Navigating Murky Waters – Business Travel Advice for Visitors to Indonesia
August 17, 2015
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By: Kenneth Lau
In June 2015, the Indonesia Ministry of Manpower (MOM) released new regulations for foreign worker employment (MOM Regulation Number 16 of 2015) (‘new regulations’). These further defined what activities the MOM considers to be ‘work’ and for which a work permit would be required. This greatly limited the list of permissible activities for bona fide business visitors and those traveling on business visa status. This article summarises the new regulations as they pertain to business travel and provides a cautionary note regarding what is yet unknown.
Modes of entry
Business travelers have several possible modes of entry to Indonesia. These include:
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Single-Entry Visit Visa (Index 211) (SEVV) (Visa Kunjungan):
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Application point: Directly at an Indonesian Embassy or Consulate abroad. We recommend the applicant applies in their home country or country of legal residence.
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Duration of stay permitted: Valid for a single visit lasting a maximum of 60 days. The individual must leave Indonesia prior to the expiry date.
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Multiple-Entry Visit Visa (Index 212) (MEVV):
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Application point: Directly from an Indonesian Embassy or Consulate abroad. An MEVV requires pre-approval from the Directorate General of Immigration (DGI) in Indonesia, and is typically sponsored by the Indonesian host company. An individual may only submit their application once pre-approval has been secured. It is unlikely that an MEVV will be granted to any individual who has not previously been granted several SEVVs.
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Duration of stay permitted: Valid for a maximum period of one (1) year, with no more than 60 days allowed per visit. The traveler must exit before the 60-day period has expired and then re-enter the country for a new 60-day period to begin.
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Visa-On-Arrival (Index 213) (VOA):
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Application point: On arrival at the port of entry, e.g., at an airport. The VOA is available for nationals of certain countries and is valid for up to 30 days. The individual should ensure that their passport is valid for at least six (6) months beyond the intended date of entry and contains at least one (1) blank visa page. The current fee for a VOA is USD35.
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Duration of stay permitted: Valid for a single visit of up to 30 days.
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Visa-Free Nationals:
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Application point: No application is necessary. Certain nationals may enter Indonesia without any kind of visa. Appendix B lists eligible nationals.
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Duration of stay permitted: Up to 30 days from arrival.
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Previously permissible activities for business travelers
Business visits have typically occupied a gray area under Indonesian immigration law. Per the previous Indonesian immigration regulations, visitor visas would generally be granted to foreign nationals traveling to Indonesia for government duties, educational, social or cultural visits, tourism, business visits or family visits, journalism activities or when in transit to other countries (emphasis added). (See Government Regulation of the Republic of Indonesia, Number 31 of 2013 Concerning Implementing Regulation of Act Number 6 of 2011 Concerning Immigration, Article 89.) In practice, however, business visitors were advised to take care to ensure their activities and the frequency and duration of their visits did not give rise to the impression that they were working in the country.
Practically speaking, business travelers to Indonesia were permitted to carry out the following business activities:
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Attend business meetings, business negotiations and the like;
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Hold business discussions, such as for the sale and purchase of goods and services;
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Participate in seminars or international exhibitions;
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Attend a conference held by the company’s head office or representative office in Indonesia; and
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Explore opportunities in business development, investment or sales.
However, if a business trip (even a very brief one) involved only the activities above, business travelers still need to be mindful if:
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The activities performed were under the direct control of the Indonesian entity;
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The individual was performing ‘hands on’ work;
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The individual was performing activities which would generate a profit and/or other benefits to the Indonesian entity, either directly or indirectly;
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The individual was performing activities on behalf of, in the name of, or as a representative of the Indonesian entity;
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The individual was carrying out activities directly billable to the host entity, i.e. activities for which an entity in the host country would be charged;
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The individual was carrying out activities directly billable outside Indonesia, i.e. activities for which an entity outside Indonesia would be charged;
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If the individual appeared on the Indonesian entity’s Deed of Establishment or Title Deed (Akta Notaris) as a Director or Commissioner; or if
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In any other way, the individual gave the appearance that they were working at the Indonesian company, e.g. they held a namecard under the Indonesian entity, had a workstation at the company, etc.
At their discretion, the authorities could also refuse entry to anyone they believed would be working in Indonesia without the requisite work authorization.
Business travel under the new regulations
The new regulations further limit the list of allowable business activities, indicating that some previously permissible activities may now require a work permit. At this point, it is important to note that the new regulations were issued by the MOM and it is yet to be seen how they will be reconciled with the Directorate General of Immigration’s (DGI) own policies and regulations. Currently, the DGI website indicates a wide variety of permissible activities for business visitors.
Keeping that in mind, the new regulations indicate the following activities will now require at least a short-term work permit:
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Mentoring, counseling, and training activities;
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Commercial film making;
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Lecturing or presenting;
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Attendance at meetings organized by the head office or representative office in Indonesia;
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Audits, production quality control or inspections at branch offices at the company in Indonesia;
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Undergoing a competency assessment in Indonesia;
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One off or ad hoc jobs; and
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Work related to machinery or electricity installation, after-sales services or product services within the period of business development.
The activities indicated in bold above, with some exceptions and limitations, were previously permissible under business visitor status but now require a work permit to be granted. While the new regulations also introduced revised short-term work permit categories, including those for temporary work which should encompass the majority of activities listed above, it is still likely to be an administrative burden for companies to obtain such permits, especially for short-term business trips.
Options and recommendations
Until such time as the temporary work permit is implemented, it is still possible for the bona fide business traveler to visit Indonesia under a business visa issued by the Indonesian Consulate in their home country. However, care should be taken as there are reports of business travellers being questioned by immigration officers upon arrival. Therefore, we recommend that VOA-eligible nationals should also apply for a business visa at an Indonesian Consulate, time permitting.
Because the new regulations have caused a degree of uncertainty surrounding current business travel rules, we also recommend that companies and business travelers take a cautious and practical approach to their visits, as the new regulations regarding business meetings remain unclear. At this point, the regulations indicate only those meetings which are organized by a company’s head office or representative office in Indonesia require authorization work permit, so it is likely that business meetings are at least low risk for travelers to conduct. That said, practical precautions should be taken into consideration, including not performing work activities outside the context of business meetings, not visiting the company office and/or working remotely from a workstation at the office, and making arrangements to meet with clients at a neutral site or at their office.
Requirements for foreign Directors and Commissioners
Under the circumstances, it is important to be cautious in the case of foreigners who are listed as Directors and Commissioners on the Indonesian company’s Title Deed (Akta Notaris). The new regulations appear to require such individuals to obtain a work permit as of the date of issuance of the Title Deed, regardless of whether or not they are physically present in Indonesia. Based on current discussions with the MOM, it is clear that those foreign Directors and Commissioners who enter Indonesia (even for permissible business traveler activities) would need to obtain a work permit prior to doing so. It is likely to be high risk for Directors especially to enter Indonesia for business travel without a work permit.
Implementation of the new regulations
The new regulations are currently undergoing an uneven implementation period. Although it has not yet been announced, it is expected there will be a ‘socialization’ or public comment period, during which feedback regarding the new regulations may be submitted to the MOM. It is expected that the new rules for business travel will be further clarified, giving visitors clear instructions as to how to proceed with their travel arrangements.
On the other hand, we are also anticipating the release of regulations from the Ministry of Law and Human Rights, which has jurisdiction over the Immigration authorities, in order to harmonize MOM and Immigration Department rules. It is unclear, however, when this may occur.
