Employer of Record (EoR) in Indonesia
An Employer of Record (EoR) allows a foreign company to legally hire employees in Indonesia. In an employer of record arrangement, PNB Law Firm will become the legal employer of the client, while the client still still manages the work and time of the employee. With this arrangement, the client can operate in Indonesia without the need to establish a company in Indonesia.
PNB Law Firm, as legal employer in Indonesia shall arrange all administrative task to ensure compliance with local regulations. These task include:
- sponsoring work permits for foreign workers in Indonesia;
- running payroll;
- withholding and paying employee taxes;
- paying social security contributions;
- preparing necessary legal documents, including work agreements; and
- ensuring that all employees will work compliantly in Indonesia by following all manpower, immigration and tax laws and regulations.
As your dedicated Employer of Record (EOR), PNB Law Firm hires employees directly in Indonesia on your behalf. We handle all risk mitigation and compliance — while you maintain full control of your employees.
Why Use Employment of Record Services?
The main reason to use employer of record services are:
- Fast. The foreign company does not want to establish a local entity in Indonesia due to time constraints. A local entity is required to hire employees in Indonesia. This often is the case when a foreign company has a project in Indonesia (e.g. and IT project), and only requires its employees to work in Indonesia for the duration of the project;
- Compliance.The foreign company prefers to fully or partially outsource its HR, to ensure full compliance with Indonesian manpower regulations;
- Costs Savings. The Employer of Record solution could lead up-to 60% costs savings as compared to establishing a company in Indonesia and managing HR fully in-hours.
The employment of record solution is equally effective for both local residents and foreign workers, since the solutions is fully compliant with the local Indonesian manpower laws.
Who Should Use Employment of Record Services?
Employment of record services are particularly valuable for companies which:
- are considering to enter the Indonesian market, but are unsure if they will actually start operations in the market;
- have one or more projects in Indonesia, however which are unclear if they will have long-term engagements in Indonesia;
- have an international headcounts between one and 20 employees;
- are required to enter the Indonesian market quickly and have no time to establish an entity in Indonesia; or
- do not have the financial and internal resources required to establish an entity in Indonesia.