Before we talk about Choosing the Right Partner Employer of Record (EOR) Service, it would be good if we made our perceptions the same first.
Imagine that you are the CEO Company that wants to expand further to dominate Southeast Asia and you see Indonesia as a very suitable country for business expansion.
Why is Indonesia considered suitable?
- The young population is very large.
- The digital economy is growing.
- The untapped market potential is huge.
However, you see more about the process of entering the Indonesian market. It turns out, there are several special challenges such as employment law, tax regulations, and compliance.
Plus, establishing a legal entity takes time and money. This will not only hinder your plans, it could make competitors enter before you.
How do I enter the Indonesian market more quickly and efficiently?
If you want to ensure your company gets big opportunities in Indonesia without stumbling over regulations, then the Employer of Record (EOR) can help you.
After reading this article, your plan to dominate the Indonesian market can now be realized faster than competitors without having to have problems with legal regulations.
Simply by working with an Employer of Record (EOR) service provider, you get a partner who understands the conditions in Indonesia, to ensure your expansion runs smoothly and according to the plans you have prepared.
image: Freepik
I. Before Navigating Indonesian market entry with Employer of Record (EOR)
- Definition of Employer of Record (EOR)
Employer of Record (EOR) is a service that allows you to run a business without opening a business entity first.
How to? You just cooperate with Employer of Record (EOR) Companies in Indonesia, and they will find employees who are suitable for your company, all of these employees will work for you however remain under the auspices of Employer of Record (EOR) services like Abhitech.
If you don’t understand enough about Employer of Record (EOR) service, don’t worry Abhitech has made a complete article for you to understand Employer of Record (EOR) in just 10 minutes.
- Importance of Employer of Record (EOR) in Global Expansion
What is the importance of using Employer of Record (EOR) if you want to carry out the global expansion, in the context of this article If you want to enter Indonesia?
In the Ultimate Guide Employer of Record (EOR) article in Indonesia, Abhitech has quoted from Adp.com, Velocity Global, until Forbes to be able to draw conclusions Employer of Record (EOR), can make it easier for businesses to expand to Indonesia because the process is very fast.
Very fast. Very easy.
Imagine being able to run a business without having to create one local legal company such as (PT).
You don’t have to go through the long steps of registering a business in Indonesia.
If you don’t understand what process you have to go through if you want to register a business in Indonesia, Abhitech has prepared a short read for you.
II. Understanding Employer of Record (EOR) Services in Indonesia
At the moment, do you understand what an Employer of Record (EOR) is?
If you have a heavy heart Abhitech should say “Not all Employer of Record (EOR) service providers are a good fit for you”
Several Abhitech clients have also told stories of using fake broker services but the results were not satisfactory.
That’s why it’s important to understand the list of companies that are trusted to use Employer of Record (EOR) services in Indonesia and Globally
In Indonesia, some companies provide Employer of Record (EOR) services to help international businesses who want to operate in Indonesia.
They will promise you can operate without the need to establish a legal entity here.
What services do they provide?
This Employer of Record (EOR) services cover all things human resources administration management, payroll, legal compliance, and more.
But, it’s not just Indonesian companies.
There is also international Employer of Record (EOR) services. They are an Employer of Record (EOR) company that can help business expansion globally, in various countries.
In the process, These international companies usually partner with local companies from that country.
If the local employer of record (EOR) company can only help in one country
So a global Employer of Record (EOR) company can help you expand to many countries because they will work with local Employer of Record (EOR) companies in each of those countries.
Ok, I believe you understand.
image: Freepik
List of Employer of Record (EOR) Companies
There are so many Employer of Record (EOR) companies in Indonesia and globally, that it’s impossible to cover them in just one article.
Therefore we will provide 3 Employer of Record (EOR) companies that you can find easily on the internet and have pretty good credibility.
1. Abhitech – One of the best options for Indonesia Employer of Record (EOR) Provider
When discussing Employer of Record (EOR) locally in Indonesia, Abhitech itself is actually one of these companies. Abhitech provides Employer of Record (EOR) services that focus on legal compliance and human resource management in Indonesia and has experience in dealing with multinational companies.
You can learn more about Abhitech’s Employer of Record (EOR) here.
2. Deel
Deel is one of the largest Employer of Record (EOR) service companies and can help you on a global scale. Getting 4,000+ reviews from the site Trust Pilot proves that Deel is suitable to help you on a global scale.
3. Remote
International Employer of Record (EOR) provider offering digital platforms for HR management and compliance, including in Indonesia. As one of the largest international players, they offer Employer of Record (EOR) services in Indonesia with the support of advanced technology and global reach.
Once again we say, there are many providers of Employer of Record (EOR) services and You can find other Employer of Record (EOR) service providers on the internet.
We will focus on comparing
When should you work with an Employer of Record (EOR) that operates internationally vs an Employer of Record (EOR) who has local understanding?
Comparison of International vs. International Employer of Record (EOR) Services Local
International and local Employer of Record (EOR) services have their own advantages and disadvantages, all depending on your business needs.
- International Services
- Advantage: They are more integrated with global operations, offering consistent service standards across countries, suitable for companies operating in multiple markets at once.
- Deficiencies: Costs tend to be higher, and sometimes there is a lack of in-depth understanding of local regulations and culture.
- Advantage: They are more integrated with global operations, offering consistent service standards across countries, suitable for companies operating in multiple markets at once.
- Local Services
- Advantage: Have a better understanding of local regulations, business culture, and relationships with local authorities. Usually more flexible and can be adapted to specific needs in Indonesia.
- Deficiencies: A service focus that is limited to one country, may not be suitable for companies that want to expand into many markets at the same time.
You can choose to work with the provider of Employer of Record (EOR) services internationally or locally in Indonesia.
If your operational scale, specific needs, and business budget are large enough and you want to expand massively globally, you can work with a global Employer of Record (EOR) service.
If you just want to enter Indonesia, ONLY INDONESIA, then you can work with those who really understand market conditions in Indonesia.
Please, consider the advantages and disadvantages of each before making this important decision.
For those of you who just want to expand into the Indonesian market, and work with Employer of Record (EOR) services in Indonesia, understanding employment law in Indonesia will be very important.
III. Basics of Employment Law in Indonesia
image: Freepik
Employment Contracts and Types of Work
In Indonesia, work contracts can be divided into fixed-term work contracts (PKWT) and indefinite-term work contracts (PKWTT).
What are fixed-term work contracts (PKWT) and indefinite-term work contracts (PKWTT)? fixed-term work contracts (PKWT) are used for temporary work or certain projects, while PKWTT is more suitable for long-term work.
More about Employment Contracts in Indonesia.
Employee Rights and Obligations
Employees in Indonesia have rights and obligations regulated by Labour Laws. This includes the right to decent wages, social security, and health protection, as well as the obligation to carry out work in accordance with the agreed contract. Understanding and complying with these rights and obligations is key to maintaining good working relationships and avoiding disputes.
Employment Termination Procedures
Employment termination procedures in Indonesia must be carried out carefully and in accordance with applicable regulations. This includes providing proper notice and severance pay to employees. Draft “at-will employment” does not fully apply in Indonesia, so termination of employment must have a valid reason and be carried out in accordance with established legal procedures.
By understanding the basics of employment law in Indonesia and utilizing Employer of Record (EOR) services, your business can operate more safely, efficiently, and in accordance with applicable regulations.
IV. Selecting the Right Employer of Record (EOR) Provider
If you want to use Employer of Record (EOR) services to find out the credibility of potential Employer of Record (EOR) service providers in Indonesia, you can ask about the things below:
Things to ask Prospective Employer of Record (EOR) Provider
- How does the Employer of Record (EOR) handle legal compliance in Indonesia?
Ask how they ensure that your business complies with all applicable labor regulations in Indonesia. This includes how they handle taxes, social security, and other compliance. - How flexible are the services offered?
It is important. You should know they can tailor their services to your business’s specific needs, including recruiting, payroll, and employee management. - How do they handle layoffs?
Incorrect termination procedures can result in serious legal problems. Make sure the Employer of Record (EOR) provider has procedures that are clear and comply with Indonesian law. - What is their track record in handling international business?
An Employer of Record (EOR) provider’s experience and reputation in working with international companies expanding into Indonesia is an important indicator of their ability to properly manage your business operations
Evaluating Employer of Record (EOR) Solutions
After asking key questions, the next step is to evaluate the solutions offered by potential Employer of Record (EOR) providers. Several aspects that need to be considered in this evaluation include:
- Comprehensiveness of Services
- Cost Transparency
- Industry Experience
- Support and Communication
By considering these factors and conducting a careful evaluation, you can choose the right Employer of Record (EOR) provider to support your business expansion into Indonesia safely and efficiently.
V. Conclusion
Summary of Key Benefits of Employer of Record (EOR) Services
By using Employer of Record (EOR) services you will be able to start a business without having to have a company in Indonesia, so this process will be very fast.
All your employees in Indonesia will be under the auspices of the Employer of Record (EOR) service provider
Therefore, you also have to ensure that the Employer of Record (EOR) provider has sufficient experience and a good track record. Because if they violate the rules of the labor law then the risk is to the good name of your company that has just been built.
After gathering all necessary information, conduct a thorough evaluation of potential EOR providers. Consider factors such as cost transparency, industry experience, and quality of support. Choose the provider that best suits your needs and long-term business vision.
By following these steps, you can choose the right Employer of Record (EOR) service to support the growth and success of your business in Indonesia.
If you want to learn more about Abhitech’s services regarding Employer of Record (EOR) you can read the Employer of Record (EOR) Abhitech
If you understand and want to work together, you can contact Abhitech here.
