Indonesia relaxed rules on professions open for foreign workers

Introduction

Decree No. 228 of 2019 (Decree 228/2019) came into effect on 27 August 2019, which simplifies and revokes previous decrees of the Ministry of Employment (MoE) to widen the type of job titles allowed for foreign professionals to work in Indonesia.

Key provisions in Decree 228/2019

• Subject to related prevailing laws and regulations, senior company positions including Directors and Commissioners are now open for foreign professionals, with the exception of Human Resources.
• For positions not yet specified in Decree 228/2019, companies may formally propose to the MoE for approval, without the need to obtain recommendation from a relevant technical ministry.
• The list on professions open for foreign workers will be evaluated every two years or as considered necessary.
• The list set out by Decree 228/2019 is based on the Indonesian Standard Job Title Classification (Klasifikasi Baku Jabatan Indonesia) in which positions open for expatriate professionals are divided into 18 industries classification. Additional job titles now open for foreign professionals includes the following sectors:

1. Construction
2. Real estate
3. Education
4. Health
5. Information and telecommunications

• Work permits for foreign workers issued prior to the issuance of Decree 228/ 2019 remain valid to its expiry date.

Our observation

In an effort to address issues commonly cited by foreign investors as hindrance to investing in Indonesia, related regulators are in the process of reviewing and simplifying a set of regulations, including the employment of foreign professionals.

As well as driving foreign direct investment in Indonesia, the decree is expected to attract highly-skilled and experienced foreign workers to fill the skills gap in the Indonesian workforce as Indonesia works on its transition from a resource-based to a skills-based economy.