Indonesia: Foreign manpower regulations

Author: | Published: 24 Aug 2015
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Ali Budiardjo Nugroho Reksodiputro

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Graha Niaga, 24th Floor Jl. Jend. Sudirman Kav. 58 Jakarta 12190

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+62 21 250 5125/5136

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+62 21 250 5001/5121 Visit Website
Oene Marseille Emir Nurmansyah
On June 29 2015, the Minister of Manpower of the Republic of Indonesia issued a new regulation on the procedures of employing foreign manpower.

This new regulation requires that Indonesian companies hire at least 10 local employees for each foreign worker they employ.

The requirement does not apply to members of the board of directors or the board of commissioners of the company. Similarly, with regard to Indonesian foundations, no additional local employees need to be hired for foreign trustees (pembina), managers (pengurus), or supervisors (pengawas).

However, Indonesian companies with foreign directors or commissioners are obliged to file for a foreign manpower utilisation plan (rencana penggunaan tenaga kerja asing: RPTKA) and a permit to employ foreign manpower (Izin Mempekerjakan Tenaga Kerja Asing: IMTA). Similarly, foundations employing foreign pembina, pengurus, or pengawas are required to obtain both an RPTKA and IMTA. This obligation is imposed even if the directors, commissioners, pembina, pengurus, or pengawas reside outside of Indonesia.

The obligations to file and obtain RPTKAs and IMTAs are imposed as of the approval date of the deed of establishment or the deed of amendment, appointing the non-Indonesian nationals to their respective positions.

Additionally, the new regulation imposes a requirement that the employer pay a compensation fund for employing a foreign employee in the amount of $1,200 per annum to the government.

Finally, the new regulation requires that foreign workers who worked in Indonesia for a period of more than six months apply for and obtain a taxpayer identification number (NPWP).

It is unclear, however, if the new requirements apply to all companies, including those who have obtained an approved IMTA under the previous regime, or if the requirements apply only to companies applying for a new IMTA.

The new regulation is effective from June 29 2015.

Oene Marseille and Emir Nurmansyah