Compliance Checklist for Early-Stage Teams in Indonesia (The “Stay Out of Trouble” Guide)

You’ve got your PMA. You’ve got your Investor KITAS. Congratulations! You are officially an Indonesian business owner. But here’s the reality check: The fun part is over.

The most common reason successful startups fail in Indonesia isnt a bad market or a weak product; its compliance failure. Missing deadlines, ignoring reports, or simply not knowing the rules can lead to massive fines, freezing of bank accounts, and worst of all, the revocation of your business license (NIB).

For Gen-Z founders, think of compliance as the non-negotiable SLA (Service Level Agreement) you have with the Indonesian government. For Boomers, it’s the foundation of legal security that protects your investment.

Here is your essential checklist for early-stage teams to stay legit, minimize risk, and focus on growth.

---

1. Corporate Compliance (The Legal Backbone)​

This ensures your PT PMA remains active and legally recognized by the Ministry of Law and Human Rights ($Kemenkumham$) and the Investment Board ($BKPM$).

A. Investment Activity Report ($LKPM$)​

• What is it? A mandatory quarterly report detailing your actual investment realization (how much money you spent from your promised IDR 10 Billion investment plan).

• Deadline: Quarterly (e.g., Q1 is reported by April 10th).

• Action Item: Log in to the OSS RBA system and fill out the form. Even if you spent $0$, you must report $0$.

• The Penalty: Missing three consecutive LKPM reports is the fastest way for $BKPM$ to revoke your $NIB$. This is non-negotiable.

B. General Meeting of Shareholders ($RUPS$)​

• What is it? An annual meeting (or resolution) with all shareholders to approve the company’s financial report, elect directors, and determine dividend payouts.

• Deadline: Within six months of the financial year-end (usually June 30th).

• Action Item: Have your accountant draft the Annual RUPS report and minutes. This must be formally documented and signed by all shareholders.

C. Company Domicile and Permits​

• Action Item 1: Business Identification Number ($NIB$) Review: Ensure the $NIB$ is up-to-date with the correct KBLI codes reflecting your current business activities.

• Action Item 2: Physical Domicile: If you move your office, you must update the location in the OSS system and with your Notary. Remember, Bali’s zoning ($ITR$) is strict—your business address must match the zoning rules for your KBLI.

---

2. Tax Compliance (The Monthly Financial Ritual)​

Indonesia’s tax system requires meticulous monthly reporting ($PajakBulanan$) and annual final reporting ($PajakTahunan$). Do not use the excuse, “I haven’t made any money yet.” Reporting is mandatory regardless of profit.

A. Monthly Tax Reporting (SPT Masa)​

Your accountant must file these reports every month:

• Action Item: Ensure all transactions are categorized correctly to avoid under-reporting WHT, which leads to fines and an investigation.

B. Annual Corporate Tax Return (SPT Tahunan)​

• Deadline: Submitted by April 30th of the following year.

• Action Item: Your accountant uses your fully audited financial statements to calculate the company’s final tax liability. This is the most crucial report.

The Compliance Killer: Tax fines and interest (surcharges) are brutal. Late filing of $PPh$ reports, even if the balance due is $0$, can result in fines starting from IDR 100,000 to IDR 1,000,000 per report.

---

3. Human Resources & Labor Compliance (The Team Vibe)​

Protect your team and yourself by following mandatory labor and social security laws.

A. Employee Sponsorship and Tax Status​

• Foreign Directors: Ensure their Investor KITAS is valid. If it expires, they cannot sign contracts or operate the business.

• Local Employees: Every local employee must have a signed, documented Employment Contract ($PKWT$ or $PKWTT$) and their income must be reported under $PPh$ 21.

B. Mandatory Social Security ($BPJS$)​

This is not optional. Every team member (local and foreign, including directors) must be enrolled in two government programs:

1. BPJS Ketenagakerjaan (Manpower Social Security): Covers work accident insurance ($JKK$) and pension ($JHT/JP$).

2. BPJS Kesehatan (Health Social Security): Mandatory national health insurance.

• Action Item: Register your company with $BPJS$ and remit the monthly contributions (shared between the employer and employee). Penalties for non-compliance are severe and include blocking of public services.

C. Payroll & Minimum Wage​

• Minimum Wage ($UMK$): You must pay your Indonesian employees at least the regional minimum wage (which varies by location, e.g., the minimum wage in Denpasar is higher than in some rural areas).

• Action Item: Ensure your payroll adheres to all local rules and that the correct $PPh$ 21 (employee income tax) is deducted and reported monthly.

---

4. Financial & Administrative Compliance (The Paper Trail)​

Keeping clean records is essential not just for the government, but for your own sanity.

A. Bank Accounts​

• Requirement: Your PMA must operate via its own corporate bank account. You cannot use your personal account to pay for operational expenses or receive revenue.

• Action Item: All financial transactions (paid-up capital injection, revenue, salaries) must flow through the company’s bank account.

B. Accounting and Bookkeeping​

• Requirement: Maintain clear, organized records following $SAK$ (Standard Akuntansi Keuangan).

• Audit Readiness: Once your revenue or total assets cross a certain threshold, the government may require a formal Audit by an external Public Accountant. Stay organized from Day 1 to avoid a costly cleanup later.

Gen Z Reminder: Keep digital copies of everything, but remember, Indonesian compliance often relies on wet signatures and stamped hard copies for official submission. Keep your documents tidy!

---

The Final Takeaway: Hire Smart, Not Cheap

Your compliance team is just as important as your marketing team. Don’t rely on one “visa agent” who handles everything from your tax to your $BPJS$ to your villa lease.

Staying compliant isn’t sexy, but it is the ticket to long-term survival and freedom in Indonesia. Focus on building your business; let the experts handle the paperwork.

Would you like me to…

Summarize the current minimum wage ($UMK$) for Denpasar and Badung (the two main business centers in Bali) for 2025, or perhaps create a specific guide on navigating the $BPJS$ registration process?