ARTICLE · 21 FEBRUARY 2013

Important New Rules on Outsourcing in Indonesia

Makarim & Taira S.

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Regulation No.19 covers two types of outsourcing in Indonesia: business activity outsourcing and manpower outsourcing.

IndonesiaEmployment and HR

Richard Cornwallis

On 14 November 2012, the Minister of Manpower and Transmigration of the ("MOMT") issued MOMT Regulation No. 19 of 2012 regarding Terms of Partial Assignment of Work to Third Party Companies ("Regulation No. 19") Regulation No. 19 covers two types of outsourcing:

business activity outsourcing (pemborongan pekerjaan); and
manpower outsourcing (penyediaan tenaga kerja).

Business Activity Outsourcing

Outsourced work which constitutes business activities must meet the following the criteria:

be conducted separately from the user company's core business in terms of management and activities;
be conducted under a direct or indirect order from the user company.
be categorized as business support activities (according to the flow chart issued by the relevant business sector association); and

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