Expatriate Work Permit and Immigration Updates 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:
(a) governmental institution, foreign country representative, and international body;
(b) foreign trading representative office, foreign company representative office, and foreign news office carrying out activity in Indonesia;
(c) foreign private company carrying out business in Indonesia;
(d) 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;
(e) social body, religious body, education body, and cultural body;
(f) entertainment management business; and
(g) any other business entities that are allowed to hire expatriate.
2. Employer’s Obligations
Every employer hiring an expatriate need to:
(a) have an expatriate utilization plan (Rencana Penggunaan Tenaga Kerja Asing, “RPTKA”) approved by the Minister of Manpower or the relevant authority;
(b) 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;
(c) process a stay permit for the expatriate;
(d) appoint an Indonesian worker accompanying the relevant expatriate for the technology or knowledge transfer purposes;
(e) conduct work training and education for the relevant Indonesian worker according to the position qualification of the relevant expatriate;
(f) return the expatriate to his origin country after his contract expires;
(g) facilitate the expatriate to get Indonesian language training and education; and
(h) 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:
(a) hire an expatriate for human resources position; and
(b) hire one expatriate for different positions in the same company.
3. Expatriate’s Obligations
Every expatriate in Indonesia needs to:
(a) have a suitable education for the job position;
(b) have the competency or working experience at least 5 (five) years in the relevant job position;
(c) 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:
(a) Personnel director
(b) Industrial relation manager
(c) Human resources manager
(d) Personnel development supervisor
(e) Personnel recruitment supervisor
(f) Personnel placement supervisor
(g) Employee career development supervisor
(h) Personnel declare administrator
(i) Personnel and careers specialist
(j) Personnel specialist
(k) Career advisor
(l) Job advisor
(m)Jobs advisor and counseling
(n) Employee mediator
(o) Job training administrator
(p) Job interviewer
(q) Job Analyst
(r) Occupational Safety Specialist
5. Process for Obtaining Work Permit and Stay Permit in Indonesia
(a) 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;
(b) The employer shall pay the DKPTKA;
(c) Once the company obtains the RPTKA approval, the expatriate is permitted to work legally in Indonesia; and
(d) 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 ApprovalExemption
The RPTKA Approval is no longer required for expatriate hired for the following conditions:
(a) 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”).
(b) 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.
(c) 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:
(a) implementation of the expatriate utilization;
(b) work education and training for the Indonesian worker accompanying the expatriate; and
(c) 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.
Advice for Employment and Immigration Law
This article was prepared and drafted by Yuliana Pertiwi Siagian, one of the partners at NP Consultant (www.np-consultant.com).
NP Consultant is an Indonesian law firm offering the highest quality standard of local law expertise. Our team consist of lawyers with excellent law academic background and international exposure working experience. Our lawyers have assisted many renowned international and local individuals and corporations.
The firm partners Yuliana and Gesiu are Indonesian lawyers assisting divorce and family law. Besides that, they also engage in wide range of legal practices, including corporate and commercial, merger and acquisition, mining, energy and natural resources, investment, immigration, due diligence and compliance, employment, dispute resolution and litigation, etc.
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