Indonesian Government Regulation No. 34 Year 2021 on Expatriates

Government Regulation No. 34 of 2021 on Utilization of Expatriates (GR 34/2021)

GR 34/2021 lays emphasis for expatriate employers to prioritize the utilization of local Indonesian employees for certain positions with due regard to domestic labor market conditions. Expatriates hired by an employer may only work in specific positions dan for specific periods, as well as having the skills and competence to fill such position. Furthermore, the employer may also employ an expatriate who is currently employed by other employers for the same position, among others:

a.        Director or Commissioner; or

b.        Foreign Employees / Expatriates in the vocational education and vocational training sectors, digital economy sector, cooperation contract contractors in the oil and gas sectors.

For the purpose of point 2 above, the employer must first obtain a Foreign Expatriate Utilization Plan (Rencana Penggunaan Tenaga Kerja Asing or “RPTKA”) issued by the Minister of Manpower or an authorized/appointed government officer. Furthermore, the employer must also obtain the approval of the initial employer. The employer shall also appoint a dedicated employee for the expatriate for the purpose of technology transfer and knowledge transfer from the expatriate and must have carried out job education and training.

The application for RPTKA requires the expatriates’ Information and Documentations relating to the works which shall further be assessed with respect to its eligibility and verified by the Minister of Manpower or authorized/appointed officer prior to the issuance of its validation. The assessment of application eligibility is exempted for applications submitted by government institutions, representatives of foreign countries, and international agencies. The issuance of RPTKA validation may be utilize as a recommendation to obtain visa and working stay permit for the expatriates.

The employer shall be obligated to pay a Compensation for Utilization of Foreign Workers (Dana Kompensasi Penggunaan Tenaga Kerja Asing or “DKPTKA”), in accordance to the expatriate’s working period in Indonesia. However, such requirement is exempted for Governmental institutions, foreign representatives, international agencies, social organizations, religious institutions, and specific positions in academic institutions.

Validation of RPTKA as mentioned above are divided under the following categories:

a.        RPTKA for temporary works;

b.        RPTKA for works with a duration of more than 6 (six) months;

c.         RPTKA for non-DKPTKA; and

d.        RPTKA for Special Economic Zone.