What can you be summoned for questioning by the Indonesian immigration office if you have started a company or even received an investor’s KITAS?
Let’s look at real-life case studies
1st case.The company was launched in April. In June, the director’s investor KITAS was still in the process of being formalized. Deciding that an already functioning company and KITAS in the opening stage allowed legal business in Indonesia, the director published an advertisement for the villa rental on social media from his personal account.
What’s it supposed to be?
Starting a company is only halfway to making money legally. The director of the company had to first formalize KITAS to be eligible to run the company and also hire employees. Even then, however, he cannot publish advertisements from his personal account. This should be handled by staff (e.g. marketing manager) or the publication should be made on behalf of the company.
2nd case. The company was launched in July 2023 and the director already has an investor KITAS in place. The director, also believing he could now operate, posted the publication on social media. However, such transactions are prohibited with investor KITAS.
What’s it supposed to be?
In order to legally engage in advertising, the director must make a working KITAS and register himself as an employee with the company. And to give one foreigner a work permit, a company must hire at least 5 local workers.
Thus, we conclude that a business cannot consist of only founders and still operate legally.
3rd case The company opened as early as 2022, but is still not active. It has no employees and no real office, yet it advertises to sublet real estate. Certainly an empty company with no employees will pique the interest of an immigration office, even if the lease states that the landlord has the right to sublet the facility.
What’s it supposed to be?
In order to operate in Indonesia, a company must have at least one employee. Otherwise, any processes will be seen as illegal, as the founders cannot engage in them themselves.
It’s no secret that immigration officers actively use Facebook and Instagram and closely follow any earnings-related postings. And some vigilant locals are eager to help them. So if you think your publication won’t be noticed, you’re wrong. There have been cases where people who were simply looking for roommates for a villa to share the cost of rent have been called to the immigration office for questioning.
So, to avoid ending up in an interview at the immigration office, keep in mind that company founders and directors:
You cannot start doing business as a company without a bank account, office address and employees. If you look at the new conditions of receipt, the KITAS investor, the It is mandatory to provide local employee ID for KITAS application and company account statement.
You cannot post ads from personal accounts. All advertising should be in the name of the company. Advertising and marketing should be handled by hired staff – local or foreigners with a working KITAS.
you can’t get paid, you can’t counsel clients.
You may not engage in any physical labor at the place where the company is actually doing business. That is, the café director cannot, for example, take a customer’s order or help the staff with cleaning.
A working KITAS with a work permit provides more advanced options, but it can only be issued to the founder for director and commissioner positions. In turn, the director cannot serve customers or handle advertising.
Still have more questions about the company or KITAS?
