The Corporate Immigration Review: Indonesia

Introduction to the immigration framework

Immigration matters in Indonesia are overseen by the Directorate General of Immigration (DGI), which is under the auspices of the Ministry of Law and Human Rights. Indonesian immigration laws and regulations recognise four types of visas that allow the entry of foreigners into Indonesia, namely diplomatic visas, service visas, visit visas and limited stay visas. These visas serve as the basis for foreigners to obtain stay permits once they have entered Indonesia. There are five types of stay permits recognised under Indonesian immigration laws and regulations, namely diplomatic stay permits, service stay permits, visit stay permits, limited stay permits and permanent stay permits. Different types of visas and stay permits allow different types of activities.

i Legislation and policy

Immigration matters in Indonesia are governed under various laws, regulations and circular letters issued by the Ministry of Law and Human Rights or the DGI, or both. For the employment of foreign workers, the Ministry of Manpower is the government institution authorised to issue work permits for employers to employ foreigners in Indonesia, and the visa process for these foreign workers commences once the work permit application is submitted to the Ministry of Manpower. Especially after the integration of the Ministry of Manpower's and the DGI's online systems in 2018, the process of obtaining a work visa (a limited stay visa for working purposes) has become more efficient and straightforward.

Below are the main laws and regulations valid as at the time of writing setting forth rules for immigration and foreign workers in Indonesia:

  1. Law No. 11 of 2020 dated 2 November 2020 regarding Job Creation (Job Creation Law);
  2. Law No. 6 of 2011 dated 5 May 2011 regarding Immigration, as amended by the Job Creation Law (Immigration Law);
  3. Law No. 13 of 2003 dated 25 March 2003 regarding Manpower, as amended by the Job Creation Law (Labour Law);
  4. Government Regulation No. 34 of 2021 dated 2 February 2021 regarding the Utilization of Foreign Workers (GR 34/2021);
  5. Government Regulation No. 48 of 2021 dated 2 February 2021 regarding the Third Amendment to GR No. 31 of 2013 regarding the Implementing Regulation of the Immigration Law (GR 48/2021);
  6. Minister of Law and Human Rights (MOLHR) Regulation No. 26 of 2020 dated 29 September 2020 regarding Visas and Stay Permits During the New Normal Adaptation Period (MOLHR Reg. 26/2020);
  7. Minister of Manpower (MOM) Regulation No. 10 of 2018 dated 11 July 2018 regarding Procedure to Utilize Foreign Workers (MOM Reg. 10/2018);
  8. MOLHR Regulation No. 24 of 2016 dated 27 July 2018 regarding Technical Procedures for the Application and Granting of Visitor Visas and Limited Stay Visas, as amended by MOLHR Regulation No. 51 of 2016 dated 15 December 2016;
  9. MOLHR Regulation No. 16 of 2018 dated 27 July 2018 regarding Procedures for the Issuance of Visas and Stay Permits for Foreign Workers;
  10. MOM Decree No. 228 of 2019 dated 27 August 2019 regarding Positions Allowed to Be Occupied by Foreign Workers (MOM Decree 228/2019); and
  11. MOM Decree No. 349 of 2019 dated 31 December 2019 regarding Positions Prohibited to Be Occupied by Foreign Workers (MOM Decree 349/2019).

With the issuance of the Job Creation Law, GR 48/2021 and GR 34/2021, it is expected that some of the above-mentioned regulations, especially MOM Reg. 10/2018 and the MOLHR Regulations on visas and stay permits for foreign workers, will be amended or updated, or both, soon.

ii The immigration authorities

As mentioned above, the DGI, led by the Director General of Immigration, is responsible for overseeing immigration matters in Indonesia.

The DGI has a duty to carry out the formulation and implementation of policies in the field of immigration in accordance with the applicable laws and regulations. In carrying out this duty, the DGI formulates, implements, provides technical guidance, supervises, monitors, evaluates and reports policies relating to the enforcement of immigration law and security, immigration services and facilities, border crossing and foreign immigration cooperation, and immigration information technology. The DGI also implements the administration of the DGI and performs other functions assigned by the MOLHR.

The DGI's organisational structure consists of the following:

  1. Secretariat of the Directorate General;
  2. Directorate of Immigration Traffic;
  3. Directorate of Immigration Stay Permit;
  4. Directorate of Immigration Intelligence;
  5. Directorate of Immigration Control and Enforcement;
  6. Directorate of Immigration Cooperation; and
  7. Directorate of Immigration Information Systems and Technology.

There are immigration offices in regencies, municipalities, and districts across Indonesia to implement immigration functions. Officers assigned to such immigration offices must already have completed a special immigration education course and possess technical immigration expertise, and have the authority to carry out duties and responsibilities pursuant to the Immigration Law. Certain immigration officers and immigration civil servant investigators are also authorised by law to carry out criminal investigations related to immigration.

iii Exemptions and favoured industries

There are 169 countries whose nationals are, in normal times, eligible for a visit visa exemption when entering Indonesia. However, due to the pandemic and as set forth in MOLHR Reg. 26/2020, the granting of this exemption is suspended until the covid-19 pandemic is declared to be over by the government. At the time of writing, the Ministry of Manpower has suspended new work permit applications for foreign workers who have not yet entered Indonesia. There is an exception for foreign workers working on national strategic projects and strategic or national vital objects based on a recommendation or special permit from the relevant ministry or institution. A list of national strategic projects can be seen in Presidential Regulation No. 109 of 2020 regarding the Third Amendment to Presidential Regulation No. 3 of 2016 regarding the Acceleration of the Implementation of National Strategic Projects (PR 109/2020). If a project is not included in PR 109/2020, companies may request a recommendation and statement letter from the Coordinating Ministry for the Economy or the Coordinating Ministry for Maritime and Investment Affairs.

International treaty obligations

On 15 August 2002, Indonesia joined the APEC business travel card scheme, which was introduced on 1 May 2004. The Asia-Pacific Economic Cooperation (APEC) is an organisation of Asia-Pacific countries established in Canberra in November 1989 with the aim of building and strengthening economic cooperation among member states.

The year in review

As part of the government's goal to make Indonesia more investment-friendly through the enactment of the Job Creation Law, a new government regulation (GR), GR 48/2021, was issued and came into force on 2 February 2021.

While the principal provisions relating to the presence of foreigners in Indonesia under the previous laws and regulations remain in force, GR 48/2021 introduces some significant changes, as follows:

i Change in validity of limited stay permit

One of the biggest changes introduced by GR 48/2021 is the legally permissible length of a foreigner's limited stay permit (ITAS). Previously, an ITAS was granted for a maximum period of two years and could be extended for maximum two-year periods up to an aggregate stay of six years in Indonesia, after which the foreigner was required to process a new ITAS.

GR 48/2021 now provides that an ITAS is valid for a maximum of five years and can be extended under the condition that the aggregate stay of the foreigner in Indonesia does not exceed 10 years. GR 48/2021 also further clarifies that an ITAS for work purposes that is valid for no more than 90 days can be extended under the condition that the aggregate stay of the foreigner in Indonesia does not exceed 180 days.

ii Change in validity period of visit stay permits

Simplification is a big theme of GR 48/2021, with the regulation revising provisions of older regulations to be more straightforward and easier to comprehend. For example, in the case of a visit stay permit issued based on entry to Indonesia under a single-entry visit visa, GR 48/2021 now provides that such visit stay permit is valid for a maximum period of 180 days and is non-extendable. The validity period used to be 60 days and it was extendable inland four times up to an aggregate stay of six months.

Meanwhile, visit stay permits issued based on entry under a multiple-entry visit visa are granted for a maximum period of 180 days and are extendable up to an aggregate stay of no more than 12 months in Indonesia.

Another big change is the validity period of stay permits issued based on entry under a visit visa on arrival, which used to be 30 days and extendable for another 30 days. Under GR 48/2021, the maximum validity period of this stay permit is no more than 30 days and it is no longer possible to be extended.

iii Introduction of the second home category

GR 48/2021 introduces a new category to Indonesian immigration rules, whereby foreigners can now obtain a limited stay visa (VITAS) for non-work purposes for the purpose of having Indonesia as a second home. Foreigners must have settled in Indonesia for five to 10 years and fulfil certain requirements to qualify for this new visa category. This second home category replaces the category for elderly tourists, who were eligible for a non-work VITAS in previous regulations. GR 48/2021 provides that a non-work VITAS already issued for elderly tourists shall remain applicable as a non-work VITAS for foreigners in the second home category.

iv Additional requirements to obtain a VITAS

GR 48/2021 adds two requirements for a VITAS application, namely:

  1. a statement letter of good standing from the relevant authorities or the embassy or consulate of the foreigner's country of origin; and
  2. a health examination letter stating that the foreigner is free from any contagious disease that could endanger public health.

v Pre-investment and requirements for obtaining a visit visa

GR 48/2021 adds a new eligibility category for both single and multiple-entry visit visas (i.e., pre-investment activities). These are activities in conjunction with starting a business, such as activities related to field surveys and feasibility studies. In relation to the required guarantee letter from a guarantor for a visit visa application, if a foreigner does not have a guarantor then the guarantee letter can be replaced with a proof of payment of an immigration guarantee, as discussed below.

vi Immigration guarantee

GR 48/2021 requires certain foreigners in Indonesia to have a guarantor responsible for the presence and activities of said foreigners during their stay in Indonesia, and for reporting any change in the civil status, immigration status or address of such foreigners. This guarantor requirement does not apply to foreigners legally married to Indonesians, foreign investors or citizens of countries that reciprocally waive guarantee requirements.

Foreign investors, 'second home' foreigners and foreigners engaged in pre-investment activities may make an official payment to a Directorate General of Immigration bank account that will be treated as an immigration guarantee payment that replaces the guarantor requirement. This payment will be used, if necessary, to cover the cost of repatriation or deportation, overstay or any other outstanding immigration costs that must be paid by the relevant foreigner. If the immigration guarantee is not used to pay immigration obligations, the full amount of the payment shall be returned to the foreigners once their stay permit expires.

vii Conversion of stay permits

Another significant change introduced by GR 48/2021 is the possibility for foreigners themselves to apply to the relevant head of immigration office or appointed immigration official for the conversion of a visit stay permit to an ITAS, or an ITAS to a permanent stay permit (ITAP). Previously, only guarantors could submit these applications.

The covid-19 pandemic has forced countries around the word to reconsider their international travel policies, including Indonesia. Based on the latest policy as at the time of writing, foreigners cannot travel to Indonesia from abroad (either direct travel or in transit) unless they fulfil certain criteria, such as complying with the provisions of MOLHR Reg. 26/2020, having qualified for the travel corridor arrangement scheme, or having obtained a special consideration or permit in writing from the relevant Indonesian ministry or institution.

MOLHR Reg. 26/2020 provides that foreigners with a valid visa or stay permit may enter Indonesia after fulfilling the required health protocols regulated by the relevant health authority. Foreign nationals can apply for all types of visas and stay permits, with the exception of the visit visa exemption as mentioned above and a visa on arrival (VOA), which are still suspended until the pandemic is declared over by authorities. In addition, while not explicitly stated, it appears that multiple-entry visit visas are also not yet open for applications.

Specifically for visit visas, only applications for a single-entry visa are allowed at this time. As noted above, it appears that multiple-entry visas are not yet open for applications. The following are the permitted activities under a single-entry visit visa:

  1. performing emergency and urgent work;
  2. attending business meetings;
  3. conducting purchase of goods;
  4. performance of probationary work by a foreign worker;
  5. providing medical and food-related support; and
  6. catching a transportation connection located in Indonesian territory.

MOLHR Reg 26/2020 provides that a VITAS may be obtained for the following work and non-work activities to be performed in Indonesia.

  1. work activities:
    • performing work;
    • working on a vessel, rig or installation operating in Indonesian waters;
    • performing a quality check on goods or production;
    • inspecting or auditing a branch office in Indonesia;
    • providing after-sales service;
    • installing and repairing machines;
    • performing construction-related temporary work; and
    • a foreign job candidate performing probationary work;
  2. non-work activities:
    • conducting foreign investment;
    • family reunification; and
    • a visit by elderly foreign tourists.
    viii Application requirements

To obtain approval for a visit visa and VITAS (visa telex), the guarantor of the foreigner in Indonesia must submit an application through the relevant online system, attaching the following documents:

  1. a health certificate containing a statement in English issued by the relevant authority in the foreigner's country of origin that the foreigner is covid-19 free;
  2. a statement letter in English stating the foreigner's willingness to quarantine or obtain medical treatment at his or her own expense, or both, if, upon arrival in Indonesia, he or she has a positive polymerase chain reaction test or shows symptoms of covid-19;
  3. a statement letter affirming the foreigner's willingness to be medically monitored during any quarantine period; and
  4. evidence of health or travel insurance participation that encompasses medical coverage; a statement letter regarding the foreigner's willingness and ability to pay for his or her own treatment if he or she becomes infected with covid-19 during his or her stay in Indonesia; or both.

The guarantor is also required to provide evidence showing possession of at least US$10,000 to cover the foreigner's living costs in Indonesia. This requirement is waived for medical and food-related workers, as well as transportation crew members.

Foreigners currently in Indonesia holding expired stay permits originating from a VOA, single-entry or multiple-entry visit visa, as well as an APEC business travel card, may apply for a stay permit extension at their local immigration office. The maximum stay permit extension is 30 days for each successful application. MOLHR Reg 26/2020 also allows the conversion of a visit stay permit to an ITAS.

ITAS and ITAP holders currently in Indonesia with expired stay permits can be granted extensions based on the previous stay permit. The regulation also allows the conversion of an extended ITAS to an ITAP.

Foreigners who hold an ITAS or ITAP that can no longer be extended can be granted a new stay permit after first obtaining a visa telex. This also applies to foreigners currently residing in Indonesia who hold any type of stay permit. However, for foreigners holding an ITAS, ITAP or e-entry permit (IMK) and who are dependent on an ITAP holder, if their stay permit is already expired and they are currently outside of Indonesia, they must apply for a new visa to enter Indonesia.

The visa telex for foreigners who currently reside in Indonesia as discussed above consists of a visit visa telex or a VITAS telex. To obtain a visa telex the guarantor must submit an application online and pay for the visa telex and visa fee. The visa telex will serve as an e-visa.

The visit visa telex will automatically serve as a visit stay permit, while the VITAS telex will become an ITAS when the foreigner has processed it at the relevant local immigration office.

Foreigners who are now outside Indonesia whose visa telex or visa has expired are required to apply for a new visa before entering Indonesia.

Foreigners who fail to apply for or extend their stay permit while residing in Indonesia may be subject to overstay fines as regulated under the applicable laws and regulations.

Employer sponsorship

The Immigration Law and Labour Law require foreigners to be employed by an Indonesian employer to legally work in Indonesia. It is the employer, and not the employee, who is required to obtain a work permit to allow its foreign worker to legally work in Indonesia. The employer must apply for the work and immigration permit through an online system called the TKA online system,2 which is managed by the Ministry of Manpower. Applications for visas that are not for work purposes can be submitted through the DGI's online visa system.3

i Work permits

Any employer who employs foreign workers in Indonesia must obtain a proper work permit issued by the central government (the Ministry of Manpower). Previously, employers were required to obtain a work permit in the form of a foreign worker utilisation plan (RPTKA) and notification approved and issued by the MOM prior to employing foreign workers. Now, following the issuance of GR 34/2021, a notification is no longer required. It has been replaced by a procedure called the RPTKA appropriateness assessment (RPTKA assessment). During the RPTKA assessment, the MOM will determine within two business days upon receipt of complete application documents whether the submitted information and documents are sufficient.

Once the MOM issues the RPTKA assessment result, applicants are required to submit personal information and documents of the foreign workers. Pursuant to GR 34/2021, this personal information and documents will be verified by the MOM within no more than two business days.

Upon the verification and the payment of the DKP-TKA (the foreign worker utilisation compensation fund) by the employer of the foreign worker for each month that the foreign worker is expected to work in Indonesia in an amount of US$100 per month (paid in advance), the MOM will issue the RPTKA approval. Government institutions, international bodies and foreign state representatives are exempted from the requirement to undergo the RPTKA assessment.

After the issuance of the RPTKA approval, the TKA Online System will send the relevant data to the DGI for further processing of the VITAS for working purposes, which will grant entry of the foreign workers to Indonesia.

ii Labour market regulation

Indonesia's local workforce and job opportunities are mainly protected through limitations on positions that can be occupied by foreign workers. In 2019, the MOM issued Decrees No. 228 and No. 349, which list those positions that can be occupied by and those that are restricted for foreign workers in Indonesia. By virtue of these Decrees, the government prioritises Indonesian workers to fill positions that can be filled by local workers.

Further, prior to issuing a work permit, the MOM will carefully assess all the information and documents submitted by the Indonesian employer for the prospective foreign employee (e.g., curriculum vitae, certifications, job description) and determine whether the proposed employment is in line with the government's goal to encourage investment growth while also taking into consideration the availability of Indonesian workers. Employers in Indonesia are required to submit an annual report to the Ministry of Manpower on their employment of foreign workers. The report covers the implementation of foreign workers' employment, the education and training of Indonesian co-workers, and knowledge and technology transfer from the foreign workers to their Indonesian co-workers. Employers must also submit a report to the Ministry of Manpower when completing or terminating the employment relationship with their foreign workers.

iii Rights and duties of sponsored employees

Regardless of whether they are working, all foreigners in Indonesia have the obligation to provide any information requested by the DGI relating to their identity and they must also report any change of civil status, citizenship, job, guarantor or change of address to the local immigration office. All foreigners in Indonesia must also hand over their passport or stay permit if requested by a DGI official for immigration supervision purposes. Failure to comply with these requirements may result in the imposition of criminal sanctions. The Immigration Law sets forth other provisions that must be followed by foreigners in Indonesia to avoid criminal sanctions.

From an employment perspective, the regulations on the employment of foreign workers focus more on the obligations of the employers or sponsoring entities that employ foreigners in Indonesia. Some of the rights of the foreign employees can be inferred based on the employers' obligations stated in the regulations.

For example, employers are obligated to facilitate Indonesian language education and training for every foreign worker they employ. Therefore, it can be concluded that every foreign worker has the right to be provided with Indonesian language education and training while working in Indonesia. Further, employers are required to register their foreign workers with – and therefore foreign workers have the right to be covered by – a national insurance programme, BPJS, if they work in Indonesia for more than six months, and by private insurance that includes occupational accident benefits if working in Indonesia for less than six months. Employers are also required to appoint and implement education and work training for Indonesian co-workers (TKA) and foreign workers are expected to implement a transfer of knowledge and technology to the Indonesian co-workers.

Investors, skilled migrants and entrepreneurs

From an immigration perspective, the latest regulations provide the possibility of entering Indonesia for pre-investment purposes without having a sponsor, as discussed in Section III.

From a foreign employment perspective, in principle, all foreigners working in Indonesia must have a sponsor and the sponsor must obtain a work permit to allow the foreigners to work in Indonesia. There are certain foreigners whose employment is exempted from the obligation to obtain a work permit, including directors and commissioners who are also shareholders, regular shareholders, foreign workers needed in cases where a production activity is suspended due to an emergency situation, and foreign workers for vocational activities, technology-based start-ups, business visits and research for a particular time period.

Outlook and conclusions

With the covid-19 pandemic and the issuance of the historic Job Creation Law, which marks a significant legal reform in Indonesia, 2020 was a very dynamic year for immigration law and the investment climate in Indonesia. This dynamism promises to continue through the coming year. It is likely that policies on international travel and the employment of foreigners in Indonesia will continue to change and shift along with developments in the handling of the pandemic. However, the applicability of new regulations post the Job Creation Law, which promise greater ease for investors and foreign workers in Indonesia, while still adhering to health and safety protocols, indicates that the government is prepared to adapt to these difficult times.

Footnotes

1 Stephen Igor Warokka is a partner at SSEK Legal Consultants

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