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New Regulations for Foreign Workers in Indonesia

New regulations for expat recruitment have been announced

The Indonesian Ministry of Labour has officially announced the different positions and jobs available for foreign employees working in the country.

On 27th August 2019, the ministry issued Regulation No. 228 of 2019 to widen the number of positions open to expatriate workers, consolidate the list of positions into one, and simplify the approval process for foreign workers and their employers.

About 2,000 job titles are listed for expatriates under Regulation 228, across 18 sectors. The updated list covers a range of jobs across 18 industries, as follows:

-Real estate
-Water treatment, waste water treatment, waste management and recycling, and remediation activity
-Transportation and warehousing
-Art, entertainment, and recreation
-Provision of accommodation and meals
-Farming, forestry, and fishery
-Rental and financial lease with option right, manpower, travel agency, and other business support
-Financial activity and insurance
-Healthcare, humanity, and social activity
-Information and telecommunication
-Mining and extraction
-Procurement of electricity, gas, steam/hot water, and cold air
-Large-scale and retail trade, car and motorcycle reparation and maintenance
-Other service activity
-Professional, scientific, and technical activity

The job titles are taken directly from the International Standard Classification of Occupations (ISCO), issued by the International Labor Organization (ILO). The policy will be re-evaluated by the government in two years.

The new regulation was issued as an implementing regulation for the Ministry of Labour Regulation No. 10 of 2018 (“Regulation 10, 2018”), intended to attract highly-skilled foreign employees into Indonesia. Previous regulations regarding foreign workers had been scattered across individual sectors. Construction, information technology, mining, and education are among the sectors wide open for expatriates in the new regulations.

The Ministry of Labour is currently able to approve work permits for foreigners who hold titles or positions that are not listed in Regulation 228, 2019. According to the previous regulation, applicants needed a recommendation from a relevant technical ministry before being approved if their job title did not specifically mention ‘open for foreigners’. The new rules also state that expatriates are still able to hold positions as directors and commissioners (for non-HR roles) in Indonesian companies.

However, some aspects of Regulation 10, 2018 are still kept in Regulation 228, 2019, which includes the rule about foreigners being required have at least five years work experience, and more than eight years for directors and commissioners. They will also be obliged to help transfer their expertise to their Indonesian colleagues or employees.

The government aims to attract highly-skilled and experienced foreign workers to populate the Indonesian workforce. Recently, Indonesia slid to 45th place in the 2018 Global Competitiveness ranking, down from 36th in 2016, with the slide being attributed to the local business community’s preference for informal labour. Many sectors such as construction, banking, engineering, and energy are struggling to find the workers they need due to the skills gap.

Source: ASEAN Briefing
Image: Kitas id

See: Can a Foreigner Buy Property in Indonesia?

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