Virginia, US

Apr 12 2018

New Regulation to Streamline Work Permit Process

Indonesia

At a Glance

A new Presidential regulation creates more flexible rules for employers submitting Foreign Manpower Utilization Plans (RPTKA), including a shorter processing time, potential exemptions, more flexible rules for urgent and emergency work, and other work permit-related changes.  Implementing regulations are expected to be issued within the next few months.


The situation

In line with recent developments, a new Presidential regulation will significantly change the Indonesian work permit system, consistent with the government’s goals of boosting the economy and attracting foreign investment.  The new regulation is expected to be implemented June 29, 2018. 

A closer look

The main expected changes are discussed below.

  • Foreign Manpower Utilization Plan changes. The most important changes affect the Foreign Manpower Utilization Plan (RPTKA) – generally the initial application in the work permit process, filed with the Ministry of Manpower (MOM). The changes in the new regulation include the following:
    • Processing time. The MOM will process complete RPTKA applications within two business days. Previous regulations also indicated relatively short RPTKA processing times, but, in practice, actual processing times were much longer.
    • RPTKA exemptions. The following categories of foreign workers will not be required to apply for an RPTKA:
      • Foreign shareholders of the company who are listed as a named Director or Commissioner (on the company’s Title Deed);
      • Diplomatic and consular officers; and
      • Foreign workers in jobs deemed vital by the Indonesian government (it is not yet clear which jobs would fall under this category and/or which agency would make this determination).
    • Multiple employers. A foreign worker will be able to work for more than one employer, depending on the industry sector. Additional related implementing rules, including information on specific job titles, procedures, and eligible industry sectors, are likely to follow.
    • Further clarifications likely. It should be noted that the new regulation does not specifically mention the Work Permit (IMTA), the work authorization issued by the MOM to a foreign worker.  The actual work permit process is therefore likely to be further clarified by the MOM in subsequent regulations.
       
  • Limited Stay Visas and Limited Stay Permits changes. Along with the changes to the RPTKA process (carried out by the MOM), the regulation also introduces significant changes to the Limited Stay Visa (VITAS) and Limited Stay Permit (ITAS) processes, overseen by the Directorate General of Immigration (DGI), which sits within the Ministry of Law and Human Rights.  These changes include:
    • Processing time. The regulation stipulates that the VITAS should be issued within two business days upon receipt of the complete application by the Indonesian Embassy/Consulate.
    • Process. The regulation also indicates that the ITAS can be applied for at the Embassy/Consulate, rather than after entry (as is the current process).  The actual ITAS will then be issued upon arrival at the port of entry.
    • Longer validity. The ITAS can be issued for two years and is extendible.
    • Further clarifications likely. As with the changes to the RPTKA above, it is likely that the Ministry of Law and Human Rights will issue further regulations to clarify on the VITAS and ITAS processes and requirements to supplement the Presidential regulation.
       
  • Other changes. The regulation also covers other important topics, highlights of which are summarized below, and discussed in more detail here.
    • Urgent and emergency work. The regulation allows an employer to apply for a RPTKA for a foreign worker carrying out urgent and emergency work in Indonesia within two days of the foreign worker’s arrival in Indonesia.
    • Alternative proof of insurance. The new regulation seems to allow employers to register foreign workers in a private social security program.
    • Co-laborer training certificate. Employers will be required to issue a certificate of training/competence for the Indonesian co-laborer, as proof of the transfer of knowledge from the foreign worker.
       

Transitional measures

All existing RPTKA and work permits will remain valid up to their expiry dates when the new rule goes into effect.  However, the regulation indicates that RPTKA and other permit applications that are pending on or before June 29, 2018 will be adjudicated under the new regulations and rules.

Impact

Employers should benefit from the more flexible rules and timeframes.  However, employers can expect a period of uncertainty over the next several months, as the relevant ministries issue their own implementing regulations.

The current work permit and immigration rules will continue to apply until the new regulation, and any subsequent ministerial regulations implementing it, come into effect. 

It is not yet clear how the regulation will be implemented across the various relevant government agencies involved in the work permit and immigration process or how existing regulatory inconsistencies will be reconciled.  The ministries are likely to issue implementing regulations within the next few months, which should provide further clarity on the new processes. 

Fragomen will continue to monitor the situation and provide further updates as new information is released.

We worked closely with PNB Immigration Law Firm to prepare this alert. This alert is for informational purposes only. If you have any questions, please contact the global immigration professional with whom you work at Fragomen or send an email to APCCInitiations@fragomen.com.