Should the government’s changes to the immigration process – particularly the use of formality agents for visas and stay permit applications – be a cause for panic?
With its 17,500 islands, culturally diverse population, warm and friendly people, rich tradition of music and art, sumptuous culinary offerings and generally laid-back ambiance, Indonesia is without a doubt an excellent lifestyle destination for expats from around the world.
The world’s largest archipelago has thriving industries in tourism, energy, hospitality and entertainment, among others. The largest market in Southeast Asia and the 16th biggest in the world by GDP, the country’s economy has been viewed by foreigners in recent years as one with great potential. The Indonesian economy is also largely dependent on foreign investment. Many local businesses employ professionals and skilled workers of various nationalities.
Over the years, the Indonesian government has put in place immigration policies that have regulated the system of processing visas, as well as work and stay permits that are required for expats if they want to be able to stick around legally. The country has also been diligent in streamlining various regulations that aim to impose uniformity and compliance across the board.
This government’s goal is evident as are the objectives of the Investment Coordinating Board (BKPM). As the primary interface between the Indonesian government and businesses, BKPM aims to make the nation a more attractive prospect by providing a good climate for investments by both domestic and foreign players.
In her article “New Work Permit Regulations in Indonesia,” market entry expert Marlissa Dessy explained the two legal instruments providing a comprehensive overview of the process: the Work Permit Regulation (No. 16/2015) and its October 2015 update (No. 35/2015).
The work permit regulation outlines requirements that expats must take care of to process their work permit (IMTA) applications. Depending on the work permit issued, the foreign worker will be granted a limited stay permit (VITAS) and its corresponding limited stay permit card (KITAS).
In October of 2015, amendments to regulation 16 of 2015 on the Procedures to Employ Foreign Workers (Amendment 16/2015) was issued by the Indonesian government. The changes brought by the newer regulations included the removal of the 1:10 ratio for foreigners to Indonesians (for every one foreigner that a company hires, they should hire 10 Indonesian counterparts). They also eliminated the need to obtain a temporary work permit for short business trips (trainings, meetings, one-time assignment, etc.). The updates discarded the need to obtain a work permit for non-resident directors and commissioners. The list goes on.
Earlier this month, news of more amendments to the immigration process – particularly the use of third parties like formality agents – spread like wildfire.
The country’s Ministry of Justice via the Director General of Immigration announced that third parties, such as formality agents, will no longer be allowed to process applications for visas and stay permits on behalf of expats or their sponsoring companies.
As with any disruptions to the status quo, the news initially came as a shock. It was officially made public when agents were invited to a gathering by the Immigration Director General on Friday, November 11. The change is expected to affect expats, short-term visitors and tourists, companies sponsoring expat workers, formality agents and other third parties, as well as those employed at Immigration offices throughout Indonesia. Moving forward, the above mentioned stakeholders will have to comply with the following new provisions:
Starting November 14, 2016, all Immigration certifications and licenses issued to formalities agents and other third parties are revoked. The sponsor (company) or its staff or the expat should submit all applications for visas and stay permits. All applications from expats through a company or private entity will be accommodated on a first-in-first-out basis.
When asked about how the new rules will impact third party market entry services firms, Dessy tells Indonesia Expat, “There is no reason to panic about the new decree. Visa consultants will still play their role in ensuring that the foreigners will comply with the Immigration Law and help them navigate through the bureaucracy. The only difference is that now the representative from the sponsor of foreign individuals will have to come together with the agent.”
The chief consultant added that those involved should “welcome and embrace the decree […] as it shows that the government is moving forward to a more transparent system.”
Manu Asvalayan, country manager of a market entry services firm in Indonesia, expressed his agreement with the government on the change. “This is ultimately the government’s effort to bring in transparency in this vital point of the immigration process,” he explained. “The policy revisions should be viewed as the government’s effort to understand and evaluate critical areas, such as whether the foreigner is indeed employed by the company or if the person is, in fact, being employed in the country to take up their role.”
Asvalayan added that the changes in the regulation will also serve as a vital help for the government to “create an avenue for more interaction between the expat and the authorities, as well as counteract corruption, particularly in areas where these agents are conduits.”
Despite formality agents getting certain licenses revoked, Asvalayan said that expats should likewise view the notification on a positive note. “This means that they [expats] will be more aware of the process, requirements and compliances that need to be carried out and completed for them to be able to legally work in the country. [This will help them] take adequate measures to ensure that their legal documents are renewed and updated, and that they are kept abreast of requirements.”
Additionally, both Dessy and Asvalayan claim to be enthusiastic about the recent announcement of the Central Immigration office going paperless with applications, renewals and other services. This will mean that even the sponsor of the expat need not come to the Immigration office as often, as the necessary submissions will now be made online.
While more modifications are being drafted at the moment to supplement Immigration’s current position, Asvalayan advised companies and businesses hiring foreign workers to pay more attention to the strict compliance demands related to these regulations.
“There is no reason for expats to be worried. All these bold changes are nothing less than positive reinforcements for the government to ensure efficiency and promptness in the Immigration department,” he added. “Hopefully, the Indonesian government will be able to follow through with this one.”