ANNOUNCEMENT 11 Jul 2014

In July 2014, the government of Indonesia announced a change for the labour market access of foreign workers.

NUMBER OF INTERVENTIONS

1

  • 0 harmful
  • 0 neutral
  • 1 liberalising
Inception date: 11 Jul 2014 | Removal date: open ended
Still in force

Labour market access

On 11 July 2014, the Indonesian President announced Decree nr. 72, which allows foreigners under certain circumstances to occupy senior positions in Indonesian companies. Prior to the change, foreigners were only allowed to occupy such positions in firms with at least partial foreign ownership.
The conditions attached to his liberalisation include:

  • prioritizing the use of Indonesian employees in all available positions; only in case no suitable Indonesian candidate is found, can a foreigner acquire the position (art. 4 of Presidential Decree nr. 72/2014);
  • every company hiring a foreign employee must obtain a Foreign Employment Plan (RPTKA) from the Labour Ministry (art. 5) which has to be renewed every five years (art. 7); the RPTKA is not needed for foreign missions, governmental agencies and international organisations (art. 6);
  • after obtaining the RPTKA, the Ministry of Labour requires a separate work permit (IMTA) for every foreign staff member each year (art. 8 & 9);
  • each foreign employee should have Indonesian understudies or trainees who benefit from the transfer of knowledge and skills either in Indonesia or overseas (art. 11-13);
  • certain positions mentioned in Ministry of Manpower & Transmigration regulations (cf. Related Measures) - especially human resources related - remain off limits to foreigners. 
 

AFFECTED SECTORS

 
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AFFECTED PRODUCTS

 
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