What other things should be considered when hiring local and foreign employees in Indonesia?

  • InCorp Editorial Team
  • 16 June 2025
  • 1 minutes reading time

There are a few things to consider, such as:

  • Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates
  • Increase the competence of workers by giving or encouraging job training.
  • Follow the termination procedures (Terminating an employee in Indonesia can be long, tedious, and expensive.
  • Observe working hours, holidays, and overtime regulations
  • Give mandatory employee benefits, including social security and health insurance
  • Withhold only the right amount of income tax on behalf of the employees
  • Follow the wages and other benefits outlined by the law
  • Process work permits for foreign employees

Verified by

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Frequently Asked Questions

    In Indonesia, there are three company types that you can establish based on your business nature, requirements, and preferences.

    • Local Company (PT): 100% local ownership.
    • Foreign Company (PT PMA): can be entirely owned by foreigners; however, restrictions in business sectors apply
    • Representative Office: a branch of the parent company overseas whose purpose is to conduct marketing-related activities without generating income or profits

    Yes and no. It is vital to choose a reliable distributor as they will register the product under their company and become the product license holder and the import license holder. Changing the local distributor is easier if you are satisfied with the cooperation.

    PT (Perseroan Terbatas) is the Indonesian term for a limited liability company.

    To provide you with accurate pricing information for our HR outsourcing services, we consider the complexities of your inquiries and the dynamic nature of regulations in Indonesia. As a result, the pricing for the service may vary accordingly. For detailed information, please get in touch with our consultants.

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Disclaimer

The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind. We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials. We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.