The government of Indonesia issued Presidential Regulation No. 20/2018 on the Use of Foreign Workers in Indonesia. This new regulation aims at simplifying the permit application process for foreign workers, hence making the process more efficient and faster. Among the key changes is that the previously mandatory Expatriate Placement Plan (in Indonesian: Rencana Penempatan Tenaga Kerja Asing, or RPTKA) has been removed in specific cases.

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According to commercial real estate company Colliers International Indonesia, more expatriates are renting houses in Indonesia, specifically (South) Jakarta, since the second half of 2017. The rising number of expats who rent houses in Indonesia is due to expansion plans of manufacturing and automotive companies.

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The number of expat workers in Indonesia is declining due to persistently low commodity prices and the government's stricter regulations regarding the hiring of expats. In the first five months of 2016 a total of 72,399 temporary residential permits (including renewals) were issued to expats. It is highly unlikely that the number of expat workers in Indonesia this year will equal the total of 171,944 foreign workers that were active in Indonesia in 2015. Actually the number of expats working in Indonesia has already been on the decline since 2011 (when the commodity slowdown reemerged).

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With the implementation of the ASEAN Economic Community (AEC) per 1 January 2016 - i.e. the community that is designed to allow the free flow of goods, services, investment, and skilled labor as well as the freer flow of capital among its ten member countries - there has been concern among part of the Indonesian population whether there could occur a massive inflow of foreign workers into Indonesia hence giving rise to more competition on the domestic labor market. This column zooms in on the free flow of labor under the AEC.

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Beberapa minggu lalu, telah dilaporkan bahwa Presiden Indonesia Joko Widodo meminta Menteri Tenaga Kerja & Transmigrasi Hanif Dhakiri untuk merevisi draft peraturan (dibuat di tahun 2013) yang mengharuskan para ekspatriat lulus tes penguasaan Bahasa Indonesia sebagai persyaratan mendapatkan izin kerja. Menurut Widodo, peraturan ini akan mengurangi daya tarik iklim investasi Indonesia.

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On 26 July 2015, Indonesia Investments released the latest edition of its newsletter. This free newsletter, which is sent to our subscribers once per week, contains the most important news stories from Indonesia that have been reported on our website in the last seven days. Most of the topics involve economic subjects such Indonesia’s coal royalties, a July inflation update, the weak performance of Indonesian stocks and the rupiah, revised regulations regarding the position of foreign workers in Indonesia, and more.

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The number of expatriates working in Indonesia has declined in the last three years. Based on data from the Ministry of Manpower & Transmigration there were 68,957 expatriates working in Indonesia in 2013, a 4.8 percent decline from 2012. The main reason for this falling number is tighter government policy. Minister Muhaimin Iskandar stated that curtailing the influx of expats is one way of developing the country's human resources. Only when a foreigner has such exceptional qualities - not easily found in Indonesia - should he/she work in Indonesia.

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Presidential Regulation No. 20/2018 on the Use of Foreign Workers continues to be a controversial regulation. In essence the new regulation aims at simplifying the permit application process for foreign workers, hence making the process more efficient and faster. As a result, foreign direct investment (FDI) realization in Indonesia should rise, thus encouraging overall economic growth in Southeast Asia's largest economy.

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The issue of foreign workers has been the topic of much debate in Indonesian media in recent weeks. Ahead of the 2019 legislative and presidential elections political opponents of Indonesian President Joko Widodo are seemingly using this topic to gain popularity and to incite criticism on the government, or even to incite anxiety in society. Lets take a closer look at what it is about and whether criticism or anxiety is grounded or that we are simply dealing with another hoax.

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Over the past couple of weeks public outcry ensued in Indonesia due to rumors (a hoax) that said there are currently about ten million workers from China in Indonesia, implying these immigrants are (potentially) "stealing" jobs from the local population. Xenophobia and nationalist sentiments are no strangers to Indonesia, a country that faced a long colonial period, and therefore this hoax easily ignited anxiety among (part of) the Indonesian people. But how many foreigners are currently actually working in Indonesia?

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When the Indonesian government unveiled Ministry of Manpower Regulation No. 16/2015 in July, foreign companies in Indonesia became nervous. The regulation required that for every foreign worker (expat) in Indonesia, 10 locals would need to be hired. Although the regulation would not work retroactively, while new foreign companies in Indonesia would be allowed to hire low-paid non-permanent staff (such as office boys or drivers), the regulation met resistance from international chambers of commerce.

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Indonesia’s Financial Services Authority (OJK) issued a new regulation that simplifies the opening of a foreign currency bank account by a foreign national (expat). A circular, S-246/S.01/2015 (dated 15 September 2015 and signed by OJK Chairman Muliaman D. Hadad), has been sent to all directors of Indonesian commercial banks that conduct business in foreign currencies. This new rule, part of the economic policy package that was released by the Indonesian government on 9 September, aims to boost foreign currency funds in Indonesia and support the rupiah.

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Soon it will be easier for foreigners (expats) to have a foreign currency bank account (non-rupiah) in Indonesia. Muliaman D. Hadad, Chairman of the Financial Services Authority (OJK), stated it is bound to issue a new regulation that allows for easier banking in foreign currencies in Indonesia. This regulation is made in an effort to raise the country’s foreign exchange reserves and support the ailing rupiah.

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On June 29, 2015, the Minister of Manpower (Minister) issued regulation number 16 of 2015 on the Procedures to Employ Expatriates (New Expatriate Regulation), which revokes the old regulation number 12 of 2013 (Old Regulation). The New Expatriate Regulation impacts expatriates who are planning to work in Indonesia and who are already working in Indonesia and the local companies employing the expatriates. In this column we will discuss the most important changes for expatriate employees and their employers.

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Baru-baru ini Presiden menerbitkan Peraturan Presiden No. 69 Tahun 2015 tentang Bebas Visa Kunjungan (Peraturan Visa Kunjungan). Sebelum penerbitan Peraturan Visa Kunjungan, orang asing diwajibkan untuk memiliki sebuah Visa Kunjungan sebelum memasuki Indonesia. Di bawah peraturan baru ini, orang asing dibebaskan dari kewajiban ini. Peraturan Visa Kunjungan adalah usaha dari Pemerintah Indonesia untuk mendongkrak industri pariwisata dan meningkatkan jumlah wisatawan asing di Indonesia. Peraturan Visa Kunjungan mulai berlaku sejak 10 Juni 2015.

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This column is the third and final column regarding the work permit requirements for foreign workers (expatriates) in Indonesia. In the first column we discussed the requirements set by the Ministry of Manpower, which include (i) Foreign Manpower Utilization Plan (RPTKA), (ii) Approval Recommendation Visa (TA-01), and (iii) Work Permit (IMTA). In our second column we discussed the requirements set by immigration, which include Limited Stay Visa (VITAS) and Limited Stay Permit Card (KITAS). This week we discuss the remaining requirements set by the Police office, the departments of Labor and Demography and Civil Registration.

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In last week’s column we explained which licenses are required by the Ministry of Manpower for expatriates (foreign workers) who wish to obtain a work permit in Indonesia. We explained that the foreign workers (expatriate) who want to work in Indonesia must obtain the following permits which are issued by the Ministry of Manpower: (i) Foreign Manpower Utilization Plan (RPTKA), (ii) Approval Recommendation Visa (TA-01), and (iii) Work Permit (IMTA). Besides these permits, several other permits must be arranged at immigration, which we discuss in this week’s column.

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