NASPP | Stock Plans in Indonesia

Taxation
Securities Laws
Exchange Controls
Employment Laws
Payroll Deductions
Privacy Laws
Electronic Signature
Stamp Duties

Summary Table
(Updated as of August 2023)

There is no clear legislation regarding the taxation of stock awards in Indonesia. Many companies take the position that stock options are taxable at exercise (or sale if there are no costs borne by the local employer) and restricted stock units (RSUs) at vest. However, given this uncertainty, companies should seek specific advice from their tax advisors. Employer withholding is also likely required, but again, given the lack of clarity in the law, companies should consult their own advisors.

Furthermore, depending on offering or acquisition amounts and timeframes, awards granted by a non-Indonesian company pursuant to an employee stock plan may require registration with the Indonesian securities authorities or a filing for reliance on an exemption from such registration under newly published guidance. Some practitioners take the position, though, that equity awards without a cash payment from the participant (such as RSUs) may not be subject to these requirements.