Employment regulations in Indonesia have undergone recent updates to ensure better worker protection and to align with evolving labor market dynamics. Generally, they consist of various aspects starting from basic responsibilities, job safety, and even about pension plans. Employment regulation consists of many different rules that govern different aspects of work. This regulation applies from the moment an employee is hired until their working period is completed. 

What are the Employment Regulations in Indonesia?

There are several laws and statutes that regulate employment matters in Indonesia:

1. The Manpower Law or Labor Law Number 13 of 2003, it was most recently amended in 2020 with the formulation of the Job Creation Law or Omnibus Law.
2. Industrial Relations Dispute Settlement Law or IDRS Law Number 2 of 2004.
3. The Employee/Labor Union Law of 2000

In 2021, certain sections of the Manpower Law amendments were proven unconstitutional. As such, the Indonesian government must address these issues within the period of 2 years. In that regard, it is important to note that new updates might arrive in the near future. 

Types of Employment in Indonesia

There are two main types of workers according to the employment regulations in Indonesia: permanent and fixed-term employees. In the case of a verbal agreement, the employer is responsible for providing the employee with an authentic appointment letter that clearly defines the timeline, expectations, and wages offered for the role. Meanwhile, the employment contract with a fixed-term employee is more strict. Employment agreements for fixed-term employees cannot include terms of a probation period. In this type of employment, verbal agreements are invalid. Furthermore, it is important to note that you can only extend the fixed-term employment contracts once. 

Working Hours in Indonesia

According to the Manpower Law, the normal working hours in Indonesia must not exceed seven hours per day, six days per week, and in total 40 hours per week. Female employees who are pregnant with doctor’s advice cannot work between 11 p.m. to 7 a.m. Furthermore, employees are eligible to receive overtime pay after finishing their seventh or eighth hour at work. Overtime policies vary between companies but overtime hours cannot exceed 3 hours per day and 14 hours per week. Overtime pay is worth double the hourly wage of the employee. At the minimum, every employee has the right to get a thirty-minute break after at least four hours of consecutive work. Employees who work five-days a week get Saturdays and Sundays off, while six-day workers get Sundays off. 

How can Double M help?

The government created employment regulations in Indonesia to protect the worker’s rights. With Double M’s help, you will be able to comply with the employment regulations in Indonesia. 

Dahsuskim permit in Indonesia is an ease of access given to foreign nationals who work as captains, ship crew/floating equipment operating in Indonesian territorial waters such as archipelago, continental shelf, and Exclusive Economic Zone (ZEE). In particular, this ease of access is granted in the form of visas, immigration permits, foreign registration and re-entry permits. 

Who is Eligible to Obtain Dahsuskim Permit in Indonesia?

Foreigners who work in the sea are surely obliged to have a Waters Limited Stay Permit (KITAS Perairan). Dahsuskim or Water KITAS can be extended by applying for an extension of stay permit at least 14 working days before the stay permit expires.

Requirements of Dahsuskim Permit

1. Dahsuskim application letter and guarantor from the TKA employer
2. Letter of application for limited stay permit (ITAS)
3. Letter of recommendation from a government agency

• Decree of the Director General of Sea Transportation
• Decree of the Director General of Capture Fisheries
• Ministerial decree

4. Copy of Passport
5. Copy of Entry stamp
6. Copy of e-Visa
7. Foreign Ship Agency Approval (PKKA)
8. Port clearance
9. International Meteorological Organization (IMO) Crew list

Dahsuskim Permit Application Procedures

Filing

• Employers must obtain a Foreign Ship Agency Approval Letter (PKKA) issued by the Directorate General of Sea Transportation to stop in Indonesian waters.
• Applicants must have a Permission Ashore Card if they wish to go ashore and is valid 7 days after issue.
• Application for SK Dahsuskim to the Directorate General of Immigration with the crew list document.

Application

• Employers apply for RPTKA and IMTA online as approval for work permits.
• In short, after the work permit is approved and the crew or floating crew come to Indonesian territory with their means of transportation, the employer must attach all the documents required for reporting and making a Waters KITAS to the Immigration office and be given a billing for PNBP payments.

Biometrics

• After submitting the application and payment of PNBP, foreigners who are crew members of ships or floating crews take biometrics at the Immigration office

Issuance of KITAS

• Immigration will issue a KITAS in accordance with the application of the employer who has completed the work contract of foreigners who are crew members of ships or floating crews. Overall, KITAS issuance is 2 working days after the biometric

How can Double M help?

Dahsuskim Permit is a special immigration facility in Indonesia that will help you conduct business in the country with ease. Thus, with Double M’s help, you will be able to complete the procedures with no hassle. 

Outsourced accounting service in Indonesia is a term used for all-in accounting services provided by an external party. Typically, outsourced accountants provide the-day-to-day management of payable accounts, receivable accounts, financial reporting, cash flow reporting and many others. Outsourced accountants generally consist of several individuals forming a small team, which will cost considerably less than hiring actual employees. 

Types of Outsourced Accounting Service in Indonesia

1. Bookkeeping

In this service, we will organize your pre-existing books and ledgers. Should it be necessary, we shall create new ones. Furthermore, we will assist you in keeping tabs of claim forms, bank slips, bank statements, and various accounting reports that your company might have. 

2. Financial Reports

In this service, we will record, organize, and compile records of your monthly accounts. Including balances, statements, receivables, and payables. Everything will be organized in order and will be ready for your disposal within your preferred timeline. 

3. Payment Records

When conducting business, it is very likely that you will strike a partnership with external vendors. With outsourced accounting service in Indonesia, we will assist you in reviewing and managing invoices from vendors. We will make sure everything is orderly and make sure the figures are exactly correct. 

4. Financial Planning

In doing business, planning your finances properly is strongly advised. In this service, we will give you suggestions on budgeting, forecast your financial condition in the future, and make sure everything goes smoothly. 

5. Account Review

Streamlining and improving the accounting system is a must in order for the company to succeed. Therefore in this service, we will renew your accounting policies to the current developments. We will make sure that even the tiniest details will be kept in the records properly.

Benefits of Outsourced Accounting

1. Freedom

Most outsourced accounting service in Indonesia these days use cloud-based accounting software. With this method, you will be free to access your accounting records from anywhere in the world at any given time. 

2. Cost Saving

It is quite expensive to hire and train dedicated accounting personnel. However, by hiring an outsourced accountant, you will eliminate potential hiring and training costs. 

3. Continuity

When you hire accounting staff and they leave the company, important information goes out with them. By using outsourced staff, there is no risk of knowledge loss and you can get some continuity. 

Type of Companies That Use Outsourced Accounting Service in Indonesia

1. Small Business

Small businesses do not usually need full-time accountants, considering that they are mostly still in the process to establish other departments. As such, recruiting outsourced accountants usually becomes a solution

2. Company Struggling to Hire

There are many cases where companies struggle to recruit full-time accountants, be it for requirements or experience reasons. When it happens, they tend to use outsourced accounting service in Indonesia. 

3. Non-Profit Organizations

Just like their name, profit and finances and cash flow management are not typically the main priorities of this type of company, but there are times where they are still needed. Therefore in this scenario, it becomes a good solution to hire outsourced accountants. 

How can Double M help?

Using Outsourced Accounting Service in Indonesia is a great way to manage your finances. With Double M’s help, you can focus on other aspects of businesses and leave the accounting matters to us.

Employer of Record in Indonesia is certainly one of the best solutions for companies that want to begin an expansion. Early start-up period of business is crucial, as you will need to prepare the groundwork for administrative matters such as legal documents, employee recruitment, and tax documentation. All of these things might be too much of a hassle for the companies to handle alone. 

What is an Employer of Record in Indonesia?

An employer of record in Indonesia, commonly known as EOR in Indonesia, is a company or organization that assumes the role of employer for administrative purposes while the employee actually works for a different company, usually abroad.

The company offering their EOR service in Indonesia performs all the tasks and responsibilities of a typical employer on behalf of the original employer. An Employer of Record in Indonesia is hugely popular among companies who are in the early stages of market expansion. 

Why Should You Use an EOR in Indonesia?

By using an EOR Service in Indonesia, you will be able to delegate administrative tasks to a local company of your choosing. They will perform payroll tasks, HR, and other basic tasks while you can still monitor proceedings from your country of origin.

If your company is still in its early stage of expansion, it would be quite the hassle and might also cost a fortune to perform these tasks alone. Having an EOR at your disposal will ensure that your company is in safe hands while you prepare the strategic moves. 

Benefits of Employer of Record Service in Indonesia

There are several benefits of hiring Employer of Record in Indonesia, such as:

1. Transcend Barriers

One of the biggest obstacles of opening up a company overseas is the geographical distance. There are simply too many aspects that you must take care of directly in the intended location. This is where hiring an EOR company in Indonesia would highly benefit you. Using the services of a local EOR company will allow you to start your business right away. 

2. Compliance

Each country you expand to has its own legal, tax, and payroll regulations. With this in mind, it would be much better for you to have local experts. By hiring a local EOR company in Indonesia, you would be in a better position to comply with local regulations. 

3. Time-Efficient

Operating a company, especially in its early stages, is a time-consuming activity. It is even more difficult when you are yet to have personnel stationed in the new country. By using the services of an Employer of Record in Indonesia, you can delegate the preparation tasks. 

4. Cost-Saving

Companies who expand abroad usually use the services of consultants from multiple sectors to perform tasks for them. Typically, EOR companies offer all-in-one services for you so you do not have to contact multiple parties for separate tasks. Paying a one-time fee for all the services is surely the best way to get discounts and better price points. 

5. Risk Management

Establishing a business surely presents a risk in itself, even more so when you are opening one overseas. In order to brace yourselves for these risks, it would be better to have competent, local experts taking care of your business operations until it is properly established.

How can Double M help?

Employer of Record in Indonesia helps your company establish itself in its early stage. Double M offers this service to help our clients get their business up and running.

For our reputation in the EOR industry, RemotePad has placed us on its list of top-tier EOR companies in Indonesia.

Franchise Registration in Indonesia is a hugely popular business practice in recent years. In concept, a franchise business consists of a business deal between the original owner (franchisor) and the license holder (franchisee) that seeks to expand the same business to new locations. With this type of business model, both parties could reap the benefits. 

Criteria of Franchise Registration

According to the Ministry of Trade Regulation No. 71 of 2019, there are several criterias of a franchise business, such as

• proven record that the franchise is already profitable
• has a written standard for marketing goods and/or services; 
• easy to teach and apply
• there is continuous support
• registered Intellectual Property Rights (IPR).  

Basic Requirements of Franchise Registration Indonesia

In accordance with Government Rule Number 42 of 2007, there are several basic requirements necessary for a franchise business. First, it must  have a distinct unique selling point, proven track record of generating profit, proper Standard Operating Procedures of the products or services, continuous support from the franchisor, and Intellectual Property Rights documents. 

Pre-Contract Requirements of Franchise Registration in Indonesia

There are several documents you must prepare for the pre-contract stage to do Franchise Registration, such as:

1. Identity of franchise owners
2. General legal documents
3. Business history
4. Business structure
5. Balance sheet audit for the past 2 years
6. Numbers and names of existing franchises

Administrative Requirements to do Franchise Registration

There are several administrative requirements for Franchise Registration, such as:

1. Registration Form
2. Copy and original ID Card of the Franchisee
3. Copy of franchise prospectus
4. Copy of franchise agreement
5. Copy of business license
6. Copy of HAKI Registration
7. Details of manpower plans
8. Composition of franchised raw materials
9. Copy of Article of Association
10. Copy of individual and company Tax ID Number
11. Copy of BPJS Health and BPJS Manpower Membership Card

Technical Requirements of Franchise Registration

There are several technical requirements to register a Franchise, such as:

1. Recommendation letter from Ministry of Trade
2. 80% percent of production tools and products themselves must be produced in Indonesia
3. Franchisees must collaborate with local Micro, Small, and Medium Enterprises.

Procedures of Franchise Registration in Indonesia

To make it easier for business people throughout Indonesia to start a business, since 2018 the government has implemented Online Single Submission (OSS). With this system, business people can take care of various business licenses, intellectual property rights and also manage franchise businesses. The following is a brief procedure for obtaining a franchise business license using the OSS method:

1. Register via https://oss.go.id/oss/ and fill in the information on the list menu, and validate the account email and user ID and password to log-in.
2. Get NIB (Business Identification Number)
3. Issuance of a Franchise Registration Certificate (STPW)
4. Fulfillment of Commitment Requirements such as fulfilling prospectuses and franchise agreements
5. Issuance of STPW by the Directorate of Business Development and Distribution Actors of the Ministry of Trade and/or the Investment Service and also by Regency and City PTSP

How can Double M help?

Franchise Registration in Indonesia is an excellent way to expand your business operations in the country. Double M strives to help our clients throughout the whole registration procedure. Should you have any inquiries, please contact us.

PSE in Indonesia – In order to regulate and keep online-based businesses in check, the Ministry of Communications and Informatics (Kominfo) introduced the PSE certification, which stands for Penyelenggara Sistem Elektronik. The certification process itself has been implemented since 2015. However, it caused a controversy in 2022 when several high profile businesses were blocked temporarily because they hadn’t obtained or renewed their PSE in Indonesia. 

That case taught us that having a PSE certificate is crucially important for online businesses in Indonesia, and the failure to comply may lead to the stoppage of your operations. As a result, it is important to know what PSE is and how you can obtain it. 

Types of PSE in Indonesia

According to the Government Law of 2019 Number 71, there are several types of PSE:

1. Public PSE

Public PSE certification is given to electronic systems provided by institutions organized by the country, such as public health services (BPJS). Usually, these governmental electronic systems have go.id as their web domains. 

2. Private PSE

Private PSE certification is for non government electronic systems, such as WhatsApp, Twitter, Facebook, Instagram, etc.

After understanding the different types of of PSE, it is also important to understand that PSE certification is mandatory for:

1. Companies that sell products and offer services to the public though applications or websites.
2. Companies that conduct online transactions.
3. Companies that manage fund deposits.
4. Companies that manage financial translation data.
5. Companies that send digital goods to their customers

Requirements of PSE in Indonesia

1. Registration form in the https://layanan.kominfo.go.id/register website, along with the following details

• Business ID Number and Business License
• Letter of Domicile
• Identity of the Person in Charge (PiC)
• Individual or Company Tax ID Number
• Profile of Electronic System Provider
• Detailed Technical Brief of the Electronic System
• Web domain of the Electronic System and security certificate

Registration Procedures of PSE

1. Account Registration

Before obtaining a PSE certificate, you must first register an account at the Kominfo website, filling information such as your personal and company identity and technicalities of your electrical system. 

2. Documents Verification

The authorities at Kominfo will verify the documents after the submission. 

3. Issuance of PSE Certificate

After your documents are verified successfully, you will obtain a registration number which will be used to keep track of your registration process. When everything is finalized, you will obtain the PSE certificate.

How can Double M help?

Obtaining a PSE certificate is an intricate and thorough process. We will be helping you through the procedures. Should you have any inquiries, please contact us.

Manufacturing Companies in Indonesia – Indonesia and Japan and are putting plans in motion to further collaborate in establishing manufacturing companies in Indonesia. This joint venture will also put emphasis on the usage of electric vehicles (EV). The Minister of Industry Agus Gumiwang Kartasasmita said on a written statement, Thursday (8/9/2022)

Manufacturing Companies in Indonesia – Partnership between Indonesia and Japan

“In this working relation with Japan, I hope to obtain their specific knowledge and advanced technology which  can be used in Indonesia’ future strategic programs, especially natural commodity downstreaming, research and development of electric vehicles, and health and food sector”, the Minister said.

This partnership is just one of many agendas that will be discussed and ratified in the Indonesia-Japan Economic Partnership Agreement, which was announced during the G20 Conference in Bali. 

In return, Indonesia is committed to offer trade deals for goods or spare parts in the manufacturing industry. It is hoped that this can create a win-win solution for both nations and smoothen the deal between one another. 

Business Relations between Indonesia and Japan

The business relations between Indonesia and Japan are getting stronger by the day. In recent weeks, Japan has committed around IDR 37 trillion to manufacturing companies in Indonesia, specifically in the electric vehicle category. It is reported that the funds are coming from two of the most renowned Japanese automotive manufacturers, Toyota Motors and Mitsubishi Motors.

Future Business Prospects in Indonesia and Japan

It is widely believed that the electric vehicle industry will be booming from 2022 onwards. In relation to the Indonesian government’s latest fuel policy, the people of Indonesia are expected to switch from fuel-powered vehicles to electric vehicles. The current demands are very high and they are expected to rise even further.
By looking at the upwards trend of manufacturing companies in Indonesia, it looks like environment-friendly product registration will be the most popular service moving forward. Japan has paved the way and it also presents excellent investment opportunities for other countries in the world.

How can Double M help?

Indonesia is opening many opportunities for collaboration in the manufacturing industry. With Double M’s help, you can find suitable business partners or even establish your own manufacturing company in Indonesia

Wage Hosting in Indonesia – Establishing a company in Indonesia is a process that could take a substantial amount of time. There are many instances where companies are still being set-up, but they need their operations to begin immediately. If that is the case, you can use Double M as some sort of broker or intermediary, which hires employees on your behalf and pays their salaries under Double M’s company payroll. This type of service is called wage hosting in Indonesia. 

What is Wage Hosting?

By definition, wage hosting is a temporary service which allows Double M to hire employees on behalf of foreign companies wishing to start a business in Indonesia. In most cases, the recruitment process in a wage hosting process is merely a formality. This is because the foreign companies usually have their own candidates. As such, common recruitment procedures like job interviews are no longer necessary. 

What is the Scope of Service?

Since interviews are not necessary, services of wage hosting in Indonesia focus on the administrative side of things such as employment contract drafting, salaries, and potential benefits for the employee. In Indonesia, one unique employment benefit that stands out is BPJS, which is a health insurance for all employees working in Indonesia. In more details, here are the services of wage hosting in Indonesia:

1. General HR support, such as:

• Drafting employment contracts in accordance with the Indonesian labor regulation
• Socialization regarding the latest updates of employment regulation
• HR consultation via email or phone
• Contract or employment termination

2. Calculation and processing of  monthly salary
3. Calculation and deduction of BPJS
4. Calculation and deduction of income tax
5. Registration of BPJS Manpower and BPJS Health
6. Monthly contribution management of BPJS Manpower and BPJS Health
7. Creation and submission of employee’s tax report

What are the Advantages of Wage Hosting?

Using wage hosting in Indonesia is quite a popular choice, since it could potentially bring several advantages such as:

1. Legal Protection

The first advantage of wage hosting is legal protection. You as the client will not be exposed to the Indonesian legal system nor have the risk of going into legal troubles because Double M conducts the recruitment and salary payment on your behalf. 

2. Minimal Cost

The process of searching and recruiting employees could cost you a lot of fortune, especially when it’s in a foreign country. By using wage hosting services, you will only need to pay one invoice and let Double M complete all the work. This method will certainly save you a lot of money. 

3. Effectivity

Employee recruitment process might take the majority of your resources and energy if you conduct it on your own. By using wage hosting services, you can delegate it to others and allocate your effective time for other priorities.

How can Double M help?

Using wage hosting services could help ease your recruitment process in Indonesia. With Double M’s help, you will be able to conduct the process efficiently. 

Police Clearance Certificate in Indonesia is an official document issued by the Indonesian Police to the applicant to declare that the applicant has a clean criminal record. In Indonesian terms, the document is also known as Surat Keterangan Catatan Kepolisian or SKCK. Both Indonesian and foreign citizens who hold KITAS or KITAP, can applyh for SKCK. SKCK is valid for 6 months since the day it was issued and can be extended when it’s past due. 

Why Do You Need a Police Clearance Certificate in Indonesia?

For foreign citizens, an SKCK is an important document. You will need to have an SKCK if you want to apply for permanent residency, apply for jobs and apply for naturalization as an Indonesian citizen. 

Not only for administrative processes, foreign citizens may also need SKCK in more casual situations. For example, many car vendors in Bali require potential renters to show their SKCK before they can officially rent their vehicles. The document is very useful to show that you have a clean criminal record. 

Requirements to Get Police Clearance Certificate in Indonesia

There are several requirements that you must prepare in order to get SKCK in Indonesia:

1. STM of the applicant [Surat Tanda Melapor from Police office]
2. SKTT of the applicant [Surat Keterangan Tempat Tinggal from Civil Registration office]
3. Application letter from the sponsor or employer in Indonesia. HR manager must sign the letter [Double M will provide the template]
4. Copy of valid passport
5. Copy of KITAS
6. Copy of IMTA [work permit issued by Manpower Dept.]
7. 6 pcs of color photo [size 4×6 cm] with yellow background [in the photo you must wear collar shirt and not using facial accessories].
8. Finger stamps [Double M will provide the form from Indonesia Police Department].

Procedures to Get a Police Clearance Certificate in Indonesia

You can get the Police Clearance Certificate through offline and online procedures:

1. Offline Procedures

• Visit the nearest police office while bringing all the required documents.
• Fill out a form about your personal information.
• Submit your fingerprints.
• Complete the payment of the administration fee.

2. Online Procedures

Based on the notification letter of the National Police Chief number: B/2134/III/REN.2./2023/DivTIK, starting from March 20, 2023 online SKCK applications can be applied through the SUPERAPPS PRESISI POLRI application which can be downloaded via Google Play Store and App Store

How can Double M help?

Police Clearance Certificate in Indonesia is an important document in a lot of circumstances. With Double M’s help, you can meet all the requirements and obtain the document with no hassle.

Export partners in Indonesia is a crucial matters for foreign companies. As the world’s fourth most populous country, Indonesia is a potential market for you to export your products to. With the large number of people in the country, the demand for products is naturally high. However, you must have the correct strategy to determine your potential export partners in Indonesia.

Benefits of Having Export Partners in Indonesia

There are several benefits of having export partners in Indonesia:

• You will obtain more access to consumers and businesses. With this method, you will be able to have more profits and expand your business in Indonesia.
• You will be able to diversify your market opportunities. By doing this, you will have a safety net in case your domestic economy falters. You will still have a growing market at your disposal to do business. 
• You will be able to expand the lifecycle of your products. If your domestic market is too saturated with similar products, you can market your product Indonesia. 

Procedures to search for an Export Partner

1. Preliminary Meeting

In the preliminary meeting, we will clarify a few points to our client which includes discussions about their existing clients in the Indonesian market, types of products they offer, profiles of partners they seek to work with, information about their competitors and many more.

2. Market Research & Market Note

After understanding the client’s criteria for potential partners, our team will conduct a Market Research to find the most suitable partners for our clients. We will also give them Market Note which provides information regarding mutual business interests, complementary services, skill sets, and strengths. The aim is to create a beneficial partnership for both parties.

3. Partner Rating and Selection

After the Market Research process is completed, our team will send the names of the potential partners to our client. The client will be given the chance to rank, prioritize, and measure their level of interest and ultimately select their partners.

1. A = Very Good
2. B = Good
3. C = Average
4. D= Not Good

4. Final Meeting

Once the clients have made their choice, our team will contact the potential export partners in Indonesia and arrange a meeting with all parties involved. This will be the final meeting with the agenda of finalizing the terms of agreement before the partnership comes in full effect.

How can Double M help?

Finding export partners in Indonesia is not easy. With Double M’s help, you will be able to find them with ease.