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Employing foreign workers requires specific permits, including a Work Permit (IMTA) and a temporary stay permit (KITAS). Employers must also provide a clear reason why the position cannot be filled by an Indonesian worker and ensure the foreign worker’s role aligns with approved positions under the Ministry of Manpower’s regulations.

Employees who are terminated are entitled to severance pay, long-service pay (if applicable), compensation rights, and other benefits as mandated by Government Regulation No. 35 of 2021. The amount depends on the reason for termination and the employee’s length of service.

What types of cases are handled by Indonesian State Administrative Courts (PTUN)?

The cases involve disputes over administrative decrees, including issues related to business permits, licenses, regulatory compliance, issuance of land certificate, land use regulations, administrative sanctions imposed by Indonesian government agencies, etc.

What are the conditions for a state administrative decree to be disputed in Indonesian State Administrative Court (PTUN)?

The state administrative decree shall be written decision; issued by a State Administrative Agency Office; constituting an act of state administrative law; based on relevant legal regulations; concrete, individual, and final; and generating legal consequences for an individual or legal entity.

What are the grounds for challenging an administrative decision in Indonesian State Administrative Courts?

Common grounds for challenging administrative decisions include procedural errors, violations of statutory rights, lack of legal basis, decisions that are deemed unlawful or unfair, etc.

What happens if I miss the 90-day deadline to file a lawsuit in Indonesian State Administrative Courts?

Missing the 90-days deadline to file a lawsuit can result in the case being dismissed due to procedural non-compliance. It is crucial to adhere to statutory deadlines to avoid potential legal obstacles.

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.

There are two types of employment contracts: Fixed-term contracts (Perjanjian Kerja Waktu Tertentu or PKWT) and Indefinite-term contracts (Perjanjian Kerja Waktu Tidak Tertentu or PKWTT). Fixed-term contracts are used for specific time periods or projects, while indefinite-term contracts are open-ended.