Business Administration in Indonesia

Overview by Globlatrade.net:

Setting Up a Company

Legal Business Entities

Types of Companies and Capital (Max/Min) Number of Partners/Shareholders and Liability Registration Fees
A Perseroan Terbatas is a Private Limited Company.
 
 
Minimum USD 250,000.
Minimum 2 shareholders.
 
 
Liability is limited to the amount contributed.
Company's name and statutes registration: IDR 385,000; Constitution act by a public notary: IDR 13,125,000.
A Representative Office
 
 
Minimum USD 250,000.
Minimum 2 shareholders.
 
 
Liability is limited to the amount contributed.
Company's name and statutes registration: IDR 385,000; Constitution act by a public notary: IDR 13,125,000.
 
Business Setup Procedures
According to the chosen form of company, PT or Representative Office, different formalities are to be carried out; they are given in detail on the website of the ICL Directory.
The Competent Organization
To create a Perseroan Terbatas (PT), the competent organization is the Bureau for the coordination of investments ((BKPM). To create a Representative Office, the competent organization may be, according to the sector of activity, the Ministry of Commerce, the Ministry of Finance, the Ministry of Public Works, or the Bureau for the coordination of investments.

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Working Conditions

Legal Weekly Duration
The legal duration of work is 7 hours a day and 40 hours a week for 6 working days in a week, or 8 hours a day and 40 hours a week for 5 working days in a week.
Retirement Age
55
Working Contracts
The work contract is essentially governed by the law and to a lesser extent by individual negotiation and collective agreements. Hiring conditions are strict and the formality of the work contract is rather rigid.

There are two types of contracts: fixed term and open-ended.

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Cost of Labor

Minimum Wage
The minimum wage is fixed by decree by the different provincial governors. It varies according to the provinces and the districts, and according to the sector concerned. In 2007, the average minimum wage was 673 300 Rp/month.
Average Wage
Average monthly gross earnings in Indonesia is IDR 1,199,187 (USD 118).
Social contributions
Social Security Contributions Paid By Employers: 7.24% to 11.74%.
Social Security Contributions Paid By Employees: 2%

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Social Partners

Social Dialogue and Involvement of Social Partners
We can mention the ASPEK Indonesia union.
Unions
Trade union congress of Indonesian workers (KSPI)
National Front for the Indonesian workers' struggle (FNPBI)
Unionization Rate
Less than 4% of the active population (formal and informal sectors) and 14% of the active population (formal sector).
Labor Regulation Bodies
Ministry of Labor and Transmigration

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Find more on GlobalTrade.net about Operating a Business in Indonesia.
 
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Experts Views (2)
Hot Tips (1) Go Top
  • Doing Business in Indonesia

    Indonesia is Southeast Asia’s largest economy and has delivered consistently high annual growth exceeding 6% in both 2007 and 2008. Growth of between 2% and 4.5% is expected in 2009.

    U.S. Commercial Service Poland on 1 Mar 2010 related to Business Administration in Indonesia

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