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Jakarta Post

Govt eases rules for hiring foreigners

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Thu, October 29, 2015   /  06:01 pm

The government has relaxed requirements for foreign investment distribution companies (PMA) to hire foreign employees in an attempt to attract more investment to the country.

Ministerial Regulation No. 35/2015, in effect since Friday, revises Ministerial Regulation No. 16/2015 on procedures for the employment of foreign workers.

Previously, the government required all foreign companies to employ 10 Indonesian workers for every foreign worker in a bid to provide more opportunities for local workers.

The Manpower Ministry said the previous policy had made foreign investors think twice about investing in Indonesia.

'€œThe new policy can hopefully attract more investment to Indonesia,'€ the ministry'€™s directorate general for workers'€™ training and plotting (Binapenta), Hery Sudarmanto, said on Wednesday.

Although the policy seems to open the door for more foreign workers, Hery was of the opinion that it would widen job opportunities for locals as well.

'€œMore investment means more job opportunities, including for local workers. We don'€™t need to instruct them [to recruit domestic workers] anymore,'€ Hery said.

The new regulation also no longer requires expatriate employment permits (IMTA) from foreigners working in Indonesia for less than a month.

Therefore, foreigners on business in Indonesia for just a few days or even a few hours, such as for holding seminars or conducting training, will be able to go back and forth as they wish.

Foreigners who have companies in Indonesia and take positions on the board of commissioners or as president directors but live outside of Indonesia also do not need IMTAs.

'€œThis will make it more comfortable for them to conduct their activities in Indonesia,'€ Hery said.

The new regulation still requires foreign companies employing foreign workers in Indonesia to pay into the foreign workers utilization compensation fund (DKP-TKA), but allows them to do so in US dollars.

'€œNow they can pay the compensation in dollars. No need to exchange it to rupiah,'€ Hery said, adding that the amount of the payment remained the same at US$100 per month. He said those employing foreigners for less than a month were also required to pay.

Hery further said the revision followed complaints from expatriates and foreign businessmen that the previous regulations made it unattractive for them to invest in the country.

'€œIf we tighten restrictions on expatriates, investment will be hampered. Now they actually can create more jobs for locals, because they will need workers in upstream sectors.'€

Manpower Minister Hanif Dhakiri said the new regulation would ensure faster and simpler procedures for foreign workers to get work permits, as the entire process could be conducted online.

Ministry records show that there were around 68,500 foreign workers holding IMTAs in Indonesia in 2014, lower than the 2012 figure of 72,427. Citizens of China, Japan, South Korea, India and Malaysia dominated the ranks of foreign employees.

The 2014 data also show that 21,751 expatriates were categorized as professionals and 15,172 as advisers or consultants, while almost 14,000 served as managers, 9,879 as directors, 6,867 as supervisors and 1,101 as commissioners. (foy)

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