Customer Due Diligence in Indonesia

Customer Due Diligence in Indonesia: Everything You Need to Know

  • InCorp Editorial Team
  • 3 July 2025
  • 3 minutes reading time

Customer due diligence, or CDD, is critical for financial establishments and companies that intend to work with clients long term in Indonesia. It is also an imperative skill that all analysts involved in Countering the Financing of Terrorism (CFT) or Anti-Money Laundering (AML) should possess.

What is customer due diligence and why is it so important then? Companies, especially financial institutions, carry out customer due diligence to gain insights on potential clients. These insights enable organisations to know how much risk a client is presenting, and if they could be a potential bad actor or fraud.

In many countries, it is a legal requirement to conduct customer due diligence when an institution is establishing business relations with a prospective customer during the induction stage.

Therefore, as financial frauds are commonplace globally, it is critical to perform customer due diligence in Indonesia as well. Carrying out an effective customer due diligence in Indonesia can go a long way to prevent potential downfalls when an individual or a company turns out to be litigious or dishonest.

Being able to detect potential red flags through a CDD can also preclude organisations from tremendous stress and losses.

Types of Due Diligence in Indonesia

The three main categories of customer due diligence in Indonesia depend on the level and depth of investigation.

InCorp Indonesia offers an integrated service that is customised based on your business needs.

  • Standard customer due diligence
  • Simplified customer due diligence
  • Enhanced customer due diligence

Steps for Conducting

Customer due diligence is about getting access to client’s information data and verifying them.

The following are steps that most organisations adhere to as a standard flow of customer due diligence:

1. Obtain important client’s information and data

  • Full name of customer
  • Residential address
  • Birthplace and date of birth
  • Contact number
  • Email address
  • Nationality
  • Gender
  • Occupation
  • Marital status
  • Signature sample

2. Screen and analyse the acquired information and data

  • Evaluate the risks associated with the data. For example, check if the client’s country of residence is of high risk
  • Decide the level of customer due diligence, i.e. standard CDD, simplified CDD, or enhanced CDD.

3. Follow the correct level of customer due diligence depending on a client’s business process

  • Enhanced customer due diligence is suitable for more complicated cases such as a politically-exposed company or individual
  • Simplified customer due diligence is sufficient for clients with low transaction values

4. Conduct ongoing monitoring of clients even if you have already established business relationships with them

  • Determine the change of client’s profile
  • Verify if they are involved in high-risk transactions or commit frauds
  • Know if they comply with legal regulations constantly
  • Ensure all collected client’s data are up-to-date

Customer Due Diligence in Indonesia with InCorp Indonesia

InCorp Indonesia’s customer due diligence service helps you evaluate and investigate business opportunities and potential risks.

With our assistance, we enable you to flag the legal risks that might turn up from a customer’s financial obligations, contracts, or criminal records. The investigation further extends into all relevant aspects of the past, present, and predictable future of your target customer.

Our customer due diligence service is comprehensive, in-depth, and thorough. All customer’s backgrounds will be checked and verified.

If there are gaps in the customer’s history we can’t fill, we will also include these discrepancies that may cause potential legal issues in our reports.

If you are interested in InCorp Indonesia’s customer due diligence service in Indonesia; or if you have some questions regarding due diligence, contact us via the form below.

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

    It all depends on your business’s purpose and nature. Our consultants will help you to clear out the matters.

    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.

    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

    Within the scope of foreign direct investment in Indonesia, foreign investors can typically do business in two ways:

    • Set up a PMA (Perusahaan Modal Asing)
    • PMA is a local subsidiary in the form of a limited liability corporation for foreign investment reasons

    • Set up a RO (Representative Office)

    According to Law No. 25/2007 on Investment, foreign investors are required to establish a PMA company in order to make direct investments and conduct commercial and business activities in Indonesia. A PMA firm in Indonesia is a legally recognized business entity that can engage in various commercial and business operations as long as it complies with the current laws and regulations. As for RO, its purposes include conducting market feasibility studies and liaison activities.

Get in touch with us.

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What you’ll get

A prompt response to your inquiry

Knowledge for doing business from local experts

Ongoing support for your business

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.