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9. Working in Indonesia

Indonesia at a Glance

Doing Business in Indonesia

Like New York, Jakarta is also a city that never sleeps.

Work Visas

It is quite difficult to obtain a valid work visa if you consider working in Indonesia. It is best if you find an employer before entering the country, as he/she will be able to facilitate your application. In addition, unfortunately for foreign nationals keen on working in Indonesia, most Indonesian companies have a policy of prioritizing local applicants.

As you can read in the article on Moving to Indonesia, a business visa is most common for people planning on doing business here. However, there are two problems concerning this visa: First of all, this visa cannot be used to work, but only conduct business, i.e. a project or visit, and secondly, it is valid only for 60 days.

Since most people planning on working in Indonesia tend to do so for longer than said period, they have to apply for a different visa. The IMTA is a work permit given to Indonesian companies which enables them to hire foreigners. It is thus virtually impossible for expats to find work in Indonesia without the help of a potential employer.

Business Etiquette

Business is business in every country. However, successful business partnerships can often be directly linked to one’s correct assessment of the proper etiquette. Indonesia is a mainly Muslim country, and one should be acquainted with the major Muslim holidays and practices. For example, bringing alcohol as a gift to a practicing and devout Muslim is inappropriate as it is forbidden in Islam.

Below you will find a few helpful hints for dos and don’ts concerning proper business etiquette in Indonesia:

• Business relationships are based on trust in Indonesia. It is important to make personal contact with potential partners when doing business in Indonesia.

• Handshakes are customary when meeting someone for the first time. Contrary to most Western societies, where a firm handshake is a sign of a strong character, Indonesians apply only very light pressure to a shake. Women’s hands may be shaken as well if they offer to. It is also cordial to shake the eldest person’s hand first, when meeting several people in a group.

• Negotiations can be lengthier than you may be used to from your country of origin. Multiple meetings may be necessary in order to come to a final decision or agreement. Refrain from hurrying your Indonesian business partners along, as this may be taken as an offense.

• Be sure to have your business cards printed in both English and Bahasa Indonesian (or Chinese, depending on whether or not you will be working with Chinese Indonesians).

• Keep in mind that religious Muslims pray five times a day and you should not schedule any meetings or lunch dates during these times. Prayer times are listed on the Islamic Finder and other Internet sites as well as at the local mosque.

• Avoid using red ink when writing a person’s name down. It is seen as impolite, as red was originally used to write down the names of the deceased.

Taxation

Since 1984, every person working in Indonesia is required to have a tax file number, called a NPWP. For more information concerning the processing of tax forms and income tax returns as well as to download said forms, please visit the website of the Directorate General of Taxes of the Republic of Indonesia. Indonesian resident tax payers are subject to taxes based on worldwide income, while non-residents are subject to pay based on Indonesian-wide income.

Indonesia has double-taxation treaties with 48 countries, among them the United States and the United Kingdom. Be sure to check with your future employer in Indonesia, or the local tax office in your home city, to find out whether or not your country of origin has such an agreement with Indonesia.

Social Security

Most foreign and international companies in Indonesia offer some sort of health and social security plan to their employees. As of 2004, Indonesia has been working on implementing a national social security plan specifically for its employees. Currently, all companies with more than 10 employees are required to pay social security benefits for their workers. In the event of old age, disability, work injuries and sicknesses, and maternity leave, Indonesian social insurance will generally cover the costs for local workers and employees.