Recruitment of Foreign Workers in Indonesia

Indonesia’s growing economy has increased the demand for skilled foreign professionals. The recruitment of foreign workers plays a vital role in addressing talent gaps and driving innovation across industries.

What is A Foreign Worker?

A foreign worker in Indonesia is an individual who is not an Indonesian citizen but has obtained the necessary permits and visas to work within the country. They are typically employed by Indonesian companies or foreign-owned businesses operating in Indonesia.

How Can A Foreigner Get A Job in Indonesia?

You’ll need a valid passport and a health certificate to get a job in Indonesia. In some cases, a police clearance certificate from your home country may also be required.

Additionally, you must obtain a work visa before starting employment. You can apply for a work visa at your home country’s Indonesian embassy or consulate.

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 became effective on June 26, 2018, replacing Presidential Regulation No. 72/2014. The enactment of 20/2018 simplifies the foreign workers’ permit and licensing process, thus ensuring a faster and more efficient process.

One significant change is that the compulsory RPTKA (Foreign Worker Recruitment Plans, or Rencana Penempatan Tenaga Kerja Asing), which used to be required for 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 recruiting foreign workers makes working in Indonesia much more accessible for foreign workers (Tenaga Kerja Asing—TKA).

However, this does not mean foreigners can work in Indonesia freely without legal restrictions.

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Types of Work Permits for Foreign Workers

Foreign workers in Indonesia must hold a valid work permit. While often referred to as KITAS, this term is misleading, as KITAS is simply the document proving temporary residency in Indonesia, not the permit itself.

Work Permits for Foreign Experts

Foreign experts can be employed when no local candidates possess the required expertise. Business owners must hire at least one local employee for every foreign worker, though they may use as many locals as needed beyond this ratio. Foreign experts can only be employed after the company receives its permanent business license (IUT), so business owners should apply for this license promptly.

Business Visa

Foreigners looking to conduct business activities in Indonesia may opt for a business visa. Most nationalities can qualify for a multiple-entry visa after three visits, allowing 60-day stays per visit, valid for up to one year. However, this visa is only available to those receiving salaries from overseas entities.

Work Permits for Shareholders, Commissioners, and Directors

Work permits for individuals in senior roles, such as shareholders, commissioners, and directors, differ from standard ones. These roles are eligible for employment permits when the company is officially registered, which is particularly useful for companies not immediately hiring local directors.

Although one director must have an Indonesian tax card (NPWP), foreign directors with a valid work permit can also obtain one.

It’s important to note that in Indonesia, shareholders do not have to be commissioners or directors, allowing company owners to appoint foreign experts as directors or commissioners as soon as needed.

What Types of Foreign Workers Eligible to Work in Indonesia

On August 27, 2019, Indonesia’s Ministry of Labor issued Regulation No. 228 of 2019 to expand the range of job positions available to foreign employees.

This regulation simplifies the approval process for expatriates and consolidates the list of eligible positions, making it easier for foreign workers and employers.

Regulation 228 covers over 2,000 job titles across 18 sectors, derived from the International Standard Classification of Occupations (ISCO). These positions will be re-evaluated every two years to ensure they meet the country’s needs.

• Education
• Mining and Excavation
• Construction
• Information and Telecommunications
• Real Estate
• Manufacturing/Processing Industry
• Water and Waste Management, Recycling, Remediation
• Art and Entertainment
• Transportation and Warehousing
• Hospitality and F&B
• Agriculture, Forestry, and Fisheries
• Leasing, Manpower, Travel Agencies, and Support Services
• Financial Services and Insurance
• Health and Social Activities
• Wholesale and Retail Trade, Repair, and Maintenance of Cars and Motorcycles
• Procurement of Electricity, Gas, Geothermal, and Cool Air
• Miscellaneous Services
• Professional, Scientific, and Technical Activities

Requirements for Foreign Workers to Obtain A Work Visa

Companies must follow a multi-step process to legally employ foreign workers in Indonesia, including obtaining a work visa (KITAS/ITAS). Here’s an explanation of the process:

RPTKA (Foreign Worker Recruitment Plan)

Before hiring foreign workers, companies must obtain RPTKA (Rencana Penempatan Tenaga Kerja Asing) approval from the Ministry of Manpower. The RPTKA outlines foreign workers’ roles and confirms that no local talent is available for these positions.

However, under certain circumstances, the RPTKA may be optional for some senior roles, like directors or commissioners.

Notification

Once the RPTKA is approved, the company receives a Notification, replacing the old IMTA system. This notification is an official permit for employing foreign workers and is required to proceed with the work visa process.

VITAS (Limited Stay Visa)

The foreign worker must apply for a VITAS at an Indonesian embassy or consulate in their home country. This visa allows them to enter Indonesia for work and is the first step toward obtaining a temporary residence permit.

KITAS/ITAS (Temporary Stay Permit)

Upon entering Indonesia with the VITAS, the foreign worker must convert it to a KITAS/ITAS, which serves as their temporary stay and work permit. The KITAS allows foreign workers to reside and work in Indonesia legally.

Additional Requirements for Work Visa

• Medical Clearance: In some cases, foreign workers may need a health certificate.
• Police Clearance Certificate: A police clearance from the worker’s home country may also be required.
• Indonesian Employer Sponsorship: The foreign worker must be sponsored by a legally registered Indonesian company authorized to employ expatriates.

Business Visa

A business visa can be obtained for those conducting business without full-time employment. After three visits to Indonesia, foreign nationals from most countries can apply for a multiple-entry business visa, allowing them to stay in Indonesia for up to 60 days per visit over one year. However, this visa does not enable salaried employment within Indonesia.

Work Permits for Senior Positions

The general employment permit process is expedited for senior positions like shareholders, commissioners, or directors. These roles often don’t require the same local hiring ratio (1 local worker per foreign worker) as other positions. Such roles are prioritized, and companies can receive approval more quickly for these foreign workers.

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:

Extension of Scope

The scope of employers of TKA in Indonesia is expanded in Regulation 20/2018 to include “other businesses.” therefore, the current list of employers is 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

RPTKA Exemption

It is now possible for companies not to obtain RPTKA for the following positions:

1. Board of Directors listed as shareholders
2. Board of Commissioners listed as shareholders
3. Diplomatic officials in foreign representative offices
4. Government officials or officials required by the Government and determined by the Minister’s resolution

Shorter and Faster Process

The general process of securing an Indonesian work permit is written below:

• Your sponsor company receives approval from 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 for which 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.

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VITAS and ITAS in One Process

In March 2021, the Indonesian Government issued Ministry of Manpower (MOM) Regulation No. 8/2021, which 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,  immigration in Indonesia will issue your limited stay permit (KITAS/ITAS).

Start Recruiting Foreign Workers in Indonesia with InCorp

The Indonesian Government frequently updates regulations about foreign employment, making it challenging to stay current.

InCorp offers comprehensive guidance and assistance to help you navigate the complexities of foreign employment in Indonesia. Our services include:

• Working KITAS: We guide you through obtaining a KITAS (Limited Stay Permit) for your foreign workers.
• Business Visa: We help you acquire the appropriate business visa for your foreign employees or representatives.
• Recruitment Agency and Employer of Record: We can provide recruitment services or act as your Employer of Record, streamlining your HR processes.

Fill out the form below and find out how we can help you optimize your foreign employment strategies in Indonesia.