EOR for Startups: Hiring Your First Team in Indonesia
EOR for startups hiring in Indonesia: put your first people in place before you incorporate, with MAM as legal employer for contracts, BPJS and payroll.
- UU No. 13 Tahun 2003 (Manpower Law), Article 42(4), as read by Constitutional Court Decision No. 168/PUU-XXI/2023 (31 October 2024) — a foreign worker may be employed only for a specific role and a specific period
- UU No. 13 Tahun 2003, Article 60(1) — probation of at most three months on an indefinite contract; Article 58(1) as amended by UU No. 6 Tahun 2023, Article 81 point 14 — a fixed-term contract may not require probation
- Permeninves/BKPM No. 5 Tahun 2025, Article 26(10) — issued and paid-up capital of at least IDR 2.5 billion for a PT PMA
Employer of record (EOR) for startups lets a founder put the first people in Indonesia before the business has an Indonesian company of its own. An employer of record employs your staff on your behalf, and MAM takes care of the contracts, payroll, social security and tax. Your startup chooses the people and directs their work.
For an early team that is usually the right order. Hire, learn whether the market works for you, and set up a company once the numbers say so.
Why EOR for startups fits the first hires
You can hire before you incorporate. A PT PMA, the foreign-investment company, needs issued and paid-up capital of at least IDR 2.5 billion under the investment ministry’s regulation, Permeninves/BKPM No. 5 of 2025, Article 26(10). Setting one up also takes time. Through EOR, your first hire can be working while that decision waits.
You can test the market first. A salesperson or two on the ground for a year shows whether Indonesia works for your product, and there is no company to close if it does not.
There is no minimum team. MAM employs one person or a team in the same way, and nothing about the arrangement changes as you add people.
MAM runs the payroll. You receive a single monthly invoice from MAM rather than building a payroll function of your own. We take care of the social security contributions and the employee’s income tax under Article 21 (PPh 21).
What MAM takes care of
Every hire follows the same sequence. The only difference between a local employee and an expatriate is the work permit.
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Tell us you want to hire
Whether the person is local or an expatriate. We then ask where they will work, the salary and the type of contract.
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Send a quotation
Based on the details you have given us. Nothing further happens until you accept it.
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Collect the employee's documents
An ID card or passport, educational certificates, and a reference letter from a previous employer where there is one.
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Process the work permit, for an expatriate
Skipped for a local hire.
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Draft the employment agreement
We draft it, you review it, and the employee signs.
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Register with BPJS and run payroll
BPJS (Badan Penyelenggara Jaminan Sosial) runs Indonesia's health and employment social security. Payroll then runs every month, for as long as the arrangement does.
For an expatriate, the permit is the longer part, so onboarding takes more than a week. MAM handles the work permit and the stay permit (KITAS) before the employee starts. KITAS is the Kartu Izin Tinggal Terbatas, the limited stay permit.
MAM is also a partner of HReasily, an HR platform available on EOR engagements. Your team can request leave, submit claims and see their payslips on a phone app, and approvals go to whoever you nominate.
The employment contract
- A local hire can be on a fixed-term or an indefinite contract. That is your choice.
- An expatriate can only be employed on a fixed-term contract, for a specific role. That is Article 42(4) of the Manpower Law, UU No. 13/2003, as the Constitutional Court read it in Decision 168/PUU-XXI/2023.
- Probation of up to three months is possible on an indefinite contract only, under Article 60(1). A fixed-term contract cannot carry one (Article 58(1), as amended by UU No. 6/2023).
- Contracts are bilingual, so the employee and your team read the same terms.
What stays with your startup
You direct the work day to day: what the person works on and who they answer to. MAM holds the employment.
Who the employer is
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.
You also decide the salary. Before you settle on one, the cost of an employee calculator shows what a given salary costs each month once the employer’s contributions are added.
Ending an employment in Indonesia follows its own rules, separate from the one month’s notice that ends your arrangement with MAM. Ask us what that would involve for a particular role before the contract is signed, and we will tell you plainly.
When to move to your own PT PMA
EOR for startups is usually a first step rather than a permanent structure. Most clients move to their own PT PMA once the team justifies it, and we will tell you when you are near that point.
When you move, your employees transfer from MAM to your new company, and the new employment agreement recognises their previous service because you and MAM plan the move and write it into the agreement. The steps are in moving from EOR to your own company.