Hiring Practices in Indonesia

Requirement for Foreign Employees to Work

Requirements for Foreign Employees: The utilization of foreign employees/workers (Tenaga Kerja Asing or “TKA”) in Indonesia is strictly regulated and subject to various obligations and requirements under the Manpower Law, along with its implementing regulations.

Types of Employment Contracts: As stipulated under Article 42 paragraph 4 of the Manpower Law and Article 4 paragraph 1 of GR 34/2021, TKA in Indonesia cannot be employed under a PKWTT, but only under a PKWT.

Please note that a PKWT is limited to a maximum period of five years, whether through a single contract or through extensions (Article 56 paragraph … of the Manpower Law). Therefore, the duration of a TKA’s work in Indonesia must take this time limit into account to comply with the applicable regulations and to align with the validity period of the Foreign Workers Utilization Plan (Rencana Penggunaan Tenaga Kerja Asing or “RPTKA”).

RPTKA: According to Article 42 paragraph 1 of Manpower Law, an employer must submit an RPTKA to MoM prior to employing a TKAs. To obtain a validation of RPTKA, the employer shall submit a written application to MoM, which must, at least, include:

• the employer’s identity;
• the rationale for hiring TKA;
• the TKA’s role or position within the company’s organizational structure;
• the number of TKA;
• their employment duration;
• details of local counterpart employees for the knowledge transfer; and
• the annual work plan for TKA deployment.

Other required documents include:

• the employer’s corporate documents;
• a draft of the TKA’s Employment Contract;
• an organizational structure chart;
• a statement confirming that the TKA will provide the job training and transfer knowledge to the local employee;
• a statement confirming the employer will provide the Indonesian language training; and
• the TKA’s personal information/data.

(Article 12 of GR 34/2021).

It is important to note that RPTKA validation serves as a recommendation for TKAs to obtain the work visa and stay permit in Indonesia (Article 14 paragraph 6 of GR 34/2021). Furthermore, an RPTKA is not required for foreigners that are working in Indonesia as shareholders in Indonesian companies, diplomats, or foreigners employed for (i) production activities that have been suspended due to emergencies, (ii) vocational training, (iii) technology-based startups, (iv) business visits, and (v) research activities for a specific period (Article 30 of GR 34/2021).

Visa Requirements for TKA: A TKA is required to obtain the applicable Work Visa during the period of his/her work in Indonesia, which in most cases, would be a Limited Stay Visa (Izin Tinggal Terbatas or “ITAS”). Prior to applying for an ITAS, the RPTKA must be approved by MoM, which then recommends the issuance of ITAS through the TKA Online system. RPTKA will be used as part of the application process to obtain ITAS as per Article 21 of MoM Reg. 8/2021.

A foreigner who will be employed in Indonesia must file a request for an ITAS Visa to the Directorate General of Immigration (“DGoI”) and provide the following documents:

• The original Passport, valid for, at least, the next six months;
• Proof of guarantee from a guarantor who is the foreigner’s employer;
• Proof of sufficient living expenses for him/herself and/or his/her family while working in the Indonesian territory;
• Recent colour photographs; and
• Any other documents that are used to explain the purpose of the foreigner’s visit, including the aforementioned MoM’s approval on RPTKA.

(Article 34 paragraph 1 of Ministry of Law and Human Rights (“MoL”) Regulation No. 22 of 2023 on Visas and Stay Permits (“MoL Reg. 22/2023”))

Foreigners occupying shareholder positions in Indonesia, aside from the above requirements (excluding MoM approval and RPTKA), are required to provide (i) evidence of a shareholding of, at least, IDR 10 billion in an Indonesian company, including the relevant evidence of MoL approval letter, (ii) MoL approval letter on the establishment for the company, and (iii) the Indonesian company’s bank statements of the last two months (Article 38 paragraph 2 of MoL. Reg 22/2023).

Upon entering Indonesia, the foreigners’ ITAS Visa for their employment in Indonesia will be converted into ITAS, which are valid for up to 2 years (Article 105 paragraph 1 of MoL. Reg 22/2023). The foreigners who will become shareholders in Indonesia will have ITAS valid for a period ranging from 2  to 10 years. ITAS with the applicable lengthened periods of 5 and 10 years are considered as the “golden visas.” Applying for a golden visa will require the foreigner to make additional commitments for further investments in Indonesia (Articles 39, 40, and 105 paragraph 5 of MoL. Reg 22/2023).

Qualifications of TKA: TKAs must have the required competencies for the specific positions they will hold, as determined by MoM after receiving inputs from the relevant ministries/agencies (Article 4 paragraph 2 of GR 34/2021).

Pursuant to Article 4 of Mom Reg. 8/2021, every employed TKA must:

• be educated and qualified in accordance with the position to be occupied;
• have the competency and work experience of, at least, five years in accordance with the qualifications of the position to be occupied; and
• transfer his/her expertise to the TKA Understudy Workers.

Furthermore, there are no legal restrictions or maximum quotas on the number of TKAs that a company may hire. However, companies are required to prioritize the employment of Indonesian workers (Article 2 paragraph 1 of GR 34/2021).

Positions Prohibited for TKAs: Under Article 42 paragraph 5 of the Manpower Law and Article 11 paragraph 1 of GR 34/2021, TKAs are prohibited from occupying positions related to human capital/resources, industrial relations, or other personnel/HR functions.

In addition, TKAs are not permitted to hold multiple positions within the same company (Article 10 of GR 34/2021). However, they may hold multiple positions in different companies, provided the positions are limited to those in:

• the Board of Directors (“BoD”);
• the Board of Commissioners (‘BoC”);
• the vocational education and training sector;
• the digital economy sector; or
• the oil-and-gas sector working for contractors under cooperation contracts.

(Article 5 paragraph 1 of GR 34/2021 and Article 5 paragraph 1 of MoM Reg. 8/2021).

Please note that the prohibition to hold positions in the  HR or personnel-related functions still apply.

Does a Foreign Employer need to Establish or Work through a Local Entity to Hire an Employee?

Under the Manpower Law, an “Employer” is defined as an individual or a corporate (legal or non-legal) entity that employs employees by paying wages or other compensations (Article 1 (4) of Manpower Law). As such, a foreign employer does not necessarily need to establish a company in Indonesia to the extent the employment arrangement complies with the Manpower Law.

Many businesses prefer to establish a foreign investment company or engage in the business by acquiring or cooperate with an existing local company, particularly when the employees will physically perform the work  in Indonesia. This is because certain administrative and tax obligations (such as income tax withholding, social security registration, and RPTKA requirements) can only be fulfilled through an Indonesian corporate entity.

Limitations on Background Checks

Under Indonesian Employment Law, employers may conduct certain types of background checks that require the applicant’s consent, such as:

a. Medical Examinations: Employers may require job applicants to undergo a medical examination as part of the recruitment process, provided that such a requirement is applied equally to all applicants. Under Article 2 paragraph 1 of Minister of Manpower and Transmigration (“MoM”) Regulation No. PER.02/MEN/1980 of 1980 on Medical Examinations of Employees in the Implementation of Occupational Safety (“MoM Reg. 2/1980”), medical examinations aim to ensure that applicants are in optimal health, free from communicable diseases that may endanger other workers, and physically fit for the type of work to be performed. This helps guarantee the safety and health of all employees. Applicants are required to provide written consent for both the medical examination and disclosure of its results to the employer. Employers are entitled to reject applicants who refuse to undergo the examination or do not consent to the disclosure of the results.

b. Drug and Alcohol Testing: Drug and alcohol testing may only be conducted under limited circumstances, such as in jobs where working under the influence of drugs or alcohol may pose health and safety risks or cause serious business losses to the employer. Applicants must give their consent before such tests are conducted.

For employees, drug and alcohol testing may only be carried out if there is a legitimate reason, and if the testing is necessary, proportionate, and conducted with the employee’s consent. All testing costs must be borne by the company, and the results must be kept confidential by the employer, in accordance with Article 6 paragraphs 1 and 2 of MoM Regulation No. PER.11/MEN/VI/2005 of 2005 on Prevention and Control of Drug, Psychotropic, and Other Addictive Substance, Abuse and Illicit Trafficking in the Workplace (“MoM Reg. 11/2005”).

c. Criminal Record Checks: Employers may request criminal record information in the form of a Police Clearance Certificate (Surat Keterangan Catatan Kepolisian or “SKCK”) from job applicants. Pursuant to Article 2 paragraph 1 in conjunction with Article 3 and Article 1 paragraph 1 of Indonesian National Police (“Indonesian Police”) Regulation No. 6 of 2023 on Issuance of Police Clearance Certificates (“Indonesian Police Reg. 6/2023”), applicants must voluntarily apply to the Indonesian National Police (Polri) to obtain an SKCK for employment purposes. Accordingly, employers may not unilaterally access the criminal records of job applicants.

However, based on Law No. 27 of 2022 on Personal Data Protection (“PDP Law”), the above data are regarded as specific data that requires further attention for the employer as a data controller and processor. The employers are required to obtain the applicant’s prior consent in writing or recorded, both electronic or non-electronic, before gathering such data. The consent must clearly state the purpose, be presented in a format that is easily accessible and understandable, and use simple and clear language (provided in local language) (Article 22 of PDP Law). In practice, employers generally prepare a privacy notice that outlines the purposes of personal data processing and the rights of data subjects before the applicant uploads such data.

Restrictions on Application/Interview Questions

Indonesia does not specifically regulate the types of questions that are restricted or prohibited during the job application or interview process. However, employers are required to limit their questions to matters relevant to assessing the applicant’s competence and qualifications, such as work experience, education, and skills.

Discriminatory questions are not permitted, as every worker has the right to obtain employment and a decent livelihood without discrimination based on gender, ethnicity, race, religion, political orientation, and is entitled to equal treatment, including for persons with disabilities, as stipulated under Article 5 of the Manpower Law.

To implement the principle of non-discrimination in the recruitment process, MoM has issued MoM Circular Letter No. M/6/HK.04/V/2025 concerning Prohibition of Discrimination in the Recruitment Process of Workers (“MoM Circular Letter 6/2025”). MoM Circular Letter 6/2025 prohibits the age limitation requirements for any job recruitment process:

• for positions or roles whose nature or characteristics materially affect a person’s ability to perform the job; and/or
• provided it would not result in the loss or reduction of a person’s opportunity to obtain employment.

This provision also applies to workers with disabilities, as stipulated under Point 4 of MoM Circular Letter 6/2025.