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INDONESIA – New Regulation Tightens Immigration Rules

On 29 June 2015, the Minister of Manpower issued regulation number 16 of 2015 on the Procedures to Employ Expatriates, which clarifies and extends several key rules and is likely to make it tougher for employers in Indonesia to hire foreign nationals.

The new regulation is expected to be implemented in August 2015, and details may change before then.

Key Changes

Ratio of Foreign to Local Employees

The new regulation clarifies that a ratio of one foreigner to ten local employees is required, with an exemption for Director and Commissioner positions. Previously, a ratio of 1:3 or 1:5 was the (unofficial) general rule.

Additional Activities Require Work Permit

The new regulation expands the requirement to obtain an RPTKA (Rencana Penggunaan Tenaga Kerja Asing - expatriate placement plan) and IMTA (Izin Mempekerjakan Tenaga Kerja Asing - work permit) for, amongst others, the following activities:

  1. providing guidance, counseling, and training in the application of industrial and technological innovation to improve the quality and design of industrial products;
  2. the production of a commercial film;
  3. providing lectures;
  4. attending a meetings held with headquarters or representatives in Indonesia; and
  5. conducting audits, production quality control, or inspection at the company's branch in Indonesia.

The new regulation creates a new temporary RPTKA/IMTA for one or six months to cover these activities, as well as a new urgent/emergency RPTKA/IMTA to be issued in one day.

Under the old regulation, the above-mentioned activities did not require an RPTKA and IMTA. Foreign nationals were able to perform these activities in Indonesia with visa-free entry (for certain nationalities), a Visa on Arrival or a business visa.

Other Changes

  • Under the new regulation, the work permit (IMTA) must be obtained before the applicant applies for their VBS/VITAS/VTT (Temporary Stay Permit Visa) at the appropriate Indonesian consulate abroad. The VITAS then allows the applicant to enter Indonesia and apply for a KITAS (Temporary Stay Permit Card). Currently, the IMTA can only be obtained after arrival in Indonesia and the IMTA application requires a copy of the VITAS.
  • The “Recommendation of Working Visa” (TA-01) stage of the work authorisation process is being removed. This measure should speed up the process of obtaining a work permit, although implementation may cause initial delays.
  • A work permit will now be required for foreign national directors and commissioners of Indonesian companies who are not resident in Indonesia. It is unclear whether they will also be required to obtain a KITAS (Temporary Stay Permit Card).
  • An IMTA valid for two years may be issued for company directors and commissioners under the new regulations, once some administrative changes have taken effect.
  • The new regulations may require some additional documents in support of initial and renewal RPTKA applications.
  • Local insurance, tax and social security registration documents are now likely to be required for renewal RPTKA/IMTA applications.
  • Once the IMTA is issued, the new regulations require a report to be submitted to the local Manpower Office in the area where the employer is located.
  • There is no mention in the new regulation of the much-discussed requirement for a foreign national employee to be able to communicate in the Indonesian language (Bahasa Indonesia) .

Action Items

  • Consult an immigration adviser for specific advice on the type of visa and/or work permit required for the activities to be undertaken in Indonesia.
  • Stay tuned for confirmation of the actual measures implemented by the Ministry of Manpower, expected in August 2015.

This news alert was prepared using information provided by PNB Law Firm.

DISCLAIMER: The information contained in this immigration alert has been abridged from laws, court decisions, and administrative rulings and should not be construed or relied upon as legal advice. If you have specific questions regarding the applicability of this information, please contact Peregrine © 2017 Peregrine Immigration Management Ltd.