Law of IndonesiaModule 7
Business, tax and employment: company forms, foreign investment and licensing, commercial transactions, employment contracts, termination and labour disputes, and taxation
Indonesia is the largest economy in Southeast Asia and welcomes foreign investment, but it regulates it through a detailed structure. A business is normally run through a limited liability company (Perseroan Terbatas, PT), and a foreign-owned one is a PT PMA. Most sectors are open, a few are closed or conditional, and every business is registered and licensed through a national online system. Employment is protected by the Manpower Law as changed by the Job Creation Law, and terminations go through negotiation, mediation and the Industrial Relations Court. Tax is mainly income tax, value added tax and withholding taxes, administered by the Directorate General of Taxes. This module gives a working map for a foreign business person or for a lawyer who advises one.
This course explains the law of Indonesia, not US law. Rules that look the same elsewhere may be different.
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See what is included in the Courses & AI Lab Pass →General education on the law of Indonesia, using invented people and businesses. It states laws and procedures in simplified form and is not legal advice. The law and its practice change, and every case turns on its facts, the region and the authority concerned. It does not offer legal representation or a legal opinion on any case. Consult an Indonesian advocate for any real matter.
This course was written on 5 November 2026. To the best of our knowledge, it describes the law of Indonesia as it stood on that date. Laws change, and we may have missed or misunderstood something. If you notice a change, or have other information, please do not hesitate to contact us: we will review it and update the course. We do not claim to be the final source of the law.
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