Employers are responsible for work permit applications. Work permits are held by the company and not the employee, so the employee cannot use the permit to work for another company. A company wishing to employ an expatriate must obtain government approval before proceeding to apply for a work permit on behalf of a foreign worker. A formal request for approval is called a Letter of Announcement or Surat Pemberitahuan (SPT), or Implementation of Employment Contract Agreement Letter or Surat Perjanjian Pelaksanaan Pekerjaan (SPPP), and is sent to the Indonesia Investment Coordinating Board (BKPM).
The employer must also submit a Manpower Utilisation Plan for a Foreign Worker or Rencana Penempatan Tenaga Kerja Asing (RPTKA).
Once this is approved, the company must submit a VITAS Visa application (Limited Stay Visa) to the BKPM using the Request Permission form called the PPt.2. The BKPM then issues a Letter of Recommendation to the Department of Immigration. The Indonesian Consulate in the employer's home country then receives a notification and can issue a VITAS (Limited Stay Visa) - in the form of a passport stamp - for both the foreign employee and their family.
The foreign employee must provide the following:
The foreign employee's family must provide the following:
The employer provides the following for the first application for a foreigner's work permit:
The entire process takes up to 30 days. Foreign workers must go to the regional immigration office within three days of arriving in Indonesia; the VITAS Visa issued while the worker was still living in their home country covers the processing period, and covers the worker's family as well until the residency visa is issued.
At this point, the process for transforming the VITAS Visa into a KITAS Visa begins (residency visa). Fingerprints are taken, and a Blue Alien Registration Book or Pengawasan Orang Asing (POA) is applied for.
Work permits for senior positions held by foreigners are valid for three years and are renewable. All other positions are valid for one year and can be renewed as well, although there are limits to the number of renewals which can be made.
A foreign employee can work for a period of one year from the date of entry into Indonesia (with the exception of senior positions). If the company wishes to retain the services of the foreign employee, a work permit can be extended for one year, three consecutive times. However, the foreign worker must leave Indonesia after obtaining an Exit Permit Only (EPO), and then re-enter the country. After re-entering, they must apply for another KITAS Visa.
Foreign workers employed in Indonesia need to pay income tax and hence register with the Indonesian Tax Office (Kantor Direktorat Jenderal Pajak) for a Taxation Identification Number or Nomor Pokok Wajib Pajak (NWTP).
An employee's yearly wage determines the tax rate. Employers often deduct tax from wages, but employees should make sure their deductions are correct and that they are actually being paid to the tax office and in the employee's name. Problems sometimes arise because the employee is required to file income tax themselves, so double or errant payments can and do occur.
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