If you are planning to expand your business in Bali, here are a few things you should know before making this move. 

Known with multiple nicknames like the Island of the Gods, the Island of a Thousand Temples, and Bali Dwipa, Bali is a top destination for tourism. 

Located in the Lesser Sunda Islands of Indonesia, Bali is loved by many for its natural beauty, activities and tropical climate. This results in a consistent flow of tourists on the island, contributing positively to the economy of this favorite location of many. As per statistics, the province welcomed 3.5 million foreign tourists (almost 22.18% more than the last year) in the first seven months of 2024. The island also set a new record for all-time high foreign tourists in a single month in August.  

This has helped Bali attract Foreign Direct Investment (FDI) amounting to US $710.2 million in the first half of 2024, representing 87% of the total FDI in 2023. The amazing surge in foreign investment is because of Bali’s potential as a growing economy. Plus, Bali has a positive image as an attractive island for long-term investments. 

What’s more, Indonesia offers more business opportunities in Bali with its low corporate tax rate. Compared to the high corporate tax rates in Europe and the US, which can reach up to 40%, Bali provides lower tax rates (11% to 22%) for businesses, allowing new companies to grow. 

As a result, investors focus on their business ideas while enjoying several tax incentives in Bali. These advantages include tax allowances, tax holidays, and import duty exemptions for eligible foreign investors. 

The government of Bali, Indonesia, has also adopted a pro-business stance with policies like 100% foreign ownership and simplified licensing, making Bali’s regulatory landscape more predictable and transparent.

In addition, Bali excels because of its young population and skilled workers. The median age in Bali, Indonesia, is just around 30 years old, which is a lot lower than the median age in Europe, the US, China, and most of the East Asian countries. This makes Bali a lucrative option for ventures looking for younger skilled labor. 

Bali is a great place to expand your business and get global. However, finding the right workforce and managing it properly, as per the local labor laws, may be difficult without having a PEO by your side. 

But how can a PEO in Bali support your expansion on the island and make the process less overwhelming? Read to get your answer! 

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What is a PEO in Bali?

A PEO, or professional employer organization, is a company that offers you multiple human resources functions while you build a business in Bali. The PEO is responsible for complying with employment law, processing payroll,  and managing employee benefits administration. A PEO facilitates entrepreneurs, small businesses, SMEs, and startup companies with its services. 

When you partner with a PEO, you not only streamline your processes but also get an opportunity to expand your business in the most cost-effective way.

Imagine you wish to set up your business in Bali because of its growing economy. However, since you are unaware of the market, you are unsure about where to hire the best people or how to follow the local labor laws. This is a common scenario most businesses that expand internationally face and end up paying hefty fines. 

However, with the help of a PEO, you can overcome this challenge any day. Here is what a PEO does for your business. 

  • Employee Onboarding: The company curates a well-structured onboarding program for new employees recruited for your company in Bali. This makes it easy for employees to follow the norms of your company and get paid according to their posts. 
  • Payroll Processing: A PEO is responsible for calculating the salaries of employees according to Bali’s or Indonesia’s labor laws. The company ensures that the correct amount of tax is withheld and makes correct contributions for employee benefits. 
  • Compliance Management: PEOs help make your company’s compliance with local labor and employment laws as smooth as possible. It also keeps your company updated on all relevant changes in the law to keep you compliant. Additionally, a PEO is responsible for keeping proper documentation of employees, such as work permits and visas, to save you the hassle. 
  • Fast Market Entry: A PEO makes your market entry as easy as possible.  Bali already has many startups or SMEs that may be the same as yours, adding competition for you. Plus, the locals may find it hard to accept a foreign venture on their land. However, a PEO works remarkably to help you make a mark by giving you a local team of skilled labor. 

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Who Can Benefit From a PEO in Bali?

The great thing about a PEO is that it serves many types of businesses.  So, whether you are a startup or a well-established enterprise, a PEO in Bali can help you enter and win the target market. 

  • Small and Medium Enterprises (SMEs): SMEs usually have limited resources and knowledge. These attributes make it hard for them to expand. However, with the help of a PEO, it becomes easy to manage the HR functions efficiently. This helps reduce the work burden on SMEs.   
  • Startups: New companies or small ventures that wish to expand into a new region may face multiple challenges in this mission. The unfamiliar laws of Bali may make it tough for these startups to set up and grow. However, with the help of PEOs, these companies can get a pre-made structure for employee management and compliance. This may save them from the hassle of setting up a separate in-house HR department.
  • International Companies: One of the biggest challenges for new foreign companies in Bali is their lack of local expertise or knowledge of where to find a workforce. It is common for the companies to get overwhelmed. However, with a PEO as your HR partner, you can learn important rules of local employment laws and tax regulations, making compliance seamless. 
  • Remote Businesses: Remote businesses that wish to widen their talent pool can also get help from a PEO. This company helps you find the right individuals for your business. In most cases, the PEOs also train the new employees and ensure to handle their concerns professionally. 

Is a PEO the Same as an EOR in Bali?

Although an EOR or Employer of Record offers similar human resource services to a PEO, they are different companies with varying motives. 

Both company models help you navigate the challenges relevant to international employment. 

However, they have a few differences. 

For instance, a PEO works in a co-employment model. It is also known as a “global payroll” and allows you to have equal ownership of the employees hired in Bali. 

When you partner with a PEO provider, you get a chance to lower your HR overheads and improve your employee experience. This is all achieved while maintaining your control of organizational decision-making. This means that you remain responsible for managing your workforce’s daily roles and responsibilities.

On the other hand, when you take the services of an EOR, the latter becomes a legal employer of your workforce. There isn’t any co-employment relationship here.  This makes the EOR responsible for complying with local employment laws that may be relevant to things like onboarding, payroll, benefits, and more. 

This saves you the hassle of spending extra time and resources understanding the complex labor laws of Bali, Indonesia.

What Does a PEO in Bali Do?

A PEO in Bali is responsible for the following tasks. 

Recruitment and Onboarding of Workforce

Bali is a small island but has a population of more than 4.4 million people. That’s because the island has a low cost of living, persuading people to make it their home.  

However, finding the right workforce from a large pool of talent can be risky until you partner with a PEO. A PEO is responsible for conducting thorough interviews and screenings on your behalf to find you a perfect team in Bali. The company makes hiring quite seamless and quick.

Recruitment and Onboarding of Workforce

A PEO is responsible for establishing a proper onboarding program to welcome competent employees to your team in Bali.  The company also excels at curating employee handbooks with all the company policies so that the new workforce follows the rules easily. 

Every employee hired should sign an employment contract in Bali. These are written contracts that PEOs should create. A PEO is also responsible to keep a copy of these contracts safe after being signed by both parties.  

A written contract can be fixed or part-time, depending on the job position. It usually contains the following components: 

  • Employer’s name, address, and business nature
  • Worker’s name, sex, age, and home address
  • Occupation and type of work
  • Wage and method of payment
  • Duty stations or worksites
  • Commencement day of work
  • Rights and obligations of the worker 
  • Rights of the Employer
  • Signatures of both parties
  • Place and date of the work agreement

Benefits and Rights of Employees

Employees in Bali are entitled to a variety of rights and benefits, including overtime pay, paid leaves, and health insurance. The Manpower Law Indonesia, also known as Law No. 13 of 2003, is a comprehensive guide that is useful for governing different sectors of employment.

Working Week, Holidays and Overtime

The standard working week in Bali is 40 hours long. Employees who work more than this duration are entitled to receive overtime pay for additional hours. 

According to the labor law, overtime work is compensated at an increased rate, normally 1.5 times the regular hourly wage for the first hour and at a double rate for hours after that. 

According to the law, every employee gets a minimum of 12 days of paid annual leave after they complete one year of service with the same employer.

Additionally, all female workers get a maximum of three months of maternity leave, according to the Bali, Indonesian employment law.

Minimum Wage Rate

As of 2024, the minimum wage in Bali, Indonesia, is 2,813,672 Indonesian rupiah (IDR) per month. According to the data available, this is a 3.68% increase from the 2023 minimum wage.

Learn more

Social Security 

The social security rate for employees in Bali is 4% of their salary. On the other hand, the rate for employers is between 10.24% and 11.74% of employee salaries. 

The amount collected for a social security system in Bali covers multiple things: 

  • Work accident protection
  • Death insurance
  • Old age savings
  • Healthcare
  • Pension

Taxes 

The tax rates in Bali, Indonesia, are between 5% to 35%. This depends on the taxpayer’s income bracket in the following way. 

  • Up to IDR 60 million: 5%
  • IDR 60 million – 250 million: 15%
  • IDR 250 million – 500 million: 25%
  • IDR 500 million – 5 billion: 30%
  • Above IDR 5 billion: 35%

A PEO makes sure to account for the wages of employees with respect to Bali’s social security and tax laws to ensure complete compliance of your company. 

How to Choose the Best PEO in Bali

Investors from around the globe invest in Bali due to its attractive and thriving economy. This is why multiple PEOs operate in the province to make businesses flourish. 

If you are in search of a reliable PEO in Bali, you must make sure to consider a few factors before signing a contract with one. 

Experience

Ensure that you partner with a PEO with extensive experience in hiring and managing employees relevant to your business. For instance, if you run a real estate agency, you must look for a PEO who has already worked with multiple companies similar to yours. This makes it easy to find a relevant workforce for you. 

Services

Some PEOs are bigger than others. That’s why they offer more services over the basic ones. For example, some PEOs also provide additional training services to workers. If your company demands extra services, make sure to explore the relevant options available. 

Pricing

PEOs in Bali charge differently based on the costing methods they use. Some charge a fixed price, while others accept payments based on the number of employees hired. Make sure that the PEO you choose uses a costing method that meets the limitations of your budget. 

Tools Used

Look for PEO platforms that use employee self-service portals and real-time reporting tools. The service technology they utilize should be easy to use and integrate with your existing systems. Technology makes even the most complicated tasks simple, increasing productivity for your business. 

Global Reputation

Partner with a PEO with a solid reputation. It should be reliable and must offer customer support as required. You can read online client reviews and testimonials to shortlist the PEOs that meet this criterion. 

Explore Business Opportunities With the Best PEO in Bali Today

Bali is a beautiful and welcoming island with a lot to offer to businesses who wish to go global in Indonesia. If you run a similar venture, don’t look further and partner with a reliable PEO in Bali. 

Can’t find one yourself? Simply, get in touch with our team today. We at Remote People run a successful PEO broker service to help you get the best recommendations for PEOs in Bali.

We offer this at a cost up to 40% lower than going directly with the PEO provider. You can trust us to suggest the most professional and affordable PEOs for your services. Contact Now!

Frequently Asked Questions

Whether you are a startup or an established SME, you can partner with a PEO in Bali to handle your HR functions in the region. The company is responsible for looking after all the human resource matters and compliance so you can work towards the ultimate goal. 

PEOs in Bali don't earn a similar amount. Different PEOs offer varying services and have variable expertise. They also use different pricing models. That’s why they charge according to their experience, services offered, and employees hired.

If you want to opt for a co-employment partnership, go for a PEO.  However, choose an EOR if you want the company to have legal control over employees hired for your company in Bali.