Importance of Legal Advice for Indonesian Startups

Why You Should Seek Legal Advice for Indonesian Startups Now

Indonesia has been attracting investors to build their startups, especially after making its rules and regulations more business-friendly.

Before taking the plunge, however, you must seek legal advice for Indonesian startups. Do not make the mistake of creating a company without putting in mind the legal aspects of your business.

Without taking into account the legal compliance, your product or services will not be able to reach the market in the first place. In addition, you might wage a war against the Indonesian laws and find yourself battling a lawsuit for operating without proper permit and authority.

So, it is only imperative to consult with your lawyers to avoid legal repercussions and potential financial losses.

Here are the following scenarios when seeking legal advice for Indonesian startups will payoff:

 

Incorporating Your Company

You should be familiar with the different processes required in forming a startup, especially if you are a foreign investor.

As a foreign investor, you should take a look at the regulations for foreign-owned companies to ensure that you are operating with full compliance. Make sure that you have secured all necessary documents and government permits before opening for business.

Here are the basic steps to build your startup business:

1. First, you have to secure the incorporation documents and register the company name with the Ministry of Law and Human Rights. These papers should be notarized.
2. Pay for the registration fee. The receipt should be submitted to the Trade Register.
3. Apply for a business license to the appropriate authority. This should follow the registration for employment with the Ministry of Manpower.
4. Register for social security and tax identification numbers for your company. You can then open a bank account for your business.

It may take you 10 days before granting approval for the incorporation of your company.

 

Outlining Management Contract

It is only imperative to form a carefully worded contract for the management of your business, especially if you have other investors or business partners.

The rights and obligations of the members should be written concisely to avoid contractual dispute. Further, everyone must understand these contracts clearly. Your business attorney can handle this matter and even provide recommendations if needed.

 

Securing Your Trademark

To make a lasting branding, you must create your own brand name, logo and products, among others. You can protect these by securing a trademark for them.

With a trademark, you can ensure that your product or logo is legally different from all other kinds. It means that you exclusively own that branding.

It is, therefore, necessary to secure a trademark through Intellectual Property Law and with the help of your lawyers. For this agenda, go to the Directorate General of Intellectual Property of the Ministry of Human Rights as it has the authority over the said matter.

 

Employing Foreign Workers

Indonesia, like all the other countries, has governing laws on employment—and the ones for foreign employment may be more complex.

Investors should comply with the allowed ratio of foreign to local workers, minimum wages, personal income tax, and social insurance, among others.

According to the International Labor Organization, about 2,000 job titles across 18 sectors can work in Indonesia. Among these are construction, real estate, education, entertainment, farming, healthcare, mining, and financial activity and insurance.

The Indonesian government said it was eyeing to attract more foreign workers with a high level of skills and a wide scope of experience into the country.

 

Managing Finances and Fund-Raising

It is best for you to hire professional services when preparing the financial reports of your business. Legal assistance is much more needed when coming up with tax filings and other related documents.
In addition, the fundraising activities of your business should comply with the relevant laws in Indonesia. A legal advisor can make sure you are following them.

 

Legal Advice in Every Step

If it is not yet clear, you should seek legal advice for Indonesian startups at the very beginning. It can be very beneficial for the business to have a legal expert providing you with recommendations to make sure that your company will continue to grow.

 

So, before you form that Indonesia business startup, contact 3E Accounting Indonesia and we’ll give you the legal advice you need.