Indonesia

Any expats want to work in Indonesia needs to have a work permit and a stay permit. This article will cover anything that you need to know regarding expatriate work permit and stay permit in Indonesia.

Any expats want to work in Indonesia needs to have a work permit and a stay permit. This article will cover anything that you need to know regarding expatriate work permit and stay permit in Indonesia.

New regulations regarding expatriate work permit have been issued, namely: Indonesian Government Regulation Number 34 of 2021 on the Expatriate Utilization (“GR 34/2021”) and Indonesian Manpower Minister Regulation Number 8 of 2021 on the Implementing Regulation of GR 34/2021 (“MMR 8/2021”). We will explain the important points regulated in GR 34/2021 and MMR 8/2021.

1. Types of employers that are permitted to hire expats in Indonesia

MMR 8/2021 regulates types of employers who are eligible to hire expats in Indonesia, as follows:

  1. governmental institution, foreign country representative, and international body
  2. foreign trading representative office, foreign company representative office, and foreign news office carrying out activity in Indonesia
  3. foreign private company carrying out business in Indonesia
  4. legal entity in the form of a limited liability company or a foundation established under Indonesian laws or foreign business entity as regulated under Indonesian laws
  5. social body, religious body, education body, and cultural body
  6. entertainment management business
  7. any other business entities that are allowed to hire expatriate

2. Employer’s Obligations

Every employer hiring an expatriate need to:

  1. have an expatriate utilization plan (Rencana Penggunaan Tenaga Kerja Asing, “RPTKA”) approved by the Minister of Manpower or the relevant authority
  2. pay expatriate utilization compensation fund (Dana Kompensasi Penggunaan Tenaga Kerja Asing, “DKPTKA”) in the amount of US$100/position/month/person in accordance with the expatriate’s working period in Indonesia
  3. process a stay permit for the expatriate
  4. appoint an Indonesian worker accompanying the relevant expatriate for the technology or knowledge transfer purposes
  5. conduct work training and education for the relevant Indonesian worker according to the position qualification of the relevant expatriate
  6. return the expatriate to his origin country after his contract expires
  7. facilitate the expatriate to get Indonesian language training and education
  8. register the expatriate in the national social security program (Badan Penyelenggaran Jaminan Sosial, “BPJS”) for expatriate working more than 6 (six) months or register the expatriate in a work accident insurance program with an insurance company for expatriate working less than 6 (six) months

Please note that requirement for paying DKPTKA as required in paragraph 2(b) abovementioned is not applicable for governmental institution, foreign country representative, international organization, social institution, religious institution, and certain position in education institution.

Please note the requirement for facilitating Indonesian language training and education stated in paragraph 2(g) are not obliged for expatriate hired as director, commissioner, representative office head, temporary position, or foundation’s manager, elder member, or supervisor.

The employer is also prohibited to:

  1. hire an expatriate for human resources position
  2. hire one expatriate for different positions in the same company

3. Expatriate’s Obligations

Every expatriate in Indonesia needs to:

  1. have a suitable education for the job position
  2. have the competency or working experience at least 5 (five) years in the relevant job position
  3. transfer his/her knowledge to an Indonesian worker accompanying him/her

4. Certain positions that are prohibited to be filled in by expats in Indonesia

As regulated under Minister of Manpower Regulation Number 349 of 2019, there are certain positions that cannot be filled in by foreign workers in Indonesia (positions dealing with human resources), as follows:

  1. Personnel director
  2. Industrial relation manager
  3. Human resources manager
  4. Personnel development supervisor
  5. Personnel recruitment supervisor
  6. Personnel placement supervisor
  7. Employee career development supervisor
  8. Personnel declare administrator
  9. Personnel and careers specialist
  10. Personnel specialist
  11. Career advisor
  12. Job advisor
  13. Jobs advisor and counseling
  14. Employee mediator
  15. Job training administrator
  16. Job interviewer
  17. Job Analyst
  18. Occupational Safety Specialist

5. Process for Obtaining Work Permit and Stay Permit in Indonesia

  1. The employer shall submit application documents required to obtain a RPTKA, among others, application letter, the employer’s business license, articles of association and its legalization decree, draft of employment agreement, the expatriate’s data, and mandatory manpower report
  2. The employer shall pay the DKPTKA
  3. Once the company obtains the RPTKA approval, the expatriate is permitted to work legally in Indonesia
  4. Further, the immigration office shall issue the stay permit that enables the expatriate to live and work in Indonesia.

6. RPTKA Approval Validity Period

The RPTKA Approval may be granted for a minimum of 1 (one) month working period and a maximum of 2 (two) years working period and may be extended.

7. RPTKA Approval Exemption

The RPTKA Approval is no longer required for expatriate hired for the following conditions:

  1. The expatriate is hired as director or commissioner with certain shares ownership, or shareholder. These positions shall obtain visa and stay permit recommendations from Indonesian Investment Coordinating Board (Badan Koordinasi Penanaman Modal, “BKPM”).
  2. The expatriate is hired as a diplomatic or consular officer in the foreign country representative office. This position will obtain visa and stay permit from the Ministry of Foreign Affairs.
  3. The expatriate is hired by an employer whose business stopped because of force majeure, vocation, technology-based startup, business visit, and research for certain period of time. For technology-based startup and vocation, the RPTKA approval is not required for an expatriate working for a maximum of 3 (three) months. Above 3 (three) months, the RPTKA approval shall be required.

8. Reporting Obligations

The employer hiring an expatriate is required to report at least once every year to the Minister of Manpower through the Director General regarding:

  1. implementation of the expatriate utilization
  2. work education and training for the Indonesian worker accompanying the expatriate
  3. technology and knowledge transfer to the Indonesian worker

9. Sanctions for not complying

Any employer violating provisions pertaining to expatriates shall be subject to administrative sanctions, namely: fines starting from IDR6,000,000 (six million Rupiah) until a maximum of IDR36,000,000 (thirty-six million Rupiah), suspension of RPTKA approval application, and/or RPTKA approval revocation.

Further, for an expat who fails to comply with Indonesian work permit regulations shall be subject to ID500,000,000 (five hundred million Rupiah) fine and a maximum of 5 (five) years imprisonment.


 

For advice on employment law and immigration law matters in Indonesia, kindly contact:

Yuliana Pertiwi Siagian

Yuliana Pertiwi Siagian

+62811 – 8013 – 088
yuliana@np-consultant.com

Gesiu Nicholas Manurung

Gesiu Nicholas Manurung

+62813 – 1143 – 9048
gesiu@np-consultant.com

NP Consultant Indonesia

NP Consultant Indonesia

18 Office Park, 25th Floor, Suite A 2, Jl. TB Simatupang Kav. 18
South Jakarta, DKI Jakarta 12520, Indonesia
Office Phone: +6221 – 2780 – 6577

np-consultant.com

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