Indonesia: New Presidential Regulation regarding the use of Foreign Manpower

published on Mai 7, 2018

 
On 26 March 2018, President Joko Widodo signed Presidential Regulation Number 20 Year 2018 [PR No. 20/2018] as replacement of Presidential Regulation Number 72 Year 2014 [PR No. 72/2014] aiming to increase investment in Indonesia. PR No.20/2018 will enter into force on 26 June 2018.
 

Pursuant to PR No. 20/2018, to employ foreign manpower there are several steps that must be completed by the entity wishing to do so. The legal entity needs to have a Foreign Manpower Utilization Plan [Rencana Penggunaan Tenaga Kerja Asing/“RPTKA”] while foreign staff must hold a Limited Stay Visa [Visa Tinggal Terbatas/“VITAS”]. PR No. 20/2018 has waived the need to use a Foreign Manpower Utilization Permit [Izin Mempekerjakan Tenaga Kerja Asing/“IMTA”], that previously was further required by PR No. 72/2014.

Furthermore, there are some professions or positions that do not require the use of RPTKA at all, such as shareholders who are also members of the Board of Directors/Board of Commissioners, diplomatic and consular officers at representations of foreign countries or foreign manpower for certain works needed by the government (to be further stipulated by Ministerial Regulation). An exception may also be made for urgent jobs that require the use of foreign manpower as soon as possible. However, the new Regulation has not defined jobs that are considered as ‘urgent’, pending further amendments or regulations.
 

​Other Notable Changes
 

Subject Matters PR No. 72/2014 PR No. 20/2018

Manpower Social Security
Insurance  

Not required


Required for foreign manpower working in Indonesia for more than 6 (six) months

RPTKA Validity Period

Fixed period maximum of 5 years, extendable

Valid as long as the foreign manpower's employment period

Indonesian Language Training

Not required

Required

Dual Position




Prohibits foreign workers from holding dual positions, except for the positions of directors, commissioners, or supervisors appointed by a general meeting of shareholders

Employers in certain sector may hire foreign workers who already work for another employer in a similar position, as long as the relevant foreign workers would be hired for the similar position in the same employment period

Stay Permit Application

Foreign workers must apply for Temporary Stay Visa prior to applying for Limited Stay Visa

Application for Temporary Stay Visa and Limited Stay Visa may be submitted at the same time

 

​Transitional Provisions

RPTKA and other permits held by foreign staff and employers prior to PR No. 20/2018 remain in effect until their respective expiry dates. Applications for RPTKA and other permits submitted prior to the effective date of PR No. 20/2018 would be completed in accordance with PR No. 20/2018. It has to be noted that the wording of PR No. 20/2018 is very vague, with currently broad room for interpretation and it would require additional regulations from Ministry of Manpower to adjust, implement and clarify the provisions in PR No. 20/2018. 
 

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