Work Permit (IMTA): This is available to expert foreign workers who have knowledge that no Indonesian national is able to contribute to the job. Processing times fluctuate dramatically due to the inconsistency of regulations and laws around the application process. The visa is initially issued for 1 year and can be renewed.
Business visa: These are issued for businesss purposes and do not allow foreigners to be employed or work in Indonesia. They may conduct negotiations, short term work assignments or training assignments. A single entry visa can be extended twice (one month per extension) after a one-month stay. Multiple entry visas can be extended four times (one month per extension) after a two-month stay.
Foreign workers are required to have the proper visas and work permits in Indonesia, as established by immigration laws. The process of obtaining the required documentation to live and work in Indonesia can be complex and long, due to new laws and regulations, lack of posted regulations, irregular application of existing regulations and other matters. Work permits must be secured for employees, and sponsored by a locally licensed and incorporated entity, which can be a problem for companies just entering the Indonesian market.
It is possible for companies that have established a local entity in Indonesia to arrange IMTA Work permits. It is highly recommended to utilise an Indonesian Immigration specialist to assist with the application and processing.
The employment of foreigners in Indonesia is regulated by the Manpower Ministry (Menteri Tenaga Kerja). Visas for foreign workers are issued by the Directorate Jenderal of Immigration, within the Ministry of Justice. Both of these government entities process various parts of the application.
In contrast to many other jurisdictions, there is no charge for immigration forms and folders. A Memorandum signed in January 2013 by the Director General of Immigration indicated that all immigration forms must be given and processed free of charge by the immigration offices.
The process, however, is known for its extreme slowness, worsened by the fact that regulations are often applied inconsistently and processing times therefore vary quite dramatically.
The steps for obtaining a work permit are described in detail below.
1. The company must ensure it complies with the conditions of the Expatriate Placement Plan
The guidelines of the Expatriate Placement Plan (Rencana Penempatan Tenaga Kerja Asing – RPTKA) set out what foreign expertise is required for the development of the country, and therefore who may be issued work permits.
National, multinational and joint venture firms are required to submit a manpower plan to the Kemenakertrans detailing their foreign labour requirements. Foreigners must receive a recommendation from the Manpower Department if the company is Indonesian, of the Investment Board Department if the employing company is a foreign company.
The following documents are required for a job position to be eligible for the RPTKA:
- A letter detailing the reasons for hiring the foreign worker and what specific position is expected to be filled
- The application form
- The company’s deed of establishment, ministerial approval and adjustments
- Evidence of the company’s paid up capital of at least IDR 1,000,000,000
- Company organisation chart
- Letter of recommendation for the relevant technical ministry, if the company is involved in education, transportation, oil & gas, or mining
- There must be one Indonesian counterpart employee per foreign worker (not applicable to directors)
- An education and training plan for the Indonesian counterpart
- The Wajib Lapor Ketenagakerjaan (WLK), an annual report stating the numbers of expats and local employees.
2. The company applies for the work permit
Company sponsorship is a requisite step for foreigners who wish to undertake work in Indonesia to obtain a work permit. Once the RPTKA has been granted by the government, the company must apply for a work permit – the Ijin Mempekerjakan Tenaga Kerja Asing (IMTA).
If the company is domestically owned, the RPTKA must be submitted to the Manpower Department. If the company is foreign owned, the RPTKA should be submitted to the Investment Coordinating Board.
Certain small Indonesian companies are prohibited from hiring expats, and “medium-sized” companies can only hire 2 foreign workers. For larger companies, there is no cap, although the 1:1 ratio must be satisfied.
The work permit cannot be issued if an Indonesian worker could fill that same position.
An IMTA can be issued for up to 12 months.
The following documents must be included:
- Proof of the foreign worker’s education which is relevant to the position they will hold
- A certificate of competence, or work experience of at least 5 years in a relevant position
- A statement from the foreign worker, agreeing to transfer their knowledge to their Indonesian counterpart
- A copy of thee employment agreement of the Indonesian colleague
- A taxpayer identification card, if the expat is working longer than 6 months
- An insurance policy issued by an insurance company incorporated in Indonesia
- A National Social Security policy, if working for longer than 6 months
- RPTKA approval
- A copy of the worker’s passport, showing that they are 25 years or older but no older than 55, for oil and gas, and 60, for teachers
- Two colour passport-sized photographs
- A letter of recommendation from a technical ministry, if applicable
3. Register for the Skill & Development Fund Fee
Companies employing foreigners are charged $100/month to offset the cost of training Indonesian workers. This is administered through the Manpower Ministry, and paid to the Skill & Development Fund Fee (Dana Pengembangan Keahlian dan Keterampilan – DPKK). This fee must be paid before a work permit can be approved.
Manpower plans can only be approved for one year. If companies decide to employ more foreign workers than stipulated in their manpower plan, they must revise the plan and wait several months for approval.
For positions other than a director, the foreign worker’s expertise must be proven, since government regulations limit the employment of foreigners in Indonesia to only “experts”, due to high unemployment of nationals.
4. Obtain residence permit
Once the RPTKA is approved, the TA01 recommendation must be applied for at the Manpower Ministry so that the foreign worker is able to obtain a temporary residence visa.