The introduction of KBLI 2025 has created understandable concern among foreign investors. Many companies are asking whether their existing licences remain valid. Others are considering immediate amendments to their NIB and Articles of Association. The short answer is reassuring. A PT PMA does not automatically need new licences merely because KBLI 2025 exists. Existing licences […]
A creditor may hold one large unpaid claim against an Indonesian company. However, the creditor may lack evidence of another creditor. This creates a serious obstacle before filing a PKPU petition. Could the creditor transfer part of its claim to another party? Would that transfer create two creditors under Indonesian law? The short answer is […]
Coal export regulation Indonesia 2026 is now one of the most important legal issues for mining companies. Indonesia remains a major global coal exporter. However, the regulatory landscape is becoming more controlled, more technical, and more enforcement-driven. For mining companies, this creates real business pressure. A contract that looked safe last year may now need […]
When should I consider Tax Due Diligence?
Tax Due Diligence is crucial during mergers, acquisitions, company restructuring, or when preparing for a sale. It ensures you have a clear understanding of the company’s tax position before making critical decisions.
What are the potential outcomes of Tax Due Diligence?
Our findings will highlight any tax risks, compliance issues, or areas where improvements are needed. We provide recommendations to address these issues, helping you make informed decisions.
What happens if tax issues are found during Due Diligence?
If tax issues are identified, we’ll work with you to develop strategies to mitigate these risks. This may involve negotiating with the other party in the transaction or addressing the issues before proceeding.
Can Tax Due Diligence prevent future tax disputes?
While it can’t guarantee immunity from future disputes, Tax Due Diligence significantly reduces the risk by ensuring that any existing issues are identified and addressed early on.
Can Tax Due Diligence affect the valuation of a company?
Yes, Tax Due Diligence can impact a company’s valuation. Unresolved tax issues or significant liabilities discovered during the process may lead to adjustments in the purchase price or deal terms.
What are the common challenges in Tax Due Diligence in Indonesia?
Challenges include navigating complex tax regulations, incomplete or inaccurate financial records, and historical non-compliance.
How does Tax Due Diligence differ from a standard financial audit?
A financial audit focuses on the accuracy of financial statements, while Tax Due Diligence specifically examines tax compliance and risks. The two processes complement each other but serve different purposes.
Renewals must be processed before your KITAS expires. We recommend starting the process well in advance to avoid overstaying penalties.
Severance pay is calculated based on the employee’s length of service and the reason for termination. The formula includes severance pay, service appreciation pays (if applicable), and compensation for untaken leave or other rights as per Government Regulation No. 35 of 2021.
Employment contracts must be in writing and should clearly outline both employer’s and employee’s rights and obligations, including job responsibilities, working hours, salary, benefits, and the duration of employment. The contract should comply with Indonesian Manpower Law No. 13 of 2003, as amended by the Job Creation Law.
What is an Investor KITAS, and how is it different from a Work Permit KITAS?
The Investor KITAS allows foreign nationals who hold significant shares in an Indonesian company to live and manage their investment in Indonesia. Unlike the Work Permit KITAS, the Investor KITAS does not require a separate work permit (IMTA) as it focuses on investment management rather than employment.
What are the key legal regulations governing visas and stay permits in Indonesia?
The Indonesian Ministry of Law and Human Rights Regulation Number 22 of 2023 outlines the legal framework for all visas and stay permits.
Can I apply for a Work Permit KITAS if I work for a foreign company based outside of Indonesia?
No, a Work Permit KITAS requires sponsorship from a legally registered Indonesian company. Foreign companies based outside Indonesia cannot sponsor a KITAS unless they establish a legal presence in Indonesia, such as a PT PMA.
Can I convert a Single-Entry Business Visa or Multiple-Entry Business Visa to a KITAS?
No, you cannot convert a Single-Entry or Multiple-Entry Business Visa to a KITAS. KITAS applications must be initiated separately through your employer or investment sponsor and require different documentation and procedures.
What should I do if I need to renew my KITAS?
Renewals must be processed before your KITAS expires. We recommend starting the process well in advance to avoid overstaying penalties.
Can I bring my family with me on a Work Permit KITAS
Yes, you can bring immediate family members (spouse and children) under a Dependent KITAS. Your dependents will be issued a KITAS based on your work permit, allowing them to stay in Indonesia legally, though they cannot work.
Can I work in Indonesia with an Investor KITAS?
Yes, as an investor, you are allowed to manage and oversee your investments. However, the Investor KITAS does not permit traditional employment for other companies; it only covers activities related to managing your investments.
What happens if I overstay my visa or KITAS in Indonesia?
Overstaying your visa or KITAS can lead to fines of IDR 1 million per day, and if overstaying persists, deportation and potential blacklisting from Indonesia are possible. It’s important to ensure timely renewals and proper visa management.
How long does it take to process a Work Permit KITAS?
The processing time can vary, but typically it takes around 2 to 4 weeks from the submission of the required documents to the issuance of the KITAS.
What happens if my employment contract ends before my Work Permit KITAS expires?
If your employment contract ends, your employer must report the termination to the immigration office, and your KITAS will be canceled. You are required to leave Indonesia unless you secure another sponsorship or transition to a different visa type.
Can I conduct business activities on a Tourist Visa in Indonesia?
No, business activities such as attending meetings or negotiations are not allowed on a Tourist Visa. For such activities, you must apply for a Single-Entry Business Visa or a Multiple-Entry Business Visa, depending on your needs.
What are the consequences of working in Indonesia without a Work Permit KITAS?
Working without a proper Work Permit KITAS (Index E23) is a serious violation of Indonesian immigration laws. It can lead to fines, deportation, and possible blacklisting, preventing future entry into Indonesia. Always ensure you have the correct permit before engaging in any employment.
Can I change my visa type while in Indonesia?
In most cases, changing visa types (e.g., from a Business Visa to a KITAS) requires leaving Indonesia and applying from abroad. However, specific visas, such as a temporary visa to KITAS, may be converted under certain conditions. We can guide you on the best approach based on your situation.
Can I apply for a Work Permit KITAS (Index E23) if I am a freelancer or self-employed?
No, freelancers or self-employed individuals cannot apply for a Work Permit KITAS. The KITAS requires sponsorship from an Indonesian company that employs you in a specific role. However, other visa types may be available depending on your circumstances and types of freelancer activity.
How soon should I apply for a KITAS renewal before it expires?
It is advisable to begin the renewal process 30 to 60 days before your KITAS expires to allow sufficient time for processing.
Can I hold both a Work Permit KITAS and an Investor KITAS simultaneously?
No, you cannot hold both at the same time. You must choose between the Work Permit KITAS and the Investor KITAS depending on your role in Indonesia, whether it is as an employee or an investor.
What if my company’s investment level drops below the threshold required for an Investor KITAS?
If your investment falls below the required threshold (IDR 1 billion in shares or IDR 10 billion in capital), your Investor KITAS may be revoked, and you could lose your right to stay in Indonesia under that permit. It’s essential to monitor your investment levels to maintain compliance.
Can I study in Indonesia with an Investor KITAS or Work Permit KITAS?
No, these KITAS types are for business or employment purposes only. If you plan to study in Indonesia, you would need to apply for a Student KITAS, which is specifically designed for education.
How does the Multiple Exit Re-entry Permit (MERP) work with a KITAS?
The MERP allows you to leave and re-enter Indonesia while holding a KITAS. Without a MERP, your KITAS would be invalidated upon exit. The permit typically lasts for the duration of your KITAS and must be renewed along with your KITAS if needed.
Can I apply for a KITAS on arrival in Indonesia?
No, you cannot apply for a KITAS upon arrival. The KITAS must be processed before entering Indonesia, and you will need an entry visa related to the KITAS (e.g., VITAS) to convert it into a KITAS upon arrival.
