EOR vs PT PMA: Hiring in Indonesia or Owning a Company
EOR vs PT PMA: hire staff in Indonesia with no company of your own, or set up a PT PMA to own the business. MAM takes care of both, and the move between them.
- Permeninves/BKPM No. 5 Tahun 2025, in force since 2 October 2025 — Articles 26 and 27, the PT PMA investment value, paid-up capital and the 12-month commitment
- UU PPh (Income Tax Law), Article 2(3)(b) and 2(5), as amended by UU No. 6 Tahun 2023 — resident companies and the forms a permanent establishment can take
EOR vs PT PMA is a choice between having people work for you in Indonesia and owning a company here. Through an employer of record (EOR), MAM employs your team for you, so you need no Indonesian company to start. A PT PMA, a limited liability company with foreign shareholders, is the route when you want to own the operation: sign contracts, hold licences and earn revenue in Indonesia in your own name.
The two are not exclusive. Many clients start with EOR and move their team to their own PT PMA once it is set up.
How an employer of record works
MAM is the legal employer. We hold the employment agreement, run payroll with PPh 21 (the income tax withheld from employees’ pay), register your team with BPJS (Badan Penyelenggara Jaminan Sosial, the state social security bodies), and take care of onboarding and offboarding. You direct the work day to day and receive a single monthly invoice. The full scope is on the employer of record service page.
There is no minimum number of employees, and MAM employs whole teams this way as well as individuals. A local hire can usually start within a week. An expatriate takes longer, because MAM processes their work permit and KITAS before they can be onboarded. The arrangement itself ends on one month’s notice, unless agreed otherwise.
What your own PT PMA involves
A PT PMA can be up to 100% foreign-owned, depending on its KBLI classification, the government’s system of business-activity codes. It can employ, trade and invoice in its own name, and it holds its business licences directly.
Establishing one takes time and capital. Regulation 5 of 2025 of the Minister of Investment and Downstreaming (Permeninves/BKPM 5/2025) sets three figures:
- The investment plan. A PT PMA plans an investment of more than IDR 10 billion per business line per project location. That figure excludes land and buildings, except for property, accommodation and farming businesses (Article 26(2) and (5)).
- Paid-up capital. The company issues and pays up at least IDR 2.5 billion (Article 26(10)).
- Twelve months. The paid-up capital stays in the company’s account for 12 months, except to buy assets, construct buildings or fund operations (Article 27(1)).
MAM handles PT PMA setup from KBLI advice before anything is filed, through the notarial deed and the Ministry of Law approval, to the NIB (Nomor Induk Berusaha, the business identification number), the NPWP (Nomor Pokok Wajib Pajak, the tax number) and the licences your classification requires.
EOR vs PT PMA side by side
| Employer of record | Your own PT PMA | |
|---|---|---|
| Legal employer | MAM | Your PT PMA |
| Needed first | No company in Indonesia | Capital and business licences |
| What you can do | Have staff working in Indonesia | Employ, trade, invoice and hold licences |
| Employment compliance | Carried by MAM | Your company's, with MAM's help |
| MAM takes care of | Contract, payroll, PPh 21 and BPJS | Set-up and licences, then payroll |
| Moving across | Your team joins your PT PMA | Previous service is recognised |
When each route fits
The EOR vs PT PMA decision turns first on what you plan to do in Indonesia, and then on the size of your team.
EOR fits when you want someone working in Indonesia soon, when you are testing the market, or when you have a team here and no need for a company yet.
A PT PMA fits when the business itself will operate in Indonesia: contracts with Indonesian customers, revenue invoiced here, licences in your own name. As a team grows, your own company eventually becomes the more economical home for the payroll, and MAM will tell you when you are near that point. The cost of an employee calculator shows what one person costs beyond their salary, and what they take home.
Where tax presence comes in
Through EOR, the foreign client does not employ anyone in Indonesia itself. MAM is the legal employer, and we look at each client’s activities in Indonesia so the arrangement stays that way.
A PT PMA is an Indonesian resident company, taxed in its own right (Income Tax Law, Article 2(3)(b), as amended by Law No. 6 of 2023). What makes a foreign company taxable here without one is covered in permanent establishment in Indonesia.
Moving your team to your own company
When your PT PMA is ready, your team moves across from MAM to it, and because the move is planned, the new employment agreement recognises their previous service. From then on MAM can keep running their payroll. The steps are in moving from EOR to your own company.
Neither route is permanent. The choice is which one fits your plans now.