Regulations Foreign Workers and Indonesian Workers
TERMS OF EMPLOYING FOREIGNERS
Based on Government Regulation Number 34 of 2021 concerning the Use of Foreign Workers (“PP No. 34 of 2021) Jo. Permenaker Number 8 of 2021, basically there are several stages in transferring technology and expertise (transfer of knowledge). The stages include:
- Employers of foreign workers who will employ foreign workers must first appoint TKIs as assistant workers for foreign workers who are indeed employed for technology transfer and transfer of expertise from foreign workers;
- After being appointed, the Foreign Worker Assistance is given education and job training in accordance with the qualifications of the position occupied by the foreign worker, namely through the transfer of the foreign worker’s ability by utilizing and mastering the science and technology required to carry out the position;
- The Foreign Workers Assisting Personnel who take part in the education and job training will receive education and job training certifications, and/or competency certificates;
- Employers of foreign workers are required to report annually to the Minister or a designated official regarding the transfer of technology and transfer of skills from foreign workers to the Assistant Workers of Foreign Workers.
Based on the points above, it can be understood that every company that employs foreign workers is required to have Indonesian workers to accompany them in carrying out the work.
PROVISIONS ON THE COMPARISON OF TKA AND TKI
(Government Regulation Number 34 of 2021 concerning the Use of Foreign Workers)
- Every Employer of Foreign Workers is obliged to prioritize the use of Indonesian workers in all types of positions available.
- In the event that the position as referred to in paragraph (1) cannot be occupied by Indonesian workers, the position can be occupied by foreign workers.
- The use of foreign workers as referred to in paragraph (2) is carried out by taking into account the conditions of the domestic job market.
Based on the contents of the article in the regulation above, it can be concluded that any plan to use manpower, if you want to use foreign workers, must first prioritize TKI.
(Regulation of the Minister of Manpower of the Republic of Indonesia Number 16 of 2015 concerning Procedures for the Use of Foreign Workers)
- Employers of TKA who employ 1 (one) TKA must be able to absorb TKI of at least 10 (ten) persons in the company that employs TKA.
- The provisions as referred to in paragraph (1) do not apply to: members of the Board of Directors, members of the Board of Commissioners or members of the Trustees, members of the Management, or members of the Supervisory Board.
- Foreign workers are employed for emergency and urgent work.
- Foreign workers are employed for temporary work.
- Foreign workers employed for impresario service business.
Based on the contents of the article in the regulation above, it can be concluded that each use of foreign workers must be able to employ more Indonesian workers than the use of foreign workers in the company.
REQUIREMENTS FOR EMPLOYING TKI AS A COMPANION FOR TKA
- Education and on-the-job training for TKA Assistance Workers shall be carried out in accordance with the qualifications of the position occupied by the TKA.
- Position qualification as referred to in paragraph (1) is the level of expertise that must be mastered, the level of education that must be achieved, and work experience that must be possessed by Indonesian workers to be able to occupy positions occupied by foreign workers.
- Position qualifications include elements of work skills and expertise, work knowledge, formal education (general and specific), training (type and duration), work experience, mastery of language, physical requirements, talents, personality and interests, competencies, and other requirements.
Education improvement can be carried out by assigning Foreign Workers Assistance to attend certain educational strata programs in accordance with the minimum educational qualifications for positions occupied by foreign workers.
- Skills improvement can be carried out by assigning Foreign Workers Assisting Workers to participate in job training programs in accordance with the minimum competency qualifications for positions occupied by foreign workers.
The implementation of education and job training for Foreign Workers Assisting Workers can be carried out at home and/or abroad.
Education for Foreign Workers Assisting Workers is carried out at the lowest educational institution accredited B and the graduation certificate is recognized by the government.
On-the-job training for TKA Assistance Workers is carried out at the lowest training institution accredited B and obtains a competency certificate from a licensed professional certification body.
Foreign Workers Assisting Personnel who take part in education and job training will receive education graduation certificates and training certificates and/or competency certificates in accordance with the provisions of laws and regulations.
In general, the requirements related to TKI who accompany foreign workers are:
Attend formal education both general and special according to the position of the foreign worker.
- Participate in training in accordance with the qualifications for the position of TKA.
- Have work experience according to the position occupied by the TKA.
- Have a good command of the language.
- Have other competencies in accordance with the position of TKA.
The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.
Limited Stay Permit (KITAS) Regulations Update 2023
The Benefits of Applying for Investor KITAS in Indonesia
The Investor KITAS in Indonesia – A Comprehensive Guide
Retirement Kitas in Indonesia: Everything You Need to Know Before Apply
Visa Extension Made Easy: What You Need to Know Before Extending Your Stay Permit in Indonesia?
In general, PMA stands for Foreign Direct Investment while PMDN stands for Domestic Direct Investment. From the perspective of the meaning, in short, PMA is an investment activity to conduct business in the territory of the Republic of Indonesia which carried out by foreign investors, both those who use foreign capital wholly or in joint ventures with domestic investors. Then, PMDN is an investment activity to conduct business in the territory of the Republic of Indonesia which carried out by domestic investors using domestic capital.
Basically, subjects in domestic investors are Indonesian citizens (WNI), Indonesian business entities, the Government of Indonesia, or regions that make investments in the territory of Indonesia. Meanwhile, foreign investors are foreign citizens, foreign business entities, and/or foreign governments making investments in the territory of the Republic of Indonesia.
With the new regulations and system changes, the process of establishing a company, both PT PMDN or PT PMA, does not take a long time. It takes at least 10-15 working days after the complete document requirements are fulfilled.
Yes. To be able to carry out the establishment process of PT PMA, the authorized capital that must be written in the deed of establishment is Rp. 10 billion excluding the value of land and buildings. In making the deed of establishment, the Notary appointed by us will provide a statement letter to the shareholders who sign that they will deposit the said amount of capital. However, the statement will usually not include the fulfillment period. After the company is established, the company will carry out investment reporting on a regular basis which will later become one of the proofs for the company's activities with its capital.
Generally, the set-up company process is divided into 2 stages. Where, the first stage is the establishment stage. Where at this stage, you will process your company's basic documents and permits, such as: deed of establishment, legalization document, Company NPWP (Taxpayer ID Card), Business Identification Number, Company Bank Account Opening and other documents according to your sector and business field. Furthermore, the second stage is the operational stage. At this stage, before and/or during your company's operations, you are required to fulfill the company's obligations. Such as, payment of related taxes, fulfilling operational permits, reporting LKPM (Investment Activity Report), BPJS Employment and Health Registration, and other obligations according to the sector and business field.
BPJS stands for Social Security Administering Board, which is a special institution tasked with administering health and employment insurance for the public, civil servants, and private employees. BPJS has 2 types, namely: BPJS Healthcare and BPJS Employment. Where every registered company that has employees is required to register its employees in the BPJS program, both BPJS Healthcare and BPJS Employment.
LKPM stands for Investment Activity Report. It is a report on the progress of investment realization and problems faced by business actors that must be prepared and submitted periodically.
Yes, you do. When you do the establishment of a company, a correspondence address is fundamental. It is needed because later all correspondence documents from the government or related agencies will be sent to your company's office/correspondence address. In addition, a company is required to have a domicile which is one of the requirements for making a deed of establishment.
Do you have a location in mind where you plan to establish your company in general? For example, are you planning to do it in Bali, such as in Kuta, Ubud, Sanur or Jimbaran area? We have several specific place references that may help you determine the location of your company office. Just please let us know.
At the stage of the company establishment process, you are not required to come to Indonesia. Although it is no required to come, you may visit Indonesia with the visa which the service we can assist you to have it.
Some process in the establishment company can be carried out by giving your power of attorney to one of our team whom handles the process of establishing your company. Our team is experienced enough in their field therefore the necessary matters will be prepared and informed to you.