recruitment of foreign workers in indonesia

Recruitment of Foreign Workers in Indonesia

  • InCorp Editorial Team
  • 27 December 2023
  • 4 minute reading time

Regulation on Hiring Foreigners in Indonesia

The President of Indonesia, Joko Widodo, has signed Presidential Regulation No. 20/2018 on the Recruitment of Foreign Workers in Indonesia.

This regulation has become fully effective since 26 June 2018, replacing the existing Presidential Regulation No. 72/2014. The enactment of 20/2018 simplifies the foreign workers’ permit and licensing, thus ensuring a faster and more efficient process.

One significant change is the compulsory RPTKA (Foreign Worker Recruitment Plans, or Rencana Penempatan Tenaga Kerja Asing) which used to be required for the positions is now treated differently. The new regulation excludes particular positions for which there is no need to submit this recruitment plan.

This new regulation on the recruitment of foreign workers makes it much easier for expats or foreign workers (Tenaga Kerja Asing – TKA) to work in Indonesia.

However, this does not mean that foreigners are allowed to work in Indonesia freely without any legal restrictions.

hint idea - iconHaving a temporary stay permit (KITAS), also known as a working visa or working KITAS, is one of the necessities when working in Indonesia. Check Work Permit and KITAS in Indonesia to learn more.

 

Key Changes in Recruitment of Foreign Workers in Indonesia

Regulation NO. 20/2018 was implemented mainly due to the increased complaints from employers hiring foreign human resources. They requested the simplification of the application process for permits and licenses for foreigners as it was not only complicated but also time-consuming.

foreign recruitment in Indonesia

There are several changes employers should take note of:

1. Extension of Scope

The scope of employers of TKA in Indonesia is expanded in Regulation 20/2018 includes “other businesses”, therefore the current list of employers are as follows:

  • Government  and international agencies, foreign representatives
  • Foreign trade offices, representative offices, foreign news agencies
  • Foreign-owned private companies
  • Limited-liability companies or establishments, foreign business entities under Indonesian Law
  • Educational, cultural, and social organization
  • Service business of promotion
  • Other businesses: provided that businesses are not prohibited from hiring TKA under any current legislation

2. RPTKA Exemption

It is now possible for companies not to obtain RPTKA for the following positions:

  1. Board of Directors listed as shareholders
  2. Board of Commissioners listed as shareholders
  3. Diplomatic officials in foreign representative offices
  4. Government officials or officials required by the Government and determined by the Minister’s resolution

3. Shorter and Faster Process

The general process of securing an Indonesian work permit is written below:

  • Your sponsor company receives approval of 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 that you can stay and work in Indonesia
  • DKP-TKA (Development Funds in Exchange of Hiring a Foreign Worker) payment of USD100/month must be paid 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.

4. VITAS and ITAS in One Process

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, the immigration in Indonesia will issue your limited stay permit (KITAS/ITAS).

hint idea - iconThere are different options of stay permit in Indonesia or KITAS that you can choose based on your needs. Check the Complete Guide to Limited Stay Permit/KITAS in Indonesia to learn more.

Conclusion

Regulations in Indonesia, particularly on foreign employment, change frequently, and it may be challenging to keep up with the latest updates at all times. That is why it is highly recommended to consult with a professional.

Contact Cekindo to find out how the changes will affect your recruitment operations in Indonesia.

If you need assistance in visa and permit applications, we will be happy to provide both guidance and assistance as well.

Simply fill in the form below to contact us. 

Pandu Biasramadhan

Senior Consulting Manager at InCorp Indonesia

An expert for more than 10 years, Pandu Biasramadhan, has an extensive background in providing top-quality and comprehensive business solutions for enterprises in Indonesia and managing regional partnership channels across Southeast Asia.

Get in touch with us.

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Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

We do not promote any official government document or services of the Government of the Republic of Indonesia, including but not limited to, business identifiers, health and welfare assistance programs and benefits, unclaimed tax rebate, electronic travel visa and authorization, passports in this website.

Frequent Asked Questions

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According to the Indonesia’s Manpower Law employers can hire the Indonesian talents either under a temporary or a permanent contract.

  • Prohibit any form of discrimination and provide equal opportunity for Indonesians and expatriates
  • Increase the competence of the workers by giving or encouraging job training
  • Follow the procedures of termination (Terminating an employee in Indonesia can be a long, tedious, and expensive process.)
  • Observe the working hours, holidays, and overtime regulations
  • Give mandatory employee benefits including social security and health insurance
  • Withhold only the right amount of income tax on behalf of the employees
  • Follow the wages and other benefits outlined by the law
  • Process the work permits for foreign employees

As a leading recruitment outsourcing provider in Indonesia, InCorp offers comprehensive services. We will conduct an in-depth background check on candidates to verify references and qualifications.

Cost reduction, hiring time reduction, hire quality are among the most noteworthy benefits your company can enjoy.