As such, our outsourcing services remain fully operational without any disruptions for our clients and end users.

More on Business Continuity in Indonesia

Visas & Permits

Furthermore, Cekindo is also supported by a team of visa specialists and business consultants that are happy to assist you in applying for or extending your visa and/or permit and provide support and guidance for your business and your stay in Indonesia.

Company Registration & Dissolution

Canceling your expansion plans to Indonesia due to the coronavirus could hurt your business even more. In general, the company registration process takes between 1 and 1.5 months. By the time the registration process is completed, the crisis may have receded and you will be ready to jump straight into business. When everything else is cancelled, do not cancel your entrepreneurial dream and hope because of a virus.

If your business is already running in Indonesia and unfortunately you have to dissolve it as you are not able to see its future following the coronavirus pandemic, we can assist you in dissolving your company.

Cekindo is committed to making sure that every business in Indonesia can keep running as seamlessly as possible in the middle of this unfortunate situation. Outsource your payroll, accounting and taxation now by paying only for 6 months in advance, and the rest can be paid when the dust settles.

Reach out to us now to discuss your business needs or concerns by filling in the form below. We will get back to you shortly.