Indonesia: Government Passes Job Creation Law

January 7, 2021 Lucy Halse

 

Key Points

  • The government passed a Job Creation Law that impacts visas and work permits for foreign nationals
  • The law affects the Manpower Utilization Plan, work permits, and application procedures for visas and permits
  • More preliminary work permit exemptions are added to the Manpower Utilization Plan
  • The previous requirement for employers to obtain a work permit is eliminated
  • The law changes biometric data retrieval and Limited Stay Permit application procedures
  • Foreign nationals may enter Indonesia with a Visit Visa or Second Home Visa
  • Some foreign nationals may now enter Indonesia on a visa without a guarantor
  • Regulations in the Job Creation Law will be implemented over the next three months

Overview

The Indonesian government has passed the Job Creation Law, which affects visas and work permits for foreign nationals.

What are the Changes?

The Job Creation Law changes the Manpower Utilization Plan, work permits, and application procedures for visas and permits.

Under the Job Creation Law, the list of exemptions for the Manpower Utilization Plan has been expanded. The Manpower Utilization Plan is a preliminary work permit approval. All foreign nationals who plan to work in Indonesia must obtain the work permit approval from the Ministry of Manpower. Previously, foreign nationals who were working as Consular or Diplomatic officers were exempt from the preliminary work permit approval requirement. With the new law, that exemption also applies to directors or commissioners of an Indonesian company who have certain ownership shares, or who are shareholders of an Indonesian company pursuant to applicable regulations and laws. The exemption also applies to essential employees whose company’s production has ceased due to an emergency, or if the employer is in a vocation industry, a research industry, conducting a business visit, or running a start-up company based on technology.

The Job Creation Law also eliminates the requirement for employers to apply for work permits on the basis that a preliminary work permit approval is sufficient. The removal of this requirement was introduced by the government in the Presidential Decree in 2018, and it is now being adopted through the Job Creation Law.

Some permit and visa application procedures are also modified under the Job Creation Law, including the Limited Stay Permit and the biometric data retrieval process. Additionally, the law allows foreign nationals to enter Indonesia with a Visit Visa for investment purposes. A new visa, called the “Second Home” visa, has been introduced under the law. The visa, which is issued in the form of a Limited Stay Visa/Permit, has a 10-year validity with the option to switch to a Permanent Stay Visa/Permit.

The Job Creation Law also expands the list of foreign nationals who can apply for a visa in the absence of a guarantor. Now, foreign nationals who are investing in Indonesia and those who are coming from a country that has a reciprocal agreement with Indonesia for a guarantor may apply for a visa without a guarantor. The current exemption remains for foreign nationals who are married to an Indonesian citizen.

Looking Ahead

The regulations included in the law should be implemented within three months. Several drafts of the regulations are currently publicly available for review and comment. Additionally, details on the concept of an immigration guarantee, which is mandatory for foreign investors in Indonesia, will be provided with the forthcoming regulations.

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Content in this publication is not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an Envoy-affiliated attorney or another qualified professional.

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