On October 23, 2015, the Indonesian Government issued Manpower Regulation No. 35 of 2015 of Expatriate Working Permit (“New Regulation”) as an update regulation of Manpower Regulation No. 16 of 2015 on the same matter (“Old Regulation”). This New Regulation simplifies some provisions which previously stipulated in the Old Regulation.
Since both of the above regulations are critical for every company in Indonesia which has plan to hire expatriates, or is in the process of hiring expatriates, we think it is important for all employers to be aware of the changes in requirements as stipulated in the New Regulation. Therefore, Employers can adjust their plans and process in accordance with the new regulations.
The key changes in the New Expatriate Working Permit Process are as follows:
A. REMOVAL OF LOCAL TO FOREIGNER HIRING RATIO
The New Regulation removes Ratio Requirement of hiring Expatriate and Indonesian worker. As known, the Previous Regulation determined employers to hire at least 10 (ten) Indonesian worker if they want to hire 1 (one) expatriate. By the removal of this this requirement, it will be easier for employer to hire several expatriates without having too many local employees.
B. REMOVAL OF IMTA REQUIREMENT FOR NON-RESIDENTS
Old Regulation requires foreign commissioners or directors to apply IMTA (Work Permit) even if they are not staying in Indonesia, however, in the New Regulation, this provision is removed.
However, for those who had applied IMTA and paid for it can not revoke their payment (Article 66B New Regulation)
C. PROHIBITION TO HIRE EXPATRIATES AS COMMISSIONERS (LOCAL COMPANY ONLY)
Local Companies (Penanaman Modal Dalam Negeri/PMDN) which have 100% Indonesian shareholders are prohibited to hire expatriates for Commissioner in their company, this provision also as an addition to the regulation of prohibited positions for expatriates, such as positions related to Human Resources Department (HRD).
It is clear that the New Regulation is issued to simplify the expatriate permit application process, especially by the removal of several requirements as mentioned above. This is a good thing for both expatriates and employers planning to hire expatriates in their company, since now there are less requirements.
HOW CAN SMART LEGAL CONSULTING HELP YOU?
SMART Legal Consulting has extensive experience in helping employers to ensure that their hired expatriates acquire work permits in order to work in Indonesia, and to maintain such permits to be updated so that they do not lose their validity.
If you need immediate assistance, please contact the SMART Help Desk at: