Hiring Foreign Nationals in Indonesia: Work Permits, Visas, Compensation for Employing Foreign Workers (DKPTKA) and Key Restrictions
Updated: 1 day ago
Indonesia's economy continues to attract foreign investment, and with it, a growing need for skilled expatriate talent. But bringing a foreign national onto the payroll in Indonesia is not a matter of issuing an offer letter and booking a flight. It is a multi-layered regulatory process spanning three separate government functions: manpower, immigration, and tax/compliance, each with its own approvals, fees, and ongoing obligations. In Indonesia, a foreign worker may only be employed by an authorized employer under an employment relationship for a specific position and a specified period and must possess the competencies required for the position to be occupied.
Under the Indonesian framework, a tenaga kerja asing (TKA) is essentially a foreign national holding a visa for the purpose of working in Indonesia. Hiring a foreign national is not the same as hiring an Indonesian employee. Indonesia regulates both the employment of foreign workers and their immigration status. Employers must therefore ensure that the foreign national has the appropriate employment authorization, visa and residence permit before commencing work. If the individual will perform ongoing work for an Indonesian employer, the company should determine the applicable TKA and immigration requirements before the individual begins working.
Which Types of Employers Can Employ Foreign Workers?
According to Article 3 of Government Regulation No. 34 of 2021 on the Utilization of Foreign Workers (“GR 34/2021”), employers eligible to employ foreign workers include government institutions, foreign diplomatic missions, international organizations, foreign trade and company representative offices, foreign investment companies, Indonesian legal entities such as limited liability companies and foundations, social and cultural institutions, talent agencies, and other business entities authorized under applicable laws to employ foreign nationals. Another important thing to note is that GR 34/2021 prohibits individual employers to employ foreign workers.
What are The Required Qualifications of Foreign Employees?
Minister of Manpower Regulation No. 8 of 2021 on the Implementing Regulation for Government Regulation No. 34 of 2021 regarding the Utilization of Foreign Workers (“MoM Regulation 8/2021”) governs that each foreign worker employed by an authorized employer must meet the following requirements:
hold educational qualifications relevant to the position to be occupied;
possess the competence or at least five years of relevant work experience corresponding to the qualifications required for the position; and
transfer their knowledge and expertise to an Indonesian worker designated as their counterpart or accompanying employee.
In regard to point 3 above, GR 34/2021 provides an exemption from fulfilling the aforementioned requirement for foreign workers (TKA) employed as directors, commissioners, head of a representative office, foundation supervisors, administrators, and supervisory board members, and foreign workers employed for temporary work.
What are The Legal Requirements for Employing Foreign Workers in Indonesia?
Employers of foreign workers must appoint an Indonesian counterpart to facilitate the transfer of technology and expertise, provide relevant training, facilitate Indonesian language training for the foreign worker, and repatriate the foreign worker upon termination of employment. These obligations generally do not apply to directors and commissioners, heads of representative offices, foundation officers and supervisors, or foreign workers engaged for temporary assignments.
Are There Any Restrictions?
The Ministry of Manpower prohibits a foreign employee to take up a role in personnel management. The prohibition applies to the functions actually performed, rather than the individual’s job title. Accordingly, a position does not fall outside the restriction merely because its title does not reference human resources if, in substance, its duties involve personnel matters. In addition to the aforementioned restriction, individuals are prohibited from employing foreign nationals.
Rencana Penggunaan Tenaga Kerja Asing (RPTKA) or Foreign Worker Utilization Plan
The principal employment authorization is the Rencana Penggunaan Tenaga Kerja Asing (RPTKA), or Foreign Worker Utilization Plan. As a general rule, an employer that intends to employ a TKA must obtain RPTKA approval from the Minister of Manpower or the authorized official.
The RPTKA application must be submitted electronically by the employer through the TKA Online system. Applications for 50 or more foreign workers are submitted to the Director General, while applications involving fewer than 50 foreign workers are submitted to the Director.
The applicable RPTKA category depends on the employer’s legal status, the nature of the foreign worker’s assignment, and the intended duration of employment in Indonesia. The available RPTKA categories, according to MoM Regulation 8/2021, include:
RPTKA for Temporary Work;
RPTKA for Work Exceeding Six Months or Work;
RPTKA for work in Special Economic Zones (SEZs); and
RPTKA Exempt from DKPTKA.
The validity period of an RPTKA Approval depends on its category. A Temporary RPTKA Approval may be issued for a maximum of six months and cannot be extended. By contrast, RPTKAs exceeding six months in duration and Non-DKPTKA RPTKAs may be granted for up to two years and are extendable. An SEZ RPTKA may be valid for up to five years and may also be extended. For an SEZ RPTKA issued to a member of a company’s Board of Directors and/or Board of Commissioners, however, the approval is granted only once and remains valid for the duration of the foreign worker’s employment. Pursuant to MOM Regulation 8/2021, any extension of an RPTKA Approval must be applied for no later than 30 days before the approval expires.
The RPTKA sets out key details of the proposed employment, including the employer’s justification for engaging foreign personnel, the position to be occupied, the duration and location of employment, and, where applicable, the Indonesian counterpart who will work alongside the foreign worker.
In applying for RPTKA approval, employers must submit supporting documentation. Under Article 12(3) of GR 34/2021, the required documents include, among others:
an application letter;
the employer’s Business Identification Number (Nomor Induk Berusaha or “NIB”) and/or business license;
the employer’s deed of establishment and relevant approval of incorporation and/or amendments issued by the competent authority;
evidence of mandatory manpower reporting;
a draft employment agreement or other applicable agreement;
the company’s organizational structure;
a statement confirming the appointment of an Indonesian counterpart for the foreign worker;
a statement confirming the implementation of education and training for Indonesian employees in accordance with the qualifications of the position held by the foreign worker; and
a statement confirming that the employer will facilitate Indonesian language education and training for the foreign worker.
The process of the issuance of RPTKA generally involves the following stages:
Registration of the employer and creation of a TKA Online account;
Submission of the RPTKA application and required supporting documents;
Eligibility assessment of the RPTKA application;
Submission of the prospective foreign worker’s information and supporting documents;
Issuance of the notification for payment of DKPTKA; and
Issuance of the RPTKA approval.
Following approval of the RPTKA, the employer must proceed with the applicable immigration and compensation requirements, including obtaining the Limited Stay Visa (Visa Tinggal Terbatas or “VITAS”) and Limited Stay Permit (Izin Tinggal Terbatas or “ITAS”), as applicable, and paying the Foreign Worker Compensation Fund (Dana Kompensasi Penggunaan Tenaga Kerja Asing or “DKPTKA”) in accordance with the prevailing regulations.
An RPTKA may be extended, provided that the employer submits the extension application no later than 30 working days before the current RPTKA expires.
Who Are Exempted from The RPTKA Requirement?
The approval of an RPTKA is not required for certain categories of foreign workers. These include directors or commissioners who meet the applicable share ownership requirements, or shareholders as provided under the prevailing laws and regulations; diplomatic and consular personnel working at foreign diplomatic missions; and foreign workers required by an employer for certain activities, such as production activities that have been disrupted due to an emergency, vocational activities, technology-based start-up companies, business visits, and research for a limited period.
For foreign workers engaged in technology-based start-up companies or vocational activities for a limited period, the employer must submit the prospective foreign worker's information electronically to the Minister of Manpower or the designated official. The positions that may be occupied by foreign workers in technology-based start-up and vocational activities are determined by the Minister after obtaining input from the relevant ministries or government agencies.
The Minister or designated official will then electronically submit the prospective foreign worker's information to the minister responsible for governmental affairs in the field of law and human rights, or the designated official, as a recommendation for the issuance of a visa and residence permit for employment purposes.
The exemption for foreign workers engaged in technology-based start-up companies or vocational activities is limited to a maximum period of 3 (three) months. If the employer intends to employ the foreign worker beyond this period, the employer must obtain an RPTKA approval. Where the three-month period is about to expire and the employer intends to continue employing the foreign worker, the employer must submit an application for RPTKA approval no later than 2 (two) weeks before the expiry of the foreign worker's permitted employment period.
IMTA vs. RPTKA: What Are The Differences?
A Foreign Worker Employment Permit (Izin Mempekerjakan Tenaga Kerja Asing or “IMTA”) was formerly required for employers to legally employ foreign workers after obtaining RPTKA approval. The IMTA has since been replaced by the Notification system following an RPTKA, under which employers submit a Notification to the Ministry of Manpower following RPTKA approval. In short, the requirement for an IMTA has been absorbed by RPTKA.
The RPTKA sets out the employer’s plan and justification for employing foreign workers, including the position, employment period, and work location. In general, the process involves: (1) obtaining RPTKA approval, (2) submitting the Notification, (3) applying for the relevant VITAS, where required, and (4) obtaining an ITAS/KITAS after entering Indonesia.
Dana Kompensasi Penggunaan Tenaga Kerja Asing (DKPTKA) or Compensation for Employing Foreign Workers
Dana Kompensasi Penggunaan Tenaga Kerja Asing (DKPTKA) means the compensation that must be paid by an employer of foreign workers for each foreign worker employed. MoM Regulation 8/2021 stipulates that employers of foreign workers are required to pay DKPTKA at a rate of US$100 per position, per foreign worker, per month, as Non-Tax State Revenue (PNBP) or regional revenue in the form of a regional levy. It is important to note that the DKPTKA is paid upfront/in advance.
Employers of foreign workers are required to pay the DKPTKA for each foreign worker they employ. The payment is calculated based on the foreign worker’s period of employment in Indonesia and must be made after the employer receives the relevant billing code from the Ministry of Manpower or its designated official. The billing code is issued once the prospective foreign worker’s information and supporting documents have been verified as complete. Where a foreign worker is employed for a period of less than one month, the employer is required to pay the DKPTKA amounting to one full month.
Payment of DKPTKA is a prerequisite for RPTKA approval. Depending on the type and location of the foreign worker’s employment, DKPTKA is treated either as Non-Tax State Revenue (PNBP) or as regional revenue in the form of a regional levy. For example, DKPTKA for a new RPTKA, certain extensions involving work across multiple provinces, and employment in Special Economic Zones (SEZs) constitutes PNBP. For certain RPTKA extensions, the payment constitutes provincial or regency/municipal revenue depending on the location of the foreign worker’s employment.
Payments classified as PNBP are made through an authorized bank designated by the Minister of Manpower, while payments constituting regional revenue are made through a bank designated by the relevant regional government.
Certain employers are exempt from the obligation to pay DKPTKA. These include:
government institutions;
foreign diplomatic missions;
international organizations;
social institutions;
religious institutions; and
certain positions within educational institutions, as determined by the Minister of Manpower following input from the relevant education authority.
Work Visa and Izin Tinggal Terbatas (ITAS) or Limited Stay Permit
Every foreign worker employed in Indonesia must hold a valid stay permit in accordance with the applicable immigration laws and regulations. The type of stay permit and the procedure for obtaining it are subject to the prevailing immigration framework.
A TKA must obtain the appropriate work and stay authorization for the duration of their employment in Indonesia, which, in most cases, involves obtaining a Visa Tinggal Terbatas (“VITAS”) and Limited Stay Permit (Izin Tinggal Terbatas or ITAS). Before an ITAS can be obtained, the employer must first secure approval of the RPTKA from the Ministry of Manpower. Following its approval, the RPTKA serves as the basis for the recommendation and subsequent application for the ITAS through the TKA Online system.
The approved RPTKA also serves as a recommendation for the foreign worker to obtain the appropriate visa and stay permit for employment purposes. Following RPTKA approval, the Ministry of Manpower or its designated official submits the prospective foreign worker’s information electronically to the relevant immigration authority to support the issuance of the required work-related visa and stay permit.
Pursuant to Article 39 of Law No. 6 of 2011 on Immigration, as most recently amended by Law No. 63 of 2024 (the “Immigration Law”), a Limited Stay Visa (Visa Tinggal Terbatas or “VITAS”) may be granted to foreign nationals who intend to reside in Indonesia for a limited period, including foreign nationals who intend to work in Indonesia. The VITAS subsequently serves as the basis for obtaining a Limited Stay Permit (Izin Tinggal Terbatas or “ITAS”), which authorizes the foreign national to reside in Indonesia. Different visa classifications are available depending on the nature of the work to be performed.
Once the relevant immigration requirements have been fulfilled, the foreign worker must obtain the appropriate Limited Stay Visa (before entering Indonesia. The application is generally supported by the required employment and immigration documents, including the approved RPTKA and other applicable supporting documentation.
Upon entering Indonesia using the VITAS, the foreign worker will subsequently obtain a Limited Stay Permit. The ITAS serves as the foreign worker’s authorization to reside in Indonesia for the approved period and must correspond with the purpose and activities for which the relevant immigration authorization was granted. The foreign worker may also be granted a Multiple Exit Re-entry Permit (“MERP”), which allows the holder to leave and re-enter Indonesia multiple times during the validity of their stay permit without having to obtain a new visa or stay permit for each departure and re-entry.
ITAS Validity and Extension
The validity period of an ITAS depends on the purpose of the foreign national’s stay and the applicable visa classification. For foreign workers, the duration of the ITAS should generally correspond to the approved purpose and period of stay under the relevant immigration and employment approvals.
Where permitted under the applicable immigration regulations, an ITAS may be extended before its expiry, allowing the foreign worker to continue residing and working in Indonesia without having to leave the country and apply for a new visa. Employers and foreign workers should therefore monitor the validity of both the relevant employment authorization and immigration permits, as an extension of the ITAS may require the renewal or continued validity of the underlying supporting documents.
Insurance and National Security Program Requirement
Article 8 of GR 34/2021 requires foreign workers employed in Indonesia for less than six months to be covered by an insurance program that provides, at a minimum, protection against work-related accidents. For foreign workers employed for more than 6 (six) months, the employer must enroll the foreign worker in the national security program. This requirement represents a new obligation that was not expressly provided under the previous regulatory framework.
Annual Reporting Obligations
Employers employing foreign workers in Indonesia must submit an annual report to the Ministry of Manpower concerning the utilization of foreign workers, which covers the implementation of the foreign workers’ employment, education and training provided to Indonesian counterpart employees, and the transfer of knowledge and technology by foreign workers to their Indonesian counterparts. In addition, employers must notify the Ministry of Manpower upon the completion or termination of a foreign worker’s employment relationship.
Final Notes
Hiring foreign nationals in Indonesia involves more than obtaining a work visa. Employers generally need to secure RPTKA approval, pay the applicable DKPTKA, obtain the appropriate visa and ITAS, and ensure compliance with requirements on qualifications, position restrictions, and knowledge transfer.
Employers should therefore assess and complete the required manpower and immigration processes before the foreign worker starts working. Keeping up with reporting, insurance, and other ongoing obligations is also essential to ensure continued compliance throughout the employment period.
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END NOTE: This article is intended for informational purposes only and should not be construed as legal advice or a legal opinion. Specific cases require specific advice, and the content provided herein may not be applicable in all situations. Legal regulations and interpretations can vary widely and may change over time, necessitating consultation with legal experts. If you require specific legal advice or guidance, please contact a qualified legal professional. It is crucial to consult with legal experts before applying the information in this article to ensure compliance with current legal standards and requirements.
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