Important Note on the Terms of Use of Foreign Workers for Start-ups According To the Job Creation Law

Important Note on the Terms of Use of Foreign Workers for Start-ups According To the Job Creation Law

Although the responsibility of digital start-up companies regarding the terms of use of expatriate is not directly mentioned, the Job Creation Law outlines several things that should be fulfilled by the digital Start-ups if they want to bring in Foreign Workers.

Since the beginning of the drafting and discussion of Law Number 11 of 2020 concerning Job Creation (Job Creation Law), it has become a hot topic in society. One of which is related to the use of Foreign Workers (TKA) in Indonesia. In the Considering section of the Job Creation Law, the government expected wider job opportunities for Indonesian workers.

To support this, one of the main goals of the Job Creation Law is to improve the investment ecosystem as well as the convenience, protection, and empowerment of cooperatives and micro, small, and medium-sized businesses.

In order to achieve this goal, there are several provisions arranged in the Job Creation Law that are connected to the easiness of investment, one of which is related to the use of TKA for technology-based Start-ups. In this article, we will discuss further the terms of use of TKA by Start-ups and things that must be fulfilled by Start-ups if they want to bring in TKA.

Foreign Worker Employment Plan (RPTKA)

In Chapter IV of Manpower Section, Article 42 paragraph (1), it is mentioned that every employers who employ foreign workers is obligated to have Foreign Worker Employment Plan (RPTKA) that has been legalized by central government. As for the central government mentioned is the Ministry of Manpower.

However, in Article 42 paragraph (3) letter c, the use of RPTKA is exempted from the type of production activity that has been stopped due to emergencies, vocations, technology-based start-ups, business trips, and research for a certain period of time. Before the Job Creation Law is established, all the businessmen, without exception, is obligated to have RPTKA when they want to bring in TKA. Nonetheless, the exceptions in the Job Creation Law turn the Start-ups who want to bring in TKA are not required to have and arrange the RPTKA first.

The Job Creation Law does not mention and regulate further what is meant by technology-based Start-ups. However, if indeed what is emphasized is the technology-based, then Electronic System Provider (PSE) is suitable to define the technology-based Start-ups mentioned. According to Article 1 Number 4 Government Regulation Number 71 of 2009 concerning Electronic System and Transaction Provider (PP 71/2019), PSE is any person, state official, business entity, and community who provides, manages and/or operates electronic system individually or jointly to electronic system users for their own needs and/or the needs of the other parties.

Therefore, it is important for the Start-ups owners to know if they plan to bring in TKA without requiring RPTKA obligations, they should ensure that they meet the criteria as the technology-based Start-ups.

Companion Worker

The provisions regarding the use of Co-Worker in the Job Creation Law is regulated in Article 45 paragraph (1) letter a. It is mentioned that foreign workers employers are obligated to appoint domestic Indonesian workers as a co-worker of the TKA to conduct technology and expertise transfers from TKA.

Currently the implementing regulations regarding the mandatory use of Companion Worker is regulated under President Regulation Number 20 of 2018 on Foreign Workers Use (Perpres 20/2018). Where in Article 7 paragraph (2), it is stated that RPTKA contains at least:

Reasons for using TKA;

Positions of TKA in the organizational structure of the company involved;

Period of use of TKA; and

The appointment of domestic Indonesian workers to assist the employed TKA.

Given that the technology-based Start-ups in Job Creation Law does not require RPTKA in bringing in TKA, technology-based Start-ups also do not have the obligation to appoint or use companion workers and carry out the technology transfer from TKA to Indonesian workers.

Types of Immigration Entry Permit That Can Be Used

Given that Start-ups that will bring in TKA do not need RPTKA, the process then becomes shorter and goes straight to the stage of applying for an Immigration Entry Permit. The Entry Permit that can be used by TKA with technology-based Start-up sponsors are Temporary Stay Permits (ITAS) and Multiple Journey Visit Visa.

However, because there has not been any implementing regulations regarding the use of TKA upon the promulgation of the Job Creation Law, the use of Entry Permit for TKA with technology-based Start-up sponsors currently still follows the latest regulation of TKA Employment. The Job Creation Law requires the enactment of Implementing Regulation a maximum of 3 months after the Job Creation Law is applied.

Conclusion

The terms of use of TKA for technology-based Start-ups are made easier in the Job Creation Law because the employers do not need RPTKA and Companion Workers. However, the technology-based Start-up businessmen must ensure that their business activities meet the criteria as a technology-based Start-up when bringing in TKA.

BPLawyers can help you by providing assistance and advice for arranging a Foreign Worker Permit in Indonesia. Please contact us via ask@bplawyers.co.id or 0821123412135.