If you want to live and work in Bali, you’ll need to understand a few things first. Perhaps the most important aspect of working in Bali is that you will need to obtain a work permit for Indonesia. Basically there are two options. The first is you find a job with an existing company and the second is setting up your own company. In either case, the company will act as a sponsor for the work permit. Continue reading to learn more about these options and what’s involved.
Understanding the work permit
If you’re reading this, you may have come across the term ITAS, which is actually a Limited Stay Permit (a type of visit visa) and not a work permit. An ITAS is granted for various lengths of time depending on circumstances; such as marrying a local, study or research in Indonesia, investment, or visiting family. Different ITAS are valid for different lengths of time, ranging from 1 year all the way up to 5 or even 10 years. The work permit however, is a separate authorization known as an IMTA.
What is a KITAS, is it the same as an ITAS?
The ITAS, or Izin Tinggal Terbatas Elektronik, is the permit itself. The KITAS, or Kartu Izin Tinggal Terbatas is actually a thing of the past, as all permits are now delivered electronically.
You can have an ITAS without an IMTA, but you can’t have an IMTA without an ITAS. The IMTA is granted on a yearly basis only. An ITAS will specify your sponsor and what your job title is. Legally you can only perform the job listed on your permit and only for the company that sponsored it.
Now that you know the basics of the work permit in Indonesia, let’s move on to the ‘how’ of it all.
How to get a work permit for Indonesia
Finding a job with an existing company
For local companies, it’s relatively expensive to employ a foreigner. Not only are foreigners’ salaries many times higher than the local minimum wage, but the additional fees for the limited stay permit and work permit can be a huge burden.
Finding a job with an existing company is a process. It requires a lot of disciplined searching, applying, and countless follow-ups. You’ll need a curriculum vitae that makes you stand out and relevant experience. It also requires a bit of luck and good timing. Certain jobs have specific prerequisites that must be fulfilled to be eligible. These regulations are known to change often so it’s important to remain up-to-date with these.
The Indonesian Ministry of Manpower has strict guidelines on which types of jobs they will allow foreigners to receive sponsorship for. If an Indonesian can do the job, it is unlikely that you would be able to get a work permit for such a job. This includes but is not limited to; server, nanny, doctor, cashier, driver, teacher (except of course, English teacher), security guard, teller, laborer, tour guide, etc.
There are still a handful of roles that are quite common for foreigners. This includes hotel manager, head chef (hotel or specialty cuisine), English language teacher, NGO’s, and president director. Specialty roles beyond those listed above, such as engineer or tech positions, may be granted work permits but with limited contracts. The desired outcome in this scenario is that you are effectively training your replacement.
Make a company, sponsor your own work permit
Foreigners can form a PT PMA, known locally as Perseroan Terbatas Penanaman Modal Asing, or Foreign Investment Company. A PMA can be 100% foreign owned without the requirement of a local partner. With the formation of a PMA come many rules and regulations. To keep the company in a good legal standing, you will need to employ a certain number of locals depending on how many sponsored foreigners you wish to have. Additional requirements include yearly tax liabilities, health insurance, social security payments, and other fees.
A PT PMA can sponsor foreigners in two distinct categories. Either as an employee or an investor, but no one person can be both.
Investor ITAS
Investor ITAS are appealing to foreigners because they are valid for 2 years at a time. They are also cheaper because you are not required to pay the yearly work permit fee of US$1200 to the Ministry of Manpower. As an investor you can not take an active role in the day-to-day operations of the company.
Employment with a work permit
Once you form a PMA, the company can then sponsor a foreigner for employment. The job you plan on doing must be from an eligible category as stated previously. Unlike the investor ITAS, you must pay a yearly work permit fee of US$1200 in addition to the yearly fees required for the ITAS//Limited Stay Permit.
The requirements for setting up a company can be complex, even for native Indonesian speakers. It typically requires visiting multiple governmental departments in various locations multiple times. Preparing documents is akin to a wild goose chase. For this reason, virtually every foreigner forming a PMA will enlist the assistance of an agency. The amount of time it takes to set up a PMA can vary, but it’s gotten a lot shorter compared to years ago.
If you wish to explore setting up your own company in Bali feel free to contact us for more information.
