Global Business Guide Indonesia

Indonesia
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Business Guide | Work Permits in Indonesia

Indonesia has been viewed by many expatriates as a top destination for business, work and tourism. To make the country a more attractive investment prospect, the Indonesian government have set up regulations for foreigners to live and work permanently in the country. The Ministry of Manpower’s Regulation No. 16 of 2015 regulates the provisions for Indonesian companies hiring foreign employees as a means of controlling the use of foreign workers in Indonesia.

The regulation was amended in 2015 and brings about several new changes:

  • An Indonesian company is now required to hire 1 (one) Indonesian worker for every one foreign worker;
  • Non-resident commissioners and directors are no longer required to have a work permit;
  • Foreign workers are required to pass an interview at the Ministry of Manpower;
  • Foreign workers are no longer required work permits to attend meetings and provide training in Indonesia.

Eligible Expatriates Permitted to Work in Indonesia

Regulation No. 16 of 2015 stipulates that for foreign workers to obtain work permits, they must meet the following eligibility:

  • Have the necessary educational background for the work undertaken;
  • Have the required competency with at least 5 (five) years of experience unless being hired as a Director or Commissioner;
  • Owns an Indonesian Tax Identification Card (NPWP) after 6 (six) months of work;
  • Evidence of joining the national social security programme (BPJS);
  • Must transfer knowledge to his/her Indonesian colleagues;
  • Once a foreign worker obtains an Izin Menggunakan Tenaga Kerja Asing (IMTA) then they are eligible to receive living permits.

The nature of the work that can be undertaken by expatriates in Indonesia are of the following:

  • Sustainable/Long-term work; Directors or Commissioners of a company, services, trading and consulting companies, university lecturers. This IMTA permit is available for a minimum 6 (six) months and maximum of 1 (one) year and can be renewed.
  • Temporary work; projects with a clearly defined deadline, one-time work, machinery installation. This permit is available for a minimum of 1 (one) month and maximum 6 (six) months and is not renewable.
  • Short-term/Emergency relief work; any work related to natural disaster relief and force majeures.

Work Permit Procedures in Indonesia

The procedures for obtaining a work permit in Indonesia are as follows:

  • Before receiving an IMTA permit, the employer needs to submit a Rencana Penggunaan Tenaga Kerja Asing (RPTKA plan) to the Ministry of Manpower outlining the details of the type of work the expatriate will undertake;
  • The applicant will then be interviewed by the Ministry of Manpower and tested on their competency;
  • The applicant will then pay the Skill and Development Fund fee of $1,200 USD per year; this also applies to expatriates domiciled outside of Indonesia;
  • The IMTA permit is issued.

Upon receiving an IMTA permit, foreign workers are eligible to apply for a living permit.

Different Types of Living Permits in Indonesia

Foreign workers are obligated to obtain a Kartu Izin Tinggal Terbatas (KITAS) which is a temporary residence visa. Once a KITAS is obtained, it can then be converted to a Kartu Izin Tinggal Tetap (KITAP) which is a permanent residence visa.

Obtaining a KITAS in Indonesia

A KITAS grants the holder to a limited stay permit for a maximum of 2 (two) years and can be extended, if required. There are various types of KITAS depending upon the purpose and conditions of the person in Indonesia.

  • KITAS – Work Visas

    This type of KITAS is sponsored by the company, business, religious organisation, or any other Indonesian institution. The validity of this KITAS is 1 (one) year and is extendable up to 5 (five) times.

  • KITAS — Personal Sponsors

    This KITAS is for foreign spouses joining their Indonesian spouses to live in the country.

The following documents are required in obtaining a KITAS:

  • Marriage certificate;
  • Indonesian sponsor’s ID card;
  • Applicants’ passport;
  • IMTA permit;
  • Photographs; 2 x 3 cm in size and should be taken on a red background.

Renewing a KITAS

A KITAS can be renewed for:

  • Six months;
  • One year;
  • Two years.

KITAP Visas in Indonesia

KITAS holders are eligible to apply for a KITAP visa (permanent residence) after 5 (five) years. The KITAP visa is valid for 25 years and is required to be renewed every 5 (five) years. Only a retired person does not require a KITAS to apply for a KITAP. Furthermore, KITAP holders can add their names to the Family Identity Card — an official family card registered with the Indonesian government.

The holders of a KITAS visa that are eligible for a KITAP visa are:

  • Retirees;
  • Foreign spouse of a foreigner who holds a KITAP visa;
  • Child with a foreign passport of an Indonesian parent;
  • Foreign manager/expert of a company in Indonesia.

Global Business Guide Indonesia - 2017

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Indonesia Snapshot

Capital: Jakarta
Population: 255 million (estimated, 2015)
Currency: Indonesian Rupiah
Nominal GDP: $895 billion USD (IMF, 2015)
GDP per capita: $3,415 USD at Current Prices (IMF, 2015)
GDP Growth: 4.7% (2015)
External Debt: 34.77% of GDP (BI, Q3 2015)
Ease of Doing Business: 109/189 (WB, 2015)
Corruption Index: 107/175 (TI, 2014)