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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
Did you know that Indonesia is one of the biggest expat hubs in Southeast Asia? According to the country’s Ministry of Manpower, there were over 138,000 foreign workers registered as of October 2023, with increasing demand by both local and foreign-owned companies.
In this article, we will cover everything you need to know about hiring foreigners in Indonesia. We will cover all the essentials including work permits, eligibility criteria, and specific regulations for hiring expats.
Eligibility Criteria for Foreign Workers
While Indonesia has a strong local talent pool, it is sometimes necessary for you to have a foreign worker relocate to the country. This is common for companies who already have an available specialist. If you want to hire foreign workers for your Indonesian company, you must meet specific eligibility criteria as outlined in the regulations set by the Ministry of Manpower:
- Business Registration – Your company must be legally registered in Indonesia as a foreign-owned PT PMA.
- Capital requirements – To hire foreigners, your company must meet minimum capital requirements:
- Medium-sized companies with capital between 500 million and 2.5 billion rupiah can hire foreign workers but may face additional restrictions based on their industry.
- Firms with capital exceeding 2.5 billion rupiah can hire foreign workers under similar rules applicable to foreign-owned entities.
- Foreign Worker Utilization Plan (RPTKA) – This document details the specific work, position, and duration of employment for the foreign worker. It’s essential for obtaining approval from the Ministry of Manpower and is necessary for visa applications.
- Employment Ratio – For every foreign worker hired, there must be at least one local employee in a similar role. This aims to ensure that local workers benefit from training and knowledge transfer from expatriates.
- Job Position Restrictions – Foreign workers can only be employed in positions that cannot be filled by local talent. The roles typically require specialized skills or expertise that are not readily available in the local labor market.
- Work permit and visa requirements
- Work Permit (IMTA) – Often referred to as a “Notification,” this permit is issued by your employer through the Ministry of Manpower, granting you the legal right to work for either an Indonesian or foreign-owned business.
- Work KITAS – All foreign workers must obtain a valid KITAS or a work permit (IMTA) before commencing employment in Indonesia. This permit is contingent upon the approval of the RPTKA and other relevant documentation.
- Compliance with Employment Laws – Companies must adhere to Indonesian labor laws, including those concerning employment contracts, working conditions, and tax obligations.
It is important to note that companies with capital of less than 500 million rupiah are prohibited from hiring foreign workers. Furthermore, certain roles, such as board members or positions related to emergency activities or vocational training in tech startups, may qualify for exemptions from some of these requirements.
How to Hire Foreigners in Indonesia
Under Indonesia’s Employment Law No. 13 of 2003, you can only employ foreign workers if their skills are not readily available in the local workforce. Additionally, businesses must also adhere to employment ratio regulations hiring one local employee for every foreign worker on the payroll.
There are two primary methods for hiring foreigners in Indonesia:
- Establishing a Legal Entity – Companies can set up a foreign investment company (PT PMA) or a representative office. A PT PMA allows for broader business activities and the ability to hire foreign staff legally. However, this process can be lengthy and requires significant capital investment. Read more about PT PMA businesses in Indonesia on our guide.
- Using an Employer of Record (EOR) – If you want to hire employees in Indonesia without setting up a legal entity in the country, for example for outsourcing your overseas back-office, an EOR partner can act as the legal employer within the country. To learn more, take a look at our sister company, RecruitGo’s Indonesian Employer of Record service.
To start the hiring process for foreign workers, you need to submit a Foreign Worker Utilization Plan (RPTKA) to the Ministry of Manpower. Once approved, you must secure a work permit (IMTA) and apply for a Work KITAS for your foreign employee.
Overview of Work Visas in Indonesia
Short-term Business Visas for Foreigners in Indonesia
Short-term visas in Indonesia do not permit formal employment. Instead, they are designed for various business-related activities, such as conducting market research in preparation for potential investments or company expansions. Below are the most common short-term Indonesian visas for business purposes:
| Short-term business visas | Details | Validity |
| Pre-investment visa (D12) | For foreign nationals who intend to explore investment opportunities in Indonesia. This visa allows individuals to conduct market research, attend meetings, and assess potential business ventures before making significant financial commitments. | 180 days per entry, valid for up to 2 years |
| Visa on Arrival (VoA) | Available to citizens from eligible countries and permits a stay of up to 30 days for business purposes, such as attending meetings or conducting official visits. Obtained at major airports and seaports upon arrival in Indonesia, and it costs approximately 500,000 Indonesian Rupiah. | Valid for 30 days with a maximum of 60 days stay. |
| Single-entry visa (A) | Issued for specific business activities and allows foreigners to enter Indonesia for a single visit. Suitable for short-term engagements such as attending conferences or signing contracts. | Single entry 60-180 days |
Long-term Work Visas for Foreigners in Indonesia
There are several visa and long-term residence permits (KITAS) options for foreigners who want to work in Indonesia for an extended period. These stay permits are tailored for different professional needs, whether you aim to work for a local organization, start your own business, or engage in remote work for an international employer:
| Long-term work visas | Details | Validity |
| Work KITAS (E23) | A limited stay permit designed for foreign nationals employed by Indonesian companies. The employer must obtain a work permit (IMTA) from the Ministry of Manpower before the KITAS can be issued. Can be renewed upon expiration, allowing for continued employment in Indonesia. | 6 months-2 years |
| Investor KITAS (E28) | Intended for foreign investors who wish to establish or invest in a business in Indonesia. Must own shares in an Indonesian company for at least Rp 10 billion (~USD 600,000). | 1-2 years, can be extended based on continued investment in the country |
| Remote Worker Visa (E33G) | A new visa option that permits foreign nationals to live in Indonesia while working remotely for employers based outside the country. It is particularly appealing to digital nomads and remote workers seeking a temporary home base in Indonesia. | 1 year, extendable for 1 year |
Emerhub can evaluate you or your candidate’s specific circumstances, including employment status and professional goals to help determine the most suitable work visa in Indonesia. Our team can also assist you throughout the visa application process, by providing support in preparing all the needed documents, submitting them, and communicating with local consulates.
Want to hire foreigners in your company? Fill in the form and let our experts help turn the complexities of hiring into an exciting opportunity for growth and innovation in Indonesia!
