5 Legal Compliance Checklist Every Business Must Follow in Indonesia

Legal compliance in Indonesia means ensuring your business follows all national and local laws that apply to your operations. This includes rules for business registration, tax payments, employment, and even sector-specific regulations. 

For companies operating in Indonesia, due diligence is a key first step. It involves checking whether all licenses, documents, and processes are in place and up to date. A solid legal compliance checklist helps ensure nothing important is missed. 

Legal Compliance Checklist for Businesses in Indonesia 

To run a business legally and smoothly in Indonesia, following a structured legal compliance checklist is essential. This helps ensure all aspects of your operations meet the country’s legal standards and reduces the risk of penalties or disruptions. Non-compliance can lead to hefty fines, business closure, or even legal action, making it crucial to adhere to these guidelines. 

1. Business Registration and Licensing 

• Choose a business entity type (e.g., PT, CV, or PMA for foreign investors). 
• Register your business with the Online Single Submission (OSS) system, now aligned with GR 28/2025. 
• Secure your Business Identification Number (NIB. 
• Apply for permits such as SIUP (Trade License), TDP (Company Registration), and location-based licenses. 
• Update licenses regularly to stay compliant. 

2. Tax Compliance 

• Register with the Directorate General of Taxes (DJP) and obtain a Taxpayer Identification Number (NPWP). 
• Fulfill monthly and annual tax obligations (PPN, PPh21, PPh23, etc.). 
• Use e-Faktur (electronic invoicing) for VAT reporting.

3. Employment and Labor Law Compliance 

• Draft written employment contracts in line with Indonesian labor law. 
• Register employees under BPJS Kesehatan (health insurance) and BPJS Ketenagakerjaan (social security). 
• Follow regulations on minimum wage, working hours, leave, and termination. 
• Ensure workplace safety through K3 (Occupational Health and Safety) standards. 
• Conduct thorough background checks during hiring as part of your due diligence process. This will ensure that you are hiring the right people and enhance your business’s security and compliance. 

4. Environmental and Industry-Specific Regulations 

• If your business impacts the environment, complete an AMDAL or UKL-UPL report. 
• Follow reporting requirements from sectoral regulators (OJK for finance, BPOM for food and drugs). 
• Obtain Halal Certification (if applicable). 
• Stay updated on changes to avoid non-compliance. 

5. Intellectual Property Protection 

• Register your trademarks, copyrights, and patents with DGIP (Directorate General of Intellectual Property). 
• Protect your brand and products from infringement, a critical part of compliance that is often overlooked. 

READ MORE:

• Tax Compliance in Indonesia: A Comprehensive Guide for Businesses and Individuals 
• Audit Services in Indonesia: Compliances and Requirements 
• What Businesses Need to Know About Audit and Compliance in Indonesia 

How to Stay Legally Compliant in Indonesia 

Staying on top of legal compliance in Indonesia means being consistent and prepared. Regulations can change, so businesses need to remain alert and take smart steps to avoid penalties. Here’s how: 

• Do Regular Legal Compliance Audits: Review licenses, taxes, and employee records once or twice a year. 
• Stay Updated on Regulations: Follow official sources like OSS and DJP for legal changes. 
• Keep Digital Records: Store important documents online and use e-invoicing and deadline tracking tools. 
• Train Your Team: Ensure HR and finance understand compliance basics; always run background checks.

Start Managing Compliance Smarter with InCorp 

While you can handle legal compliance in-house, doing so requires considerable time, in-depth knowledge of local regulations, and ongoing attention to stay updated with changes. This often means diverting your focus from growing your business. 

InCorp Indonesia (an Ascentium Company) can take care of your legal and compliance tasks with our Business Process Outsourcing services, so you can focus on growing your business. Here’s what you get: 

• Save time and avoid the hassle of managing documents and deadlines 
• Access up-to-date legal expertise without doing all the research 
• Lower your risk by preventing mistakes, fines, or missed obligations 
• Get personalized support for taxes, licenses, HR, audits, and more 

Choose the best way to stay compliant. Fill out the form below to handle your legal and compliance tasks professionally.

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