logo-ahplogo-ahplogo-ahplogo-ahp
  • Home
  • Firm
    • About Us
    • Careers
  • Solutions
      • Banking & Finance
      • Capital Markets
      • Competition Law
      • Debt & Corporate Restructuring
      • Dispute Resolution
      • Energy, Oil & Gas
      • Foreign Direct Investment
      • Fraud & Forensics Investigation
      • Intellectual Property
      • Islamic Finance
      • Labor Law
      • Mergers & Acquisitions
      • Projects & Natural Resources
      • Real Estate & Property
      • Shipping & Aviation
      • Tax & Customs Services
      • Telecommunications & Media
  • Members
  • News & Events
    • News & Insights
  • Rajah Tann Asia
✕
            No results See all results

            Manpower Ministry Moves to Liberalize Rules Governing Expat Employees and Corporate Officeholders

            As part of its rolling deregulation and economic reform program, the Government (through the Ministry of Manpower) has issued Minister of Manpower Regulation No. 35 of 2015 (“Reg. 35”) to roll back some of the more burdensome requirements governing the employment of expatriate manpower and appointment of expatriate, non-resident corporate officeholders that were introduced by Minister of Manpower Regulation No. 16 of 2015 (“Reg. 16”), which was issued on 29 June 2015. Reg. 35 came into effect on 23 October 2015.

            The key changes introduced by Reg. 35 are as follows:

            1.    The abolition of the requirement that an employer of expatriate manpower must employ 10 Indonesians for every expatriate on the payroll.
            2.    An Expatriate Employment Permit (“IMTA”) is no longer required for expatriate directors, commissioners (or equivalent thereof) who are non-resident in Indonesia.
            3.    An IMTA is no longer required in the case of expatriates who travel to Indonesia on a short-term basis for the following purposes:

            •    Providing guidance and training in connection with industrial technology applications or innovations related to improvements in industrial product design and quality, and collaboration as part of efforts to market Indonesian products overseas.
            •    Delivering lectures;
            •    Attending meetings organized by head office or a representative office in Indonesia;
            •    Competency assessment; and
            •    One-off jobs.

            However, an IMTA continue to be required for:

            •    Production of a commercial film (that has been licensed/approved by the relevant authority);
            •    Conducting of audits, quality control, or inspections at a branch office in Indonesia; and
            •    Work related to the installation of machinery, electrical installation, after-sales service, and product feasibility assessments.

            Reg. 35 also imposes a new prohibition on the employment of expatriates as members of the Supervisory Board (Board of Commissioners) of a company categorized under Indonesian investment law as a “domestic direct investment company.”

            The 10 : 1 Indonesian-expatriate ratio introduced by Reg. 16 (see point 1 above) was controversial from the outset, not least because it appeared to lack a clear statutory basis. Prior to Reg. 16, the Investment Coordinating Board (“BKPM”) had applied its own ratio of 3 : 1 pursuant to BKPM Regulation No. 5 of 2013. However, this requirement was revoked in October by BKPM Regulation No. 15 of 2015. Consequently, there is currently no Indonesian-expatriate employee ratio requirement. However, it should be remembered that this situation could change at any time, depending on BPKM policy.

            ***

            AHP Client Alert is a publication of Assegaf Hamzah & Partners. It brings an overview of selected Indonesian laws and regulations to the attention of clients but is not intended to be viewed or relied upon as legal advice. Clients should seek advice of qualified Indonesian legal practitioners with respect to the precise effect of the laws and regulations referred to in AHP Client Alert. Whilst care has been taken in the preparation of  AHP  Client Alert, no warranty is given as to the accuracy of the information it contains and no liability is accepted for any statement, opinion, error or omission.

            Download

            More Articles

            • Managing Greenwashing Risk: A Southeast Asian Lens
              May 31, 2023
            • Resolving Construction Disputes through Dispute Adjudication Boards under Indonesian Law
              May 31, 2023
            • BUMN Omnibus Regulations Highlights Special Assignment and Environmental Social Responsibility Programs
              May 25, 2023
            • Regional Competition Bites Q1 2023
              May 24, 2023
            • How KPPU’S New Guidelines Use Data and Quantitative Approach to Enforce Antitrust Measures
              May 17, 2023
            • Assegaf Hamzah & Partners Takes Top Honours at Three Prestigious Legal Awards
              May 15, 2023
            • Constitutional Court Rulings Illuminate Certain Provisions of the PDP Law
              May 4, 2023
            • New KPPU Case Handling Procedure May Allow Dismissal of Anti-Competition Investigation Based on Change of Behaviour
              April 17, 2023
            • New Regulations Relax Criteria for Foreign-To-Foreign Merger and Charge Filing Fees for Merger Notification
              April 12, 2023
            • OJK Sets New Cyber Security Best Practices for the Banking Industry
              April 6, 2023
            By Practice Area
            • Projects & Energy
            • Technology Media & Telecommunications
            • Intellectual Property
            • Real Property
            • Banking & Finance
            • Capital Markets
            • Competition
            • Mergers & Acquisitions
            • Dispute Resolution
            • Tax and Customs

            Jakarta Office

            Capital Place, Level 36 & 37
            Jalan Jenderal Gatot Subroto Kav. 18
            Jakarta 12710,
            Indonesia

            Phone: +62 21 2555 7800
            Fax: +62 21 2555 7899
            Email: info@ahp.id


            Subcribe

            Surabaya Office

            Pakuwon Center, Superblok Tunjungan City
            Lantai 11, Unit 08
            Jalan Embong Malang No. 1, 3, 5,
            Surabaya 60261
            Indonesia

            Phone: +62 31 5116 4550
            Fax: +62 31 5116 4560

            Assegaf Hamzah & Partners


            © 2001 - 2023 Assegaf Hamzah & Partners. All rights reserved.

            Rajah & Tann Asia is a network of legal practices based in Asia.

            Member firms are independently constituted and regulated in accordance with relevant local legal requirements. Services provided by a member firm are governed by the terms of engagement between the member firm and the client.

            This website is solely intended to provide general information and does not provide any advice or create any relationship, whether legally binding or otherwise. Rajah & Tann Asia and its member firms do not accept and fully disclaim, responsibility for any loss or damage which may result from accessing or relying on this website.