Home Blog Understanding Work Culture in Indonesia: A Guide for Foreign Employers Uncategorized Understanding Work Culture in Indonesia: A Guide for Foreign Employers InCorp Editorial Team 4 July 2025 4 minutes reading time Table of Contents Why Foreign Employers Should Consider Investing in Indonesia Talent Pool? Understanding Work Culture in Indonesia Simplify Talent Recruitment with HR Outsourcing Service in Indonesia Cekindo As Your HR Outsourcing Partner Indonesia’s demographic dividend remains promising as over 70% of its total population is categorized into the working-age group (15-64 years old), accompanied by a decline in the birth rate in 2020. Moreover, the government is planning on improving the talent management for the working-age group to provide skilled human resources for both local and foreign companies operating in the country. For companies to operate smoothly with the local talent, it is imperative for them to understand the work culture in Indonesia. This article will deal with various aspects of recruiting in Indonesia. Why Foreign Employers Should Consider Investing in Indonesia Talent Pool? The Government Initiatives to Improve Indonesian Talent Management The Indonesian government is presently working on a major plan to create the National Talent Management body (MTN). It is focused on improving three major areas: research and development, arts and culture, and sports. National Talent Management will assume a paramount role in attracting, retaining, and developing the talent pool. Personal growth, life management, and post-retirement management will also be handled with utmost responsibility by the body. Tech Startups are Reshaping Indonesian Talent Pool The majority of Indonesians recognize the impact of technological advancement on their employment and seek upskilling and reskilling to address the skill gap. Furthermore, as a result of the country’s growing tech startup culture, the youth is increasingly pivoting towards entrepreneurship. Prominent young Indonesian entrepreneurs have proven that small startups can grow into profitable businesses that will also boost the country’s economy. Foreign Companies can capitalize on Indonesians’ entrepreneurial spirit to expand and reap greater yields since this mentality is often associated with a high sense of ownership for one’s work and learning experience. Understanding Work Culture in Indonesia In addition to the technical skills, foreign employers must take into account the work culture in Indonesia and its influence on the operation of the company before recruiting Indonesian talent. Work Culture in Indonesia’s Typical Workplace Dodging Conflicts Indonesian employers make every effort to avoid conflicts of any type to establish a peaceful environment in the workplace. Friendly Workspace An Indonesian workplace is a peaceful and friendly environment where the co-workers don’t hesitate to ask personal questions and form friendships. Punctuality Punctuality is highly valued and appreciated as it portrays a sense of responsibility in the individual. Gratefulness Indonesian employees strive to be helpful and pleasant, to understand one another. Saying ‘Thank You’ is considered a positive attribute because it demonstrates gratitude. Criticisms in Private To respect the pride and integrity of an employee, there is a culture of private criticism in an Indonesian workplace. Respecting the Head In an Indonesian workplace, the employees must be aware of who their superiors are, and greeting them first is considered a positive behavior. Approaching Seniors The Indonesians are aware of the significance of their superiors. They address superiors, not with first or last names but with appropriate titles, such as “Bapak” meaning “Sir” or “Ibu,” meaning “Ma’am.” Appeasing Leaders There is a culture of making the leaders happy in an Indonesian workplace, where subordinates don’t question or talk back out of respect. Firm Handshakes Seniors in Indonesia are initially offered handshakes, although the tradition might differ between companies. It is typical in Indonesia to handshake with a little pressure. Professionalism The staff must be professional in all situations throughout working hours, while being helpful, pleasant, and good team members, and avoiding gossip to dodge problems. Simplify Talent Recruitment with HR Outsourcing Service in Indonesia Having an in-house HR department adds to the management stress, moreover requires time and resources to train the personnel. Thus, most companies are now looking for efficient options, like outsourcing their HR functions to specialists to ensure that their organization is compliant. By partnering with an HR outsourcing provider in Indonesia, a company can recruit desired employees, stay on top of legal regulations, cut costs and time-consuming operations in the HR department. Cekindo As Your HR Outsourcing Partner As one of the prime HR outsourcing providers in Indonesia, InCorp Indonesia (an Ascentium Company) understands the impact of discovering the right talent and effective management of HR functions. These important HR processes, though wearisome, will significantly impact your eventual success. Our on-demand model of HR outsourcing in Indonesia will deliver unparalleled HR services to clients across all industries and businesses, enabling your company to grow more rapidly and effectively. Get the best talent and HR services for your company with InCorp. Our HR specialists will ensure you get the perfect candidate and take care of all your taxing HR functions. Read Full Bio 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 How many incorporation types exist in Indonesia? 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 How long does it take to set up a PMA company, and how soon can it begin commercial operations? Establishing a PMA Company in Indonesia typically takes around two weeks after completing document requirements. Following establishment, additional steps such as obtaining licenses and registering for Tax ID vary based on business type. Last, some licensing processes may take time, necessitating thorough planning and preliminary assessments of the business plan for a smoother process. How do foreigners decide on the proper entity in Indonesia? It all depends on your business’s purpose and nature. Our consultants will help you to clear out the matters. If investors intend to conduct business in Indonesia, what kind of organization must they establish? 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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