Taking the role of our client’s corporate legal counsel and helping our clients navigate the increasingly complex Indonesian regulatory landscape, we do general commercial work and regularly advise on the full life cycle of business matters.
Corporate legal compliance is the most priority legal concern for all sizes of companies and across all sectors and industries. With the potential legal risks of non-compliance being a great issue in the near future, a company needs to make sure that they are doing business legally and mitigate potential legal issues so that the business will run smoothly.
Our lawyers possess extensive technical experience in providing advice, guidance, preparing documentation, and legal compliance on a broad range of issues arising from day-to-day operational activities related to general and commercial matters.
Our goals are to simplify complex legal matters, defend and safeguard our clients’ business interests, minimize potential legal risk, and maximize results for our clients.
Why do you need our General Corporate, Legal Advisory & Legal Compliance service?
What are General Corporate services??
General Corporate services encompass assistance with day-to-day business operations, including corporate structuring, compliance with local laws, regulatory matters, and corporate governance.
What is the scope of Legal Advisory in Indonesia?
Legal Advisory includes offering expert opinions on Indonesian law, helping businesses navigate legal complexities, and providing strategic guidance for minimizing risks in transactions or operations.
Why is Legal Compliance important in Indonesia?
Legal Compliance ensures that your business follows applicable laws and regulations in Indonesia, helping avoid legal disputes, penalties, and potential shutdowns due to non-compliance.
How can you help with company formation in Indonesia?
We assist with setting up different types of companies, such as PT PMA, PT PMDN, Representative Offices (RO), Permanent Establishment (PE), ensuring that your business structure complies with Indonesian corporate laws.
How often should companies conduct a legal compliance review?
It is recommended to conduct a legal compliance review regularly or when there are significant regulatory changes, ensuring the business continues to operate within the bounds of Indonesian law.
What happens if a company fails to meet legal compliance standards?
Failure to comply can result in penalties, legal disputes, or suspension of business activities. Staying compliant helps safeguard your business from these risks.
What should businesses know about labor law compliance in Indonesia?
Businesses need to comply with labor laws concerning employment contracts, employee rights, and benefits. We ensure your HR practices align with Indonesian labor regulations.
Non-compete clauses are not explicitly regulated under Indonesian law, but they may be included in employment contracts. However, their enforceability depends on the specific terms, reasonableness of the restrictions, and the protection of the employee’s rights to earn a livelihood.
In Indonesia, divorce can be filed through the Religious Court (for couples of the same Muslim religion), or the District Court (for Non-Muslim religion and mixed-religion marriages). You must meet certain grounds for divorce as stipulated in Indonesian law.
The Industrial Relations Court is responsible for resolving employment disputes that cannot be settled through bipartite negotiations, mediation, or tripartite through Local Manpower Institution. This court handles disputes related to termination, wages, collective labor agreements, and etc.
Renewals must be processed before your KITAS expires. We recommend starting the process well in advance to avoid overstaying penalties.
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.
Mutual agreements between employers and employees to terminate an employment relationship must be documented in writing and signed by both parties. It is a voluntary process, and the employer typically offers compensation or severance payments in line with government regulations.
What is a PT PMA?
A PT PMA is a foreign-owned company in Indonesia, allowing international investors to own shares and operate within Indonesia under specific regulations.
What is a PT PMDN?
PT PMDN is a company fully owned by Indonesian nationals or entities and operates under local investment laws with fewer restrictions than PT PMA.
What is a Representative Office (RO)?
RO is a non-revenue-generating office set up by foreign companies for liaison, market research, or promotional activities in Indonesia.
What is a Permanent Establishment (PE)?
A PE is a foreign company’s local business presence in Indonesia, taxed similarly to local companies and used for operational activities.
What is the minimum number of shareholders required for PT PMA and PT PMDN?
Both PT PMA and PT PMDN require at least two shareholders.
What are the capital requirements for PT PMA and PT PMDN?
PT PMA requires a minimum of IDR 10 billion in capital, while PT PMDN has no specific minimum but must follow general corporate laws.
Can foreigners be involved in PT PMA?
Yes, foreigners can be shareholders and directors in PT PMA, though restrictions apply in certain sectors.
What taxes apply to PT PMA, PT PMDN, RO, and PE?
PT PMA and PT PMDN are subject to corporate taxes and VAT; PEs are taxed on local income, while ROs are not taxed as they don’t generate revenue.
Can a PT PMA operate in all business sectors in Indonesia?
No, certain sectors are restricted or closed to foreign investment under the Negative Investment List. It’s essential to verify sector-specific regulations.
Is local partnership mandatory for a PT PMA?
Not necessarily, but in some sectors, foreign investors must partner with a local entity or individual, depending on the industry’s regulations.
What documents are required to establish a PT PMA?
Key documents include Articles of Association, shareholder and director IDs, a registered office address, and compliance with sectoral licenses.
Can an RO transition into a PT PMA?
Yes, but the process requires establishing a new legal entity (PT PMA) and cannot simply be converted; it involves fulfilling investment requirements.
Can an RO hire employee?
Yes, an RO can hire local staff but is limited in terms of its operational scope since it cannot conduct direct business activities.
Are there industry-specific licenses required for PT PMA or PT PMDN?
Yes, many industries require specific permits or licenses in addition to general company registration, such as those for finance, construction, or mining.
What are the reporting obligations for PT PMA and PT PMDN?
Both must submit annual financial reports, tax filings, and comply with local labor and employment reporting to relevant authorities.
What is the difference between a PE and a branch office?
PE is a local taxable entity for foreign companies engaged in certain business activities, while a branch office is not common in Indonesia except for specific industries like banking.
