Job Creation Law passed
30 Dec 20
IMPACT – HIGH
Indonesia’s government recently passed the Job Creation Law, which impacts work permits and visas for foreign nationals.
- Manpower Utilization Plan. The Rencana Penggunaan Tenaga Kerja Asing (RPTKA) is the preliminary work permit approval, which must be obtained from the Ministry of Manpower (MoM) for foreign nationals planning to work in Indonesia. The Job Creation Law has expanded a previous exemption to the preliminary work permit approval for foreign nationals working as Diplomatic and Consular officers to also cover foreign nationals working as:
- A director or commissioner of an Indonesian company who also holds certain ownership shares or who is a shareholder of such a company pursuant to the applicable laws and regulations.
- Employees that are necessary for an employer whose company’s production activities are ceased due to conditions such as an emergency, an employer in a vocation industry, an employer operating a technology-based start-up company or an employer in a business visit or research industry.
- Work Permits. The Job Creation Law has removed the requirement for employers to apply for a work permit, also known as Izin Mempekerjakan Tenaga Kerja Asing (IMTA), as RPTKA approval is already sufficient. This removal was initiated by the Government through a Presidential Decree in 2018 and it is now being accommodated into the Job Creation Law.
- Application Procedures. The Job Creation Law has resulted in changes in the current visa and permits application procedures, such as the biometric data retrieval process and issuance of the Limited Stay Permit, also known as Izin Tinggal Terbatas (ITAS) in the airport as well as the issuance of an electronic visa to replace the visa sticker.
- Visit visas. The government has added a pre-visit for investment purposes or “pre-investment” into the list of activities for foreign nationals eligible to visit Indonesia using a Visit Visa.
- Second home visas. The law abolished the “elderly visitor” visa and replaced it with a new “Second Home” visa, which may be given to foreigners and their family members to stay in Indonesia. The “Second Home” visa is given in the form of a Limited Stay Visa/Permit, which can be valid for five or 10 years under certain conditions and can later be upgraded to a Permanent Stay Visa/Permit.
- Guarantor. To enhance the current investment climate and entice new investors to Indonesia, the law has added two types of foreign nationals eligible to apply for visas in the absence of a guarantor: (1) foreign nationals who are investing in Indonesia and can satisfy the criteria stipulated in the relevant regulations and (2) foreign nationals of a country having a reciprocal agreement with Indonesia for a guarantor. These two exemptions are in addition to the current exemption for foreign nationals who are legally married to an Indonesian citizen.
- Immigration Guarantee. The law introduced a new concept of immigration guarantee, which is mandatory for foreign nationals investing in Indonesia. The details of this guarantee will be stipulated under the implementing regulations.
- Implementing Regulations. The law stipulates that implementing regulations should be released within three months and currently several draft regulations are already publicly accessible for review and feedback.
Analysis & Comments: Aside from the new types of visas being introduced and the RPTKA exemption for certain foreign nationals, the Job Creation Law mostly memorialized provisions that were implemented by the Government for the last couple of years, including the omission of the work permit, the process of a limited stay permit in the immigration checkpoint and the issuance of an electronic visa. Additional regulations are expected, and Deloitte will provide updates on key developments as information becomes available.
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