FAQ: Absolute Reasons to Conduct Due Diligence in Indonesia

Making the decision to start a joint venture with a business partner or hire a new employee is never an easy task. One wrong move you and your company will face an unsavory new hire or business partner. Worse, it could crush your company’s bottom line or you will have to deal with legal disputes.

Most companies often overlook the importance of a background check and due diligence. Therefore, Cekindo has gathered the top Frequently Asked Questions (FAQs) on why you should conduct due diligence and background check in Indonesia for your company’s best interests.

What is due diligence and why is it extremely important?

Due diligence is an evaluation process of a business from all aspects before you make a purchase decision or join forces with another company. It includes research on both legal and financial aspects.

A due diligence process peels off all layers of a business to make sure nothing is hidden, thus minimising your risks as a business investor. It is not just a general evaluation. Instead, it includes certain elements that vary depending on the nature and circumstances of a business, and a thorough check on the legal history of the business.

What is personal background check in Indonesia?

A personal background check is similar to a due diligence but it applies more on a potential new hire or a new business partner.

Why should I conduct a personal background check prior to employment?

Fake degrees and fake business certificates can be easily found in Indonesia. Candidates may hide their previous histories or crimes with these forged certificates to appear more attractive to employers or business owners.  Some frauds may not be identified right away without the proper personal background check.

Conducting a pre-employment personal background check is not optional but necessary in Indonesia because of the following reasons:

  • To verify a candidate’s education and certification
  • To make sure there aren’t any criminal records
  • To check the candidate’s employment history to make sure he or she is competent for the job
  • To ensure the candidate’s identity and address are legitimate
  • To avoid the unnecessary costs of liability because of a bad hire
  • To cut down the costs of re-hiring
  • To prevent troubles coming with employee termination
  • To comply with the Indonesian Labour Law

Can I do a personal background check online or digitally?

Yes and no. A personal background check online may be possible in developed countries with advanced digital technology and ample amount of personal information available online.  You can even pay a fee in these developed countries for services to gain all the information you need online.

Unfortunately in Indonesia, this can hardly be attainable due to the lack of online personal information and digital access. Therefore, a personal background check in Indonesia is best done manually through a provider to cut down the substantial amount of time and costs involved.

Cekindo is able to assist in running a personal background check of your potential candidate without putting your business or the candidate’s identity at risk.

Are due diligence and personal background check legal?

According to the Indonesian Law, no requirements with regards to data or privacy protection are enforced on employers to acquire necessary information through due diligence and personal background check.  

However, a general legislation under the Electronic Information and Transactions of 2007 Law No 11 does exist, saying that the transmission of personal data electronically is forbidden without the person’s consent.

How can Cekindo help me?

Cekindo can provide both due diligence and personal background check services in Indonesia. These services will give you all the insider’s details of the company you want to collaborate with or the candidate you want to hire.

All due diligence and background checks come with a report and the whole process takes 6 to 12 working days.

 

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