Indonesia to Simplify Work Visa Process for Foreign Employees

Updated on Wednesday 18th April 2018

Indonesia has one of the largest workforces in the world, considering its population, however there are industries in which specialists are still necessary and companies find themselves in the position of hiring foreign employees. The employment of foreign workers was somehow difficult until the beginning of this year when the government issued Regulation No. 20/2018 related to the Use of Foreign Workers. Below, our company formation agents in Indonesia explain these new rules.

What does Regulation No. 20/2018 entail?

As mentioned above, the main purpose of the Use of Foreign Workers Regulation is to simplify the hiring of foreign employees, or better said to simplify the process of acquiring an Indonesian work permit. However, according to the ministry of manpower, the new regulation will also lead to Indonesia in attracting more foreign direct investments. This will then trigger to more employment possibilities for the local workforce.

Back to the new regulation, its main provisions are related to:
  • the abolishment of the Expatriate Placement Plan in the case of foreign workers coming to Indonesia for short periods of time;
  • the merger of the limited stay visa and limited stay permit into one procedure;
  • the issuance of the limited stay visa and limited stay permit within 2 working days.
Also, the two types of permits will be directly issued by the Indonesian embassy in the foreign applicant’s country.

Requirements for Indonesian companies hiring foreign employees

The Use of Foreign Workers Regulation also contains several provisions for Indonesian companies hiring foreigners. Among the requirements these must comply with are:
  • the company must first verify if a national can occupy the position;
  • the job offered cannot be in the human resources;
  • the employer must register the foreign worker with the Manpower Social Security, if the position is occupied for more than 6 months.
The work permit for a foreign employee can be issued for a maximum period of 2 years, however, it can be extended.

The new regulation will enter into effect starting with June 29th.

For full information on the new Regulation No. 20/2018 please contact our Indonesia company incorporation advisors. We can also help you open a company in Indonesia.