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To address industry specialization demand, the Indonesian government has issued a new regulation concerning Procedures for Employing Expatriates under the Minister of Manpower Regulation Number 10 Year 2018 (“Permenaker 10/2018”). This regulation facilitates the implementation of Presidential Regulation Number 20 Year 2018 concerning Exertion of Expatriate Employment (Penggunaan Tenaga Kerja Asing), which was issued on 26 March 2018 and took effect on 30 June 2018.
Examining the new regulation, there are some significant changes the government has mandated in terms of expatriate employment. One very critical and welcomed change is that the requirement for the Expatriate Employment Permit or Izin Mempekerjakan Tenaga Kerja Asing (IMTA) is no longer enforced. Undoubtedly, this will make it much easier for foreigners to work in Indonesia.
Under the new regulation, the procedures to employ expatriates in Indonesia are as follows:
Employers of expatriates must apply for the Expatriate Manpower Utilization Plan or Rencana Penggunaan Tenaga Kerja Asing (RPTKA);
This application is streamlined and submitted through an online system by the employers and verified by the Ministry of Manpower. The RPTKA shall consist of at least:
- The reason for employing the expatriate;
- The position of the expatriate in the company’s structural organization;
- The period of employment for the expatriate;
- The appointment of Indonesian workers as assistants for the employed expatriate.
This regulation clearly states that for each expatriate employed by a company, the company shall employ an Indonesian as the assistant of the expatriate for anticipated knowledge transference. However, in Article 4 Paragraph (5) of Permenaker 10/2018, it regulates that the requirement for an expatriate assistant is waived for expatriates who are performing urgent jobs, temporary jobs, as a member of Board of Directors, as a member of Board of Commissioners, as a member of Board of Patrons, as a member of Board of Managers, and as a member of Board of Supervisors.Moreover, expatriate employers are not obligated to have a RPTKA to employ expatriates who are:
- shareholders who are members of the Board of Directors or members of the Board of Commissioners;
- diplomatic and consular employees to representatives of foreign countries; or
- expatriate employees for work required by the government.
The expatriate employers must apply for a Notification to the General Director of Development of Employment Placement and Expansion of Employment Opportunities (“General Director”) through an online system. Then, based on provisions in Article 19 Paragraph (5), within a maximum of 2 (two) working days of the application being verified as complete, the General Director shall issue a Notification which consists of at least:
- The expatriate employer;
- The expatriate’s identity;
- The expatriate’s working location;
- The validity period of Notification;
- The billing payment code.
- After receiving the Notification, the employer must pay the Compensation Fund of Utilizing Expatriate or Dana Kompensasi Penggunaan Tenaga Kerja Asing (DKP-TKA) no later than 1 (one) working day. The amount of DKP-TKA is USD $100 (one hundred United States Dollar) per position and per month.
- After the DKP-TKA payment is made, the General Director shall submit the payment receipt proof and the Notification to the General Director of Immigration. The General Director of Immigration shall use the Notification from the General Director for Vitas issuance.
- Any foreigner who intends to work in Indonesia must have a Limited Stay Visa or Visa Tinggal Terbatas (Vitas), which is issued by an authorized officer in the Representatives of the Republic Indonesia or other institution stipulated by the Government that approves the foreigner to stay on a limited basis in the Republic of Indonesia. This shall be grounds for the issuance of the Limited Stay Permit or Izin Tinggal Terbatas (ITAS). Both the employer and the expatriate can apply for the Vitas and ITAS at the General Director of Immigration.
In addition to no longer requiring an Expatriate Employment Permit, the Indonesia Government also omits the provision regarding the ratio of expatriates to Indonesian workers within one company. Previously in Article 3 of Permenaker 16/2015, it regulated that for each expatriate employed by the company, there must be least 10 (ten) Indonesian workers employed or a 1:10 ratio. However, with the new Ministry Regulation Permenaker 10/2018, the ratio provision is omitted and it only states that for each expatriate employed, the company shall appoint an Indonesian worker as his/her assistant. With the issuance of these new regulations for expatriate employment, it clearly demonstrates that the Indonesian Government is acting with goodwill to make the procedures easier and faster than before. After all, the goal is to help Indonesian workers learn and benefit from expatriate presence in the workplace.
Jakarta, 13 August 2018
Written by Juliani Hanly, SH.