- Common Misunderstandings About Indonesian Work Permits
- Requirements for Employers’ Work Permits in Indonesia
- Requirements for Foreign Employee’s Work Permits in Indonesia
- Process of Securing a Work Permit in Indonesia
- The Exemption
- The Validity of an Indonesian Work Permit
- The Obligation of Employers
- Sanctions for Not Having a Work Permit in Indonesia
- InCorp Indonesia As Your Trusted Visa Agent in Indonesia
Foreign business actors or employees who want to set Indonesia, especially Jakarta, for their next venture must enrich themselves with information about an Indonesian work permit.
However, before starting a company in Jakarta, one must understand the Immigration Law in Indonesia since it changes promptly. So as a trusted Indonesia visa agent, we advise making sure the regulations are up-to-date from time to time.
This article will provide a comprehensive overview of the work permit in Indonesia, and help companies and individuals, such as potential employees and freelancers, understand the requirements and process.
Common Misunderstandings About Indonesian Work Permits
Many confuse KITAS/ITAS (Izin Tinggal Terbatas) with Indonesian work permits. KITAS/ITAS refers to the stay permit. In contrast, the work permit is RPTKA Approval (Pengesahan Rencana Penggunaan Tenaga Kerja Asing or the Foreign Worker Utilization Plan), 一a document detailing the specific task, job titles, and the length of the employment of a foreign worker.
Work Permit vs. KITAS
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, immigration in Indonesia will issue your limited stay permit (KITAS/ITAS).
Learn more about Limited Stay Permit (KITAS/ITAS) in Indonesia
Work Permit vs. Business Visa
Many people need to learn the difference between a work permit and a business visa in Indonesia. Whether you’re an aspiring architect, attending a business conference overseas, or a company sending staff abroad for a project, knowing which of the two visas is required can be very tricky.
Two common types of visa for doing business in Indonesia are the business visa and the work permit, and the following are the fundamental differences between the two:
- A business visa is required for business tasks in Indonesia. This includes attending a seminar or a conference, unpaid training, etc. This type of visa does not allow you to work or earn money in Indonesia.
- A work permit allows you to work legally in Indonesia for a certain period.
Requirements for Employers’ Work Permits in Indonesia
According to Article 3 of MOM Regulation No. 8/2021, employers who are eligible to hire foreign workers include:
- Government agencies, international bodies, and foreign state representatives.
- Representatives for foreign trade, news agencies, and representative offices.
- Foreign private companies
- Foreign legal entities, such as limited liability companies, foundations, or other business entities, are legally registered under Indonesian law.
- Social, religious, educational, and cultural institutions.
- Entertainment management companies
- Or any other business entities that are permitted by law to hire foreign workers
Under MOM Reg. 8/2021, a self-proprietorship company, a CV, cannot employ foreign workers. To obtain RPTKA Approval, the eligible employers must submit a set of documents that contain detailed information about the employer’s identity.
Under the documents, employers must state the reasons for hiring foreign workers, the detail of the position that foreign workers will undertake within the organization structure, the number of foreign workers being employed and their contract length, and so on.
Once submitted, MOM will review all the documents, conduct a feasibility study, and issue the RPTKA Approval.
Requirements for Foreign Employee’s Work Permits in Indonesia
The MOM Regulations No.8 2021 also outlined the general requirements for foreign workers to obtain work permits in Indonesia and begin working for their business in Jakarta. According to the regulation, the requirements are as follows:
- You meet the educational background requirement and are qualified for the position.
- You have competency certificates or at least five years of work experience related to the job.
- You are willing to transfer the knowledge and skills of expertise to the local counterpart.
Certain job positions at a company in Jakarta or elsewhere in Indonesia are prohibited for foreign workers. According to the Minister of Manpower Decree No. 349/2019, foreigners are not eligible to work and obtain a work permit for the following positions:
- Personnel Director
- Industrial Relation Manager
- Human Resources Manager
- Personnel Development Supervisor
- Personnel Recruitment Supervisor
- Personnel Placement Supervisor
- Employee Career Development Supervisor
- Personnel Declare Administrator
- Personnel and Career Specialist
- Personnel Specialist
- Job Advisor
- Job Advisor and Counselor
- Employee Mediator
- Job Training Administrator
- Job Interviewer
- Job Analyst, and;
- Occupational Safety Specialist
Process of Securing a Work Permit in Indonesia
Securing a work permit in Indonesia can be tedious, and patience is the key. We will walk you through the general process as 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 you can stay and work in Indonesia.
- Employers must pay DKP-TKA (Development Funds in Exchange of Hiring a Foreign Worker) payment of USD100/month 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.
The RPTKA Approval is no longer required for foreign directors and commissioners with specific ownership of shares in the company.
The RPTKA Approval is exempted for foreigners engaged in diplomatic and consular activities, hired by a local employer for emergency activities, and vocational training for Indonesian tech-based startups.
However, it is also worth noting that this exemption for startups only lasts for three months, after which the company must apply for RPTKA Approval.
The Validity of an Indonesian Work Permit
The validity of work permits in Indonesia ranges from one month to twelve months. The validation date depends on the type of industry you are working in and the kind of sponsor company RPTKA. Different work permits are as follows.
Urgent or Emergency Work Permit
This permit is valid for one month. Urgent jobs and jobs requiring immediate action usually use this kind of permit to avoid potential detrimental consequences for the sponsoring company or society.
Temporary Work Permit
With a validity of 2 to 6 months, a temporary work permit applies to foreigners in industries such as trading, services, and consulting. It also applies to foreign workers or laborers in sectors such as the maintenance and installation of machinery.
Long-Term Work Permit
Also known as a standard work permit, it is valid for 7 to 12 months for ex-pats at higher management levels, such as managers, directors, and commissioners.
The Obligation of Employers
According to Article 44 of MOM Regulation No.8/2021, foreign workers’ employers must submit an annual report to the government that contains detailed information about foreign workers’ utilization, education, and job training for foreign workers’ assistants as well as the transfer of technology and skill to the local counterpart.
Business actors should also note that the Ministry of Manpower Regulation No. 8/2021 requires employers to facilitate foreign workers learning the Indonesian Language. Foreign workers’ employers should pay attention to this, as the regulation stipulates the specific format for this report.
Assistance from an Indonesian visa agent and legal expert, such as InCorp Indonesia (formerly Cekindo), can simplify this process and help you avoid unnecessary complications before hiring foreigners for your business in Jakarta.
Sanctions for Not Having a Work Permit in Indonesia
With the confusion between a work permit and a work visa, some foreigners or investors need to make the right call. Specifically, directors or board members of a company in Indonesia must get a work permit to stay for a significant amount of time.
Not securing your work permit intentionally or unintentionally means you are breaking the immigration law in Indonesia. Employers who fail to comply with work permit Indonesia policy are looking at IDR 36 billion fine.
Foreign workers who stay and work in Indonesia without a work permit are subject to IDR 500 billion fine and may also face five years of imprisonment, according to Indonesian immigration law.
To avoid these situations, always consult with an Indonesian visa agent for details and the latest version of the immigration law.
InCorp Indonesia As Your Trusted Visa Agent in Indonesia
Getting a work permit in Indonesia can be complicated by unforeseen issues. A team of global specialists at InCorp Indonesia (formerly Cekindo) can quickly review any situation and help make the whole process easier. Contact us today.