Regulation on Hiring Foreigners in Indonesia
The President of Indonesia, Joko Widodo, has signed Presidential Regulation No. 20/2018 on the Recruitment of Foreign Workers in Indonesia.
This regulation has become fully effective since 26 June 2018, replacing the existing Presidential Regulation No. 72/2014. The enactment of 20/2018 simplifies the foreign workers’ permit and licensing, thus ensuring a faster and more efficient process.
One significant change is the compulsory RPTKA (Foreign Worker Recruitment Plans, or Rencana Penempatan Tenaga Kerja Asing) which used to be required for the positions is now treated differently. The new regulation excludes particular positions for which there is no need to submit this recruitment plan.
This new regulation on the recruitment of foreign workers makes it much easier for expats or foreign workers (Tenaga Kerja Asing – TKA) to work in Indonesia.
However, this does not mean that foreigners are allowed to work in Indonesia freely without any legal restrictions.
Key Changes in Recruitment of Foreign Workers in Indonesia
Regulation NO. 20/2018 was implemented mainly due to the increased complaints from employers hiring foreign human resources. They requested the simplification of the application process for permits and licenses for foreigners as it was not only complicated but also time-consuming.
There are several changes employers should take note of:
1. Extension of Scope
The scope of employers of TKA in Indonesia is expanded in Regulation 20/2018 includes “other businesses”, therefore the current list of employers are as follows:
- Government and international agencies, foreign representatives
- Foreign trade offices, representative offices, foreign news agencies
- Foreign-owned private companies
- Limited-liability companies or establishments, foreign business entities under Indonesian Law
- Educational, cultural, and social organization
- Service business of promotion
- Other businesses: provided that businesses are not prohibited from hiring TKA under any current legislation
2. RPTKA Exemption
It is now possible for companies not to obtain RPTKA for the following positions:
- Board of Directors listed as shareholders
- Board of Commissioners listed as shareholders
- Diplomatic officials in foreign representative offices
- Government officials or officials required by the Government and determined by the Minister’s resolution
3. Shorter and Faster Process
The general process of securing an Indonesian work permit is written below:
- Your sponsor company receives approval of the RPTKA for its proposal from the Indonesian Ministry of Manpower.
- Your sponsor company needs to go through the Pre-RPTKA Approval/Pre-work Permit process, and be notified of the duration that you can stay and work in Indonesia
- DKP-TKA (Development Funds in Exchange of Hiring a Foreign Worker) payment of USD100/month must be paid in advance.
- With the approval of RPTKA, you can now work legally in Indonesia
- With your work permit, the immigration office in Indonesia will issue your VITAS.
- Your VITAS will automatically convert into KITAS/ITAS upon arriving in Indonesia.
4. VITAS and ITAS in One Process
In March 2021, the Indonesian Government issued The Ministry of Manpower (MOM) Regulation No. 8/2021 that revoked 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).
Regulations in Indonesia, particularly on foreign employment, change frequently, and it may be challenging to keep up with the latest updates at all times. That is why it is highly recommended to consult with a professional.
Contact Cekindo to find out how the changes will affect your recruitment operations in Indonesia.
If you need assistance in visa and permit applications, we will be happy to provide both guidance and assistance as well.
Simply fill in the form below to contact us.