Indonesia

New decree reverses several recent immigration regulation changes

27 Oct 15

INDONESIA

IMPACT – HIGH

What is the change? The Ministry of Manpower signed a decree on Oct. 23 creating new guidelines that supersede and reverse several of the more restrictive immigration regulation changes that were implemented at the end of June.

What does the change mean? Indonesian authorities have removed recently imposed requirements regarding work authorization for business visits and for nonresident foreign directors, as well as foreign worker quotas.

  • Implementation time frame: Immediate.
  • Visas/permits affected: Business Visa, IMTAs (work permits)
  • Who is affected: Foreign nationals traveling for business or working in Indonesia.
  • Impact on processing times: Processing times may decrease as demand for work authorization is reduced; however, recent changes in IMTA application procedures mean processing times are still somewhat unpredictable.
  • Business impact: The reversal of some of the recent requirements will somewhat reduce the burden on companies that employ foreign workers, send business travelers to Indonesia or have nonresident foreign directors.
  • Next steps: Employers should work with their BAL representative to confirm if any pending work authorization applications may be affected.

Background: As BAL previously reported, Indonesian authorities enacted Manpower Regulation 16/2015 on June 29. In response to feedback from the international business community in Indonesia, Manpower Ministerial Decree 35/2015 was signed Oct. 23. The decree significantly alters the effects of Regulation 16.

Work authorization is no longer required for training, speeches or seminars, nor for meetings at the business traveler’s representative or branch office in Indonesia. However, business visas are still required when performing these activities in Indonesia. The following activities will require an IMTA of appropriate duration:

  • Short-term work authorization is required for conducting audits, quality control and inspections of Indonesia branches for more than one month.
  • Making a movie with noncommercial value (permission from relevant agencies also required).
  • Activities related to machinery installation, electrical, after-sales service or products that are in an exploration stage.

Furthermore, nonresident foreign directors and commissioners are no longer required to obtain an IMTA. Finally, the foreign-to-local ratio of 1:10 has also been removed as a requirement for companies employing foreign workers.

BAL Analysis: The easing of the requirement for work authorization for business meetings will make it simpler to conduct business activities in Indonesia again. The removal of the foreign worker quota and the requirement for foreign nonresident directors to obtain an IMTA will also lessen the burden of international companies that have branch offices in Indonesia or employ foreign workers in general. Indonesian immigration regulations are still undergoing intensive review by the relevant authorities and changes are possible without notice.

This alert has been provided by the BAL Global Practice group and our network provider located in Indonesia. For additional information, please contact your BAL attorney.

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