3 Most Important Benefits of Using Employer of Record in Indonesia

For many businesses, the reason for expanding internationally is pretty obvious – business owners want to access a wider talent pool and customer base. However, the expansion sometimes comes with some challenges as they don’t know how to do so especially when it comes to dealing with employment tasks and legal compliance. These challenges can be easily ironed out – thanks to the existence of the Indonesian employer of record services.

The Employer of Record, or EOR, is a third-party contractor who is responsible for a company’s formal employment tasks and carries out regulatory and legal requirements of employment and payroll, immigration, and taxes.

However, an employer of record does not participate in the employee’s daily work activity. An employer of record is beneficial for companies expanding into another country or a different location and chooses not to hire and manage the employees directly.

Difference between Employer of Record (EOR) and Professional Employer Organisation (PEO)

Business owners sometimes mistake EOR with PEO or Professional Employer Organisation. But there’s a significant difference between them: the provider of EOR serves as a full legal employer for employees regarding the payroll and other employment tasks. An EOR doesn’t require foreign companies to have a legal entity in the region they expand their business to.

As for PEO providers, they are not the full legal employer and will not hold any legal liabilities as they don’t appear in an employment contract. PEO is only suitable for companies requiring third-party help on certain HR functions; whereas EOR is a total solution for businesses that would like to expand more rapidly without going through the complex steps of setting up a business structure in Indonesia.

Benefits of Partnering with an Employer of Record

1. Improving Efficiency

Starting a business in a new country means you have first had a steep learning curve especially the local laws and legislations and employment issues.

Thus, if business owners try to figure all of them out by themselves, they have to encounter constant defeats and may even bring the team spirit down.

An EOR can be a good idea for foreign investors. An Indonesian EOR provider is already competent in the country’s employment rules, they can help you streamline the entire employment process effectively. An effective employment and HR processes create happier employees.

2. Comprehensive One-Stop HR Solution

An EOR can assist your business in Indonesia with so many things, from recruiting suitable talent to designing a health insurance program, managing tax and payroll to navigating business and legal complexities.

Since EOR is the expert in payroll and tax management, they ensure that all payroll and compensation are correctly calculated and legally compliant. Furthermore, they can offer personal development opportunities and necessary training for your employees.

3. Professional Advice

As mentioned, an EOR goes beyond just handling an employee’s payroll. They can serve as your advisor and give you ideas and insights on how your business can succeed in the dynamic market.

How Cekindo Can Help

Cekindo provides a full employer of record service in Indonesia. Companies expanding into Indonesia can contract with Cekindo to make your employment in the country simple regardless of the company size.

Our employer of record service is equally effective for both foreign and local investors as we make sure full compliance with Indonesian laws and regulations.

Our specialists will take care of the tax and payroll processing, be legally responsible for the employees, comply with local regulations, and sponsor employees on work permits.

With us, you will have no risk of violating tax, labor, and employment regulations in Indonesia.

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