Hiring a foreign worker in Indonesia necessitates compliance with various regulations. One crucial requirement is obtaining the Foreign Worker Utilization Plan (RPTKA), a document detailing the company’s plan for employing foreign workers, including their roles, qualifications, and duration of employment.
To secure an RPTKA, employers must apply to the Ministry of Manpower, providing comprehensive information about the foreign worker and the company’s needs. It’s essential to consult with legal and immigration.
You may also know that Indonesia is increasingly becoming a hub for international business and global talent from many different countries.
Thus, if you plan to hire foreigners, this guide will help you.
What do Foreign Worker Need to Work in Indonesia
To legally work in Indonesia or to have a business operations representative in Indonesia, foreigners must comply with specific requirements set by the Ministry of Manpower (MOM). Key prerequisites include:
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Work Visa and KITAS
A Limited Stay Permit Card (KITAS) is necessary for foreign nationals working in Indonesia for an extended period.
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RPTKA
Employers must submit an approved RPTKA before hiring any foreigner. This document ensures regulatory compliance and allows employers to apply for the required work visas.
Understanding RPTKA and Why is it Essential?
RPTKA is a legal requirement that helps ensure compliance with Indonesian labor laws, but it also serves as a practical tool for employers. Here’s more about it:
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Defining RPTKA and Its Purpose
The RPTKA, or Foreign Worker Utilization Plan, is a document issued by the Ministry of Manpower (MOM) in Indonesia. It acts as a guide for hiring foreign nationals, including their responsibilities, length of employment, and requirements.
Essentially, the RPTKA is needed to obtain other permits, such as the KITAS (Limited Stay Permit) and VITAS (Limited Stay Visa).
Overall, the RPTKA has two key functions: ensuring that foreign worker recruitment complies with Indonesian labor laws and providing businesses with a clear framework to support their hiring decisions.
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Importance of RPTKA in Compliance and Workforce Planning
Compliance with labor laws is perhaps the most significant reason why the RPTKA is mandatory.
Employers that comply with Indonesian legislation are less likely to face penalties or suspension of work licenses.
This compliance is especially crucial given Indonesia’s strict enforcement of its labor policies from the Ministry of Manpower. In this case, the procedure of employing expatriates or foreigners is regulated under several laws:
Beyond compliance, it aids in smart labor planning. It guarantees that international staff are effectively incorporated into local teams, promoting skill transfer and knowledge exchange.
Types of RPTKA for Different Employment Needs
Whether you’re planning for short-term projects or long-term assignments, knowing which type of RPTKA to apply for can simplify the process and help avoid potential issues with regulations. Here are the categories:
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Temporary RPTKA (Up to Six Months)
It is designed for short-term employment needs, valid for up to six months, and cannot be extended.
This type of RPTKA is typically used for specific activities such as production quality control, filming projects, or machinery installation.
Overall, this option is perfect for businesses with short-term projects that need specialized foreign knowledge because it is easier and makes sure that businesses can meet short-term needs without making long-term commitments.
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Extended RPTKA (Over Six Months)
For employment exceeding six months, the Extended RPTKA is a better fit. This plan is valid for up to two years and may be extended, making it ideal for long-term projects or tasks that need a higher degree of competence.
It is commonly used in industries where expats or foreigners provide essential skills or knowledge transfer to local teams.
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Non-DKPTKA RPTKA
Meanwhile, Non-DKPTKA RPTKA is designed for occupations that are excluded from the Compensation Fund for Foreign Worker Utilization (DKPTKA).
This category includes some occupations, such as diplomatic posts or personnel in educational and social groups. It is a cost-effective solution for firms working in these industries.
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SEZ RPTKA for Special Economic Zones
As the name implies, SEZ RPTKA is intended for businesses operating in Indonesia’s Special Economic Zones (SEZs).
This kind provides flexibility, with a validity period of up to five years and the opportunity to extend.
It is suitable for firms that want to take advantage of SEZ perks including tax breaks and easier hiring procedures for foreign employees.
Steps for Applying for RPTKA
While the method may seem difficult at first glance, breaking it down into manageable parts will help to simplify the process and assure compliance with Indonesian labor rules. Here are the overall steps:
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Application Submission and Approval Process
The first step is to apply online via the Ministry of Manpower’s website (https://tka-online.kemnaker.go.id/).
Employers must provide appropriate documents in this scenario, such as job descriptions, corporation information, and foreign employees’ credentials.
The Ministry of Manpower (MOM) will conduct an RPTKA appropriateness review upon submission to ensure that the data and documents are accurate and thorough.
The MOM typically considers the application within two business days after the test.
The MOM approves the RPTKA and allows the application for a work permit and visa to continue if all requirements are met.
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Payment of DKPTKA and Conditions
After the MOM approves the RPTKA, employers must pay the compensation fund known as Dana Kompensasi Penggunaan Tenaga Kerja Asing or DKPTKA.
The fee is USD 100 per month and must be paid in advance for the entire approved duration of the foreigner’s work employment.
This payment is done online, and proof of payment is needed to go further.
However, not every employer is compelled to pay this tax. Exemptions apply to government agencies, international organizations, and certain roles in social or religious institutions, as previously stated.
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Final RPTKA Approval and Visa Issuance
When the DKPTKA payment is verified, the MOM provides the final RPTKA approval.
This paper is very important for getting a Limited Stay Visa (VITAS), which lets people from other countries come to Indonesia and start working.
The RPTKA data is forwarded to the Directorate General of Immigration, which processes the VITAS application.
After arriving in Indonesia, the foreigner must convert their VITAS into a Limited Stay Permit (KITAS), which serves as their official work and residency permit.
Employee of Records: Helps Your Company Apply RPTKA For Foreign Worker
Given all of the complexities, handling compliance and administrative obligations for foreigners may be challenging. Abhitech’s Employee of Record (EOR) services help make the process easier by:
- Handling RPTKA applications
- Managing tax and insurance compliance
You can read Strategic Approaches to Global Business Expansion With EOR on our blog if you need further information.
With Abhitech’s expert HR solutions, your business can focus on growth while ensuring the foreign worker’s hiring process complies with Indonesian labor laws. Contact us to explore more about Abhitech!
