update on employment of foreign workers in indonesia

Latest Regulation: Employment of Foreign Workers in Indonesia

  • InCorp Editorial Team
  • 9 October 2018
  • 4 minute reading time

Indonesia is the largest captive market in South East Asia with a population of more than 255 million based on the data of the Indonesian Central Bureau of Statistics year 2015.

Interestingly, the same institution reports that the total number of the foreign visits to Indonesia, as per July 2018, reached up to 9.06 million.

It sums up that Indonesia is an attractive country for foreigners who want to both work and stay in this exotic archipelago.

As in every other country, foreign nationals must obey immigration laws and comply with the latest regulations. This article provides insight into the newest immigration regulation in Indonesia, as per September 2018, namely:

  • Presidential Regulation Number 20 Year 2018 concerning Foreign Worker (TKA), applied effectively on June 29, 2018 (“PP20”)
  • Regulation of Ministry of Manpower Number 10 Year 2018 concerning Procedure on Usage of Foreign Worker, applied effectively on July 11, 2018 (“RM10”)

Both regulations are quite complex, and thus this article summarises the most significant changes and interesting points only. For more detailed information, contact Cekindo’s consulting team.

Eligibility for a Double Position

Foreign workers (TKA – Tenang Kerja Asing) can now be employed by another employer in the same position as long as the working duration is similar to the first employment.

Based on our experience, a director or commissioner at a foreign investment company (PT PMA) has the most considerable chance to be eligible for this requirement. In general, a foreigner usually obtains a one-year visa.

Other additional requirements worth noticing is that TKA should prepare curriculum vitae and diploma or certificate of competency pertaining to the position appointed to the TKA. These documents are mandatory to be furnished to the official when applying for the job.

Expatriate Placement Plan and Compensation Fund

Employers shall not be mandated to obtain Expatriate Placement Plan (RPTKA – Rencana Penggunaan Tenaga Kerja Asing) and pay compensation fund for TKA employment. This shall apply to:

  1. Government institution;
  2. representative of a foreign country and;
  3. international body employing TKA,

TKA may be exempted from paying compensation fund to TKA social institution, religious entity and specific position in education entity. This regulation still applies per case basis since the practice is related to respective Ministries.

Length of a Work Stay Permit

A TKA will be eligible for a work stay permit (ITAS) for up to two years. It might be extended based on the applicable law.

This regulation has not been widely implemented, but it concerns positions as a shareholder and director at PT PMA Company.

Social Security Insurance for Employment of Foreign Workers in Indonesia:

A TKA working more than six months in Indonesia must register for the Social Security Insurance and/or insurance policy at an Indonesian insurance company.

In practice, TKA will have to register for insurance, whether they work more than six months or not. Cekindo recommends the mandatory social security insurance (BPJS) since the process of registration is easier.

Employment Report

Employer of a foreign worker shall submit a TKA employment report to the Ministry and Head of Immigration at the location of domicile of TKA constituting the activity of the TKA, education and training of TKA supporter.

Latest Update on Employment of Foreign Workers in Indonesia

In March 2021, the Indonesian Government issued The Ministry of Manpower (MOM) Regulation No. 8/2021 that revised MOM Regulations No. 10/2018 concerning The Employment of Foreign Workers. The recent regulation stipulates that RPTKA approval now serves as the basis for the authority to grant a limited stay visa (VITAS). Once you have received a VITAS, the immigration in Indonesia will issue your limited stay permit (KITAS/ITAS).

Comply with Employment of Foreign Workers in Indonesia

The newest immigration regulation allows a greater degree of flexibility for TKA to work in Indonesia. However, most of the practice have not been effectively implemented by the Ministry of Law and Human Rights of the Republic of Indonesia and Directorate General of Immigration of the Republic of Indonesia.

Constant coordination and supervision will be the key to ensure successful results. For this matter, Cekindo has the experience and knowledge required to assist clients to get a work stay permit (ITAS) based on the applicable law in the Republic of Indonesia.

Fill in the form below, and we will get back to you with a free quotation regarding your business and employment of foreign workers in Indonesia. You can also visit us at our offices in Semarang, Jakarta and Bali.

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

  • Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates
  • Increase the competence of the workers by giving or encouraging job training
  • Follow the procedures of termination (Terminating an employee in Indonesia can be a long, tedious, and expensive process.)
  • Observe the working hours, holidays, and overtime regulations
  • Give mandatory employee benefits including social security and health insurance
  • Withhold only the right amount of income tax on behalf of the employees
  • Follow the wages and other benefits outlined by the law
  • Process the work permits for foreign employees

Before entering into any agreement with our clients, we sign a data protection agreement to ensure that all data are kept confidential across all involved activities.

According to the Indonesia’s Manpower Law employers can hire the Indonesian talents either under a temporary or a permanent contract.

As a leading recruitment outsourcing provider in Indonesia, InCorp offers comprehensive services. We will conduct an in-depth background check on candidates to verify references and qualifications.

Cost reduction, hiring time reduction, hire quality are among the most noteworthy benefits your company can enjoy.