Indonesia changes skills-fee payment procedures

IMPACT – LOW

What is the change? Indonesia has adopted new rules on how to make payments to the government’s Skills and Development Fund (DPKK) during the work permit application process. The payments are required of companies that employ foreign workers.

What does the change mean? Effective immediately, companies must pay the DPKK fee through a direct cash transfer at select banks using a specified e-billing code. The old DPKK account number (11773003) has been deactivated.

Implementation timeframe: Immediate and ongoing. The change has taken effect on an interim basis and will be made permanent Sept. 1.

• Visas/permits affected: Work permits.
• Who is affected: Companies making DPKK payments during the work permit application process.
• Business impact: Businesses should note the change and make sure that they have the necessary cash on hand when they need to make DPKK payments.
• Next steps:While the payment procedure described above is the only option currently available, more options may be available after Sept. 1. BAL will continue to follow any developments and provide updates if necessary.

Background: Companies that hire foreign nationals are required to pay the DPKK fee to the Ministry of Manpower and Transmigration to help train the domestic workforce. This government fee must now be paid by direct cash transfer at Bank Negara Indonesia (BNI), Mandiri Bank or Bank Rakyat Indonesia (BRI) using a billing code that will be provided during the work permit (IMTA) application process or pre-IMTA process.

BAL Analysis: Authorities have said that failure to make payments according to the new process may result in a reimbursement process that could take up to one year. Contact BAL with any questions about how to properly follow the new guidelines.

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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Source: Berry Appleman & Leiden LLP