Foreigners working in Indonesia generally require a work permit and a stay permit (ITAS). The Investor permit allows foreigners to work and stay in Indonesia without a work permit. The Investor permit, or also known a Investor ITAS is a specific type of stay permit which is only available to foreigners who are shareholder in an Indonesian company.
When foreigners are not a shareholder and are working in Indonesia they require a work permit. The ministry of manpower issues the work permit and they require the sponsor company to deposit a monthly fee of USD 100.00 in the manpower development fund (DPKK). In addition, there is an annual official fee for the stay permit (ITAS) of IDR 2,5 million (~USD 180.00). These ongoing costs might deter foreigners to apply for a work permit for their long term stay in Indonesia.
The most popular option is the use of a single entry visa by foreigners. This visa allows foreigners to stay up to 6 months in Indonesia and has cheap renewal fees. However, there are several downsides to this visa.
In this article we will discuss these both options available to foreigners.
WORKING IN INDONESIA WITHOUT WORK PERMIT: INVESTOR permit
An Investor permit, also referred to as investor visa, is available for foreigners who invested more than IDR 1.125 billion (USD ~80,000.00) share in a limited liability company (PT PMA) in Indonesia in the form of paid-up shares. The shareholder composition is recorded in the deed of establishment (or any amendment thereof) of the PT PMA, which serves as the basis for the Investor permit application.
Under current investment rules, the foreign investor does not actually have to deposit the IDR 1.125 billion on the bank account of the company. The requirement to pay up the shares is only administrative and therefore investors can decide to delay the payment of shares indefinitely. A PT PMA is also subject to other investment requirements which also are administrative only. As a result, it is fairly easy to set-up a PT PMA, which allows a foreigner then to apply for an Investment ITAS.
Advantages of investor permit
The Investor permit has the following major advantages as compared to a regular ITAS:
- Waiver of work permit requirement. Without the requirement to apply for a work permit, the foreigner saves USD 1,200.00 on government fees annually;
- Validity of up to 2 years. Foreigners only require to renew their Investor permit once every 2 years. There will be small savings on government costs, but more importantly there will be substantial savings on processing costs by your agent.
The Investor Visa can easily save a foreigner USD 2,000.00 or more per year on government costs and agent fees. It is therefore worthwhile to consider this option when moving to Indonesia.
LIVING IN INDONESIA FOR LONG TERM: SINGLE ENTRY VISA
A single entry permit allows a foreigner to stay in Indonesia for up to 60 days initially. After the initial period, foreigners can extend the visa every 30 days up to a total stay of 6 months. There are a few important restrictions to the single entry visa:
- A single entry visa holder cannot work in Indonesia;
- The visa does not allow for multiple entries. Once the foreigner leaves Indonesia the visa is cancelled.
A single entry visa can be sponsored by either a company (business visa) or a person (social visa). The initial costs of a single entry visa are USD 150.00 + IDR 200,000.00 (~USD 15.00). Renewal fees are IDR 500,000 (~USD 35.00).
Advantages of single entry visa
The single entry visa is the easiest solution to stay long term in Indonesia. It does however require more maintenance due to the monthly renewals and the obligation to fly out of Indonesia every 6 months. In addition, since it is a single entry visa, it is not a good option for frequent international travelers.