An Update on Indonesian Regulation regarding Foreign Workers’ Permit and Residence Permit

As the interests of foreign investment in Indonesia have been increasing recently, foreign investors and the stakeholders within the companies certainly need to take into account the matters of the applicable laws and regulations concerning work permit and residence permit for Foregin Workers, especially Work Permit and Residence Permit for Company Organs, for Shareholders, Directors, and Commissioners. 

Indonesia has several regulations stipulating the procedures of Foreign Workers’ employment. When several positions are occupied by foreign people, then each of the Foreign Workers should obtain the required work permit and/or residence permit. The following table contains the information regarding the required residence permits and/or work permits applicable for shareholders, directors, dan commissioners.

Obtaining RPTKA’S Ratification

Every company who employs foreign workers is required to obtain RPTKA’s Ratification. RPTKA’s Ratification consists of:

1. RPTKA for contract-based workers who works less than or equal to 6 months;
2. RPTKA for contract-based workers who works more than 6 months;
3. RPTKA for foreign workers employment exempted from compensation fee/ (non – Dana Kompensasi Penggunaan TKA/ non-DKPTKA); and
4. RPTKA for Special Economic Zone (Kawasan Ekonomi Khusus/ KEK).

If companies are employing 50 (fifty) foreign workers or more, then the request for RPTKA’s Ratification shall be made only for RPTKA’s ratification of the Directors.

The followings are the procedures of the application to obtain RPTKA’s ratification:

1. Register the company/ foreign workers’ employer to make Foreign Workers’ online account;
2. Filling out the data application and uploading the required documents for RPTKA’s ratification;
3. Assessment the feasibility of the application for the RPTKA’s Ratification by government;
4. The companies or foreign workers’ employer shall fill out the Foreign Workers’ Data and uploading the Foreign Workers’ required documents to the designated system as regulated by the prevailing laws and regulations;
5. The government publishes the DKPTKA’s payment notification letter to the foreign workers’ employer;
6. The government publishes the RPTKA’s Ratification.

After the requirements submitted in the application for RPTKA’s ratification are declared complete and correct, the Ministry of Manpower will conduct a feasibility assessment and afterwards send an online notification to the company. Assessment of the eligibility of  RPTKA’s ratification is carried out face to face using an online system. Companies are required to submit Foreign Workers Candidate’s Data through the online system after the results and the feasibility assessment for the Ratification of the RPTKA are published. In this case, the candidate’s data shall at least contain the following :

1. Foreing Workers’ Identity;
2. Foreign Workers’ position; 
3. Work Location for Foreign Workers; 
4. Code determination and the Foreign Workers’ domicile;
5. Submit the following documents :
   1. Education diploma;
   2. certificate of competence or work experience;
   3. employment agreement or other agreement;
   4. Letter of appointment of foreign workers assisting workers;
   5. Letter of statement on the Foreign Workers’ guarantor;
   6. Current Account/ Savings Account owned by Foreign Workers’ or the Company (Employer). 

Obtaining Vitas and Residence Permit

The approval of the obtained RPTKA will be used as a recommendation for Foreign Workers to get a Visa and Residence Permit. The provisions regarding Vitas are regulated in Regulation of Minister of Law and Human Rights Number 16 of 2018 regarding The Procedures of Visa and Residence Permit Provision for Foreignt Workers. Vitas are submitted by the employer or Foreign Workers’ candidate through an application submitted to the Minister of Law and Human Rights or to the appointed imigration officer by filling in the data electronically through the system of TKA Online. Vitas application will be considered as temporary residence permit (ITAS).

Meanwhile, the provisions regarding the residence permit for foreign shareholders are regulated in Regulations of Investment Coordinating Board Number 4 of 2021 regarding the Rules and Procedures of the Service Provision on Risk-Based Business Licensing and Investment Facilities (Peraturan BKPM 4/2021), which mainly stipulate the following:

1. Temporary Stay/Residence Permit (ITAS), which shall be granted to foreigners as shareholders, whether serving or not serving as Directors or Commissioners in the employer’s company, in which shall fulfil the following criteria :
   1. Shareholders who serve as Directors or Commissioners of the employing company shall own the portion of shares with minimum amount of Rp 1.000.000.000,00 (one billion Rupiah) or nominal in US dollar currency which is equivalent to the that and it shall be stated in the deed of the company; or
   2. Shareholders who do not serve as Directors or Commissioners of the employing company shall own the shares portion with the minimum amount of Rp 1.125.000.000,00 (one billion one hundred and twenty five million Rupiah) or nominal in US dollar currency which is equivalent to the that and it shall be stated in the deed of the company.
2. Permanent Stay/Residence Permit, which is granted to the foreigners as shareholders, either serving or not serving as Directors or Commissioners of the company, with the following criteria :
   1. Shareholders who served as Directors or Commissioners of the company with share ownership of at least Rp 1,000,000,000.00 (one billion Rupiah) or  nominal in US dollar currency which is equivalent to the that and it shall be stated in the deed of the company; or
   2. Shareholders who don’t serve as Directors or Commissioners of the company with share ownership of at least Rp 10,000,000,000.00 (ten billion Rupiah) or nominal in US dollar currency which is equivalent to that and it shall be stated in the deed of the company.

On the other hand, people who occupy the foreign workers for the positions as management, either Directors or Commissioners, both of these positions, to work and stay in Indonesia shall obtain Work Permit (RPTKA and Notification) as well as Stay/Residence Permit.

These are the procedures of the obtainment of work permit and stay/residence permit for foreign workers:

1. Submission the RPTKA through the Ministry of Manpower, that consists of the following process until the ratification are published:
   1. Submission of Application for Ratification of RPTKA via online;
   2. Eligibility assessment through online system with face to face method;
   3. The result of the feasibility assessment are issued in no later than 2 (two) working days after the employer is deemed worthy;
   4. Online submission of the data on prospective foreign workers are consists of the following:
      1. Filling out a data application that includes:
         1. The identity of the foreign workers which consists of the name, place and date of birth, gender, latest education, marital status, nationality passport number, date issuance of passport, residential address, postal code, e-mail address, and phone number;
         2. Foreign Workers’ position and working period;
         3. Foreign Workers’ Work Location;
         4. For contract-based work, it is required to provide the insurance policy number which at least guarantees the protection for types of work accident risks;
         5. For contract-based work of more than 6 (six) months, non-DKPTKA, and KEK, it is required for the company to register the foreign worker to a guarantee program membership number employment social services at the Institution of Social Security Employment (Badan Penyelenggara Jaminan Sosial Ketenagakerjaan/ BPJSTK); and
         6. Code determination and TKA/Foregin Workers’ domicile location.
      2. Uploading the following documents:
         1. Foreign Workers’ Documents:
            1. Latest education certificate;
            2. Certificate of competence or work experience;
            3. Employment agreements or other agreements with employers of foreign workers;
            4. passport (copy in color); and
            5. 4×6 colored passport photo with a red background.
         2. Company’s/ Employer’s Documents
            1. Letter of application on RPTKA Ratification;
            2. Letter of assignment or power of attorney from the leading position in the company;
            3. Application letter to Immigration General Directors to apply for working visa;
            4. Company checking or savings account;
            5. Letter of approval of Rp 0,00 (zero Rupiah);
            6. Letter of employment for Foreign Workers’ in line with the format attached in the Regulation of Ministry of Manpower Number 8 of 2021, except for the position of the Directors and Commissioners, the position of the head of the office of the supervisory position, position of the builder or administrator or supervisor of the foundation, and temporary work; and
            7. Company’s letter of statement as guarantor of foreign workers in line with the format ttached in the Regulation of Ministry of Manpower Number 8 of 2021;
   5. Data verification of the documents of Foreign Worker’s candidate in no later than 2 (two) working days;
   6. Payment of the DKPTKA by the employer after the data and the documents from the candidates are declared complete and correct and the employer has received the DKPTKA payment billing code; and
   7. Issuance of RPTKA’s ratification bythe Ministry of Manpower.
2. The RPTKA’s ratification will be used as a recommendation for obtaining visa and residence permits for the Foreign Workers by the submission of data on prospective foreign workers through the TKA Online system. Application for a visa and residence permit through Immigration at the Representative of the Republic of Indonesia consists of these following process:

    The Obtainment of Visa:

1. Immigration officers must reverb the online notifications issued by the Ministry of Manpower to process the Visa Approval Data;
2. The company shall pays the fees for the Visa, Vitas, ITAS, Re-Entry Permit, and SIMKIM based on the email sent by the Immigration Officer;
3. After conducting background research on prospective foreign workers and/or companies, the Immigration Officer will issue a Visa Approval Letter which will be forwarded via electronic mail or an online Visa application;
4. Foreign worker candidates must appear before the representative of the Republic of Indonesia in no later than 60 (sixty) days after receiving the Visa Approval Letter by bringing their valid passport;
5. Immigration officials will conduct interviews, re-examine the list of prevention and deterrence, as well as re-check the background of prospective foreign workers and/or companies;
6. Vitas will be signed and issued by by immigration officers in no later than 2 (two) working days since the date of the receipt of the Passport of the Foreign Workers; and
7. The maximum stay given to the Foreign Workers is 30 (thirty) days. Vitas can be given after the Foreign Worker’s arrival based on the application submitted by the employer or Foreign Worker candidate to the Minister of Manpower or to the Immigration Officer through TKA’s online system.

The Obtainement of Residence Permit

Temporary Residence Permit (ITAS) is implemented at certain immigration checkpoint, where the Foreign Worker Candidate shall complete their ITAS obtainment through the following mechanism:

1. The entry sign along with a sticker form containing the Foreign Worker’s data as well as ITAS and Re-entry Permits shall be issued by the Immigration Officers, and
2. The electronic ITAS shall be issued by the Immigration Officers through biometric data collection mechanism.