We are here to make navigating labor & employment dispute in Indonesia straightforward and stress-free. With our deep understanding of Indonesian labor & employment laws & regulations, and extensive experience labor & employment litigation, we have strong commitment to protecting your business and ensuring you stay compliant with all relevant laws. We represent the companies like yours in resolving labor & employment disputes through the entire spectrum of mediation, from Bipartite to Tripartite negotiations, and represent in the Indonesian Industrial Relations court to gain the most favorable outcome.
Indonesian Legal Procedures for Labor & Employment disputes litigation at a glance:
The Industrial Relations Court Proceedings involves several stages:
Layoffs must be carried out according to the procedures outlined in Government Regulation No. 35 of 2021. Employers are required to attempt negotiations with the employee and offer compensation packages, including severance pay, long-service pay, and compensation for rights such as untaken leave.
What is an Investor KITAS, and how is it different from a Work Permit KITAS?
The Investor KITAS allows foreign nationals who hold significant shares in an Indonesian company to live and manage their investment in Indonesia. Unlike the Work Permit KITAS, the Investor KITAS does not require a separate work permit (IMTA) as it focuses on investment management rather than employment.
What are the key legal regulations governing visas and stay permits in Indonesia?
The Indonesian Ministry of Law and Human Rights Regulation Number 22 of 2023 outlines the legal framework for all visas and stay permits.
Can I apply for a Work Permit KITAS if I work for a foreign company based outside of Indonesia?
No, a Work Permit KITAS requires sponsorship from a legally registered Indonesian company. Foreign companies based outside Indonesia cannot sponsor a KITAS unless they establish a legal presence in Indonesia, such as a PT PMA.
Can I convert a Single-Entry Business Visa or Multiple-Entry Business Visa to a KITAS?
No, you cannot convert a Single-Entry or Multiple-Entry Business Visa to a KITAS. KITAS applications must be initiated separately through your employer or investment sponsor and require different documentation and procedures.
What should I do if I need to renew my KITAS?
Renewals must be processed before your KITAS expires. We recommend starting the process well in advance to avoid overstaying penalties.
Can I bring my family with me on a Work Permit KITAS
Yes, you can bring immediate family members (spouse and children) under a Dependent KITAS. Your dependents will be issued a KITAS based on your work permit, allowing them to stay in Indonesia legally, though they cannot work.
Can I work in Indonesia with an Investor KITAS?
Yes, as an investor, you are allowed to manage and oversee your investments. However, the Investor KITAS does not permit traditional employment for other companies; it only covers activities related to managing your investments.
What happens if I overstay my visa or KITAS in Indonesia?
Overstaying your visa or KITAS can lead to fines of IDR 1 million per day, and if overstaying persists, deportation and potential blacklisting from Indonesia are possible. It’s important to ensure timely renewals and proper visa management.
How long does it take to process a Work Permit KITAS?
The processing time can vary, but typically it takes around 2 to 4 weeks from the submission of the required documents to the issuance of the KITAS.
What happens if my employment contract ends before my Work Permit KITAS expires?
If your employment contract ends, your employer must report the termination to the immigration office, and your KITAS will be canceled. You are required to leave Indonesia unless you secure another sponsorship or transition to a different visa type.
Can I conduct business activities on a Tourist Visa in Indonesia?
No, business activities such as attending meetings or negotiations are not allowed on a Tourist Visa. For such activities, you must apply for a Single-Entry Business Visa or a Multiple-Entry Business Visa, depending on your needs.
What are the consequences of working in Indonesia without a Work Permit KITAS?
Working without a proper Work Permit KITAS (Index E23) is a serious violation of Indonesian immigration laws. It can lead to fines, deportation, and possible blacklisting, preventing future entry into Indonesia. Always ensure you have the correct permit before engaging in any employment.
Can I change my visa type while in Indonesia?
In most cases, changing visa types (e.g., from a Business Visa to a KITAS) requires leaving Indonesia and applying from abroad. However, specific visas, such as a temporary visa to KITAS, may be converted under certain conditions. We can guide you on the best approach based on your situation.
Can I apply for a Work Permit KITAS (Index E23) if I am a freelancer or self-employed?
No, freelancers or self-employed individuals cannot apply for a Work Permit KITAS. The KITAS requires sponsorship from an Indonesian company that employs you in a specific role. However, other visa types may be available depending on your circumstances and types of freelancer activity.
How soon should I apply for a KITAS renewal before it expires?
It is advisable to begin the renewal process 30 to 60 days before your KITAS expires to allow sufficient time for processing.
Can I hold both a Work Permit KITAS and an Investor KITAS simultaneously?
No, you cannot hold both at the same time. You must choose between the Work Permit KITAS and the Investor KITAS depending on your role in Indonesia, whether it is as an employee or an investor.
What if my company’s investment level drops below the threshold required for an Investor KITAS?
If your investment falls below the required threshold (IDR 1 billion in shares or IDR 10 billion in capital), your Investor KITAS may be revoked, and you could lose your right to stay in Indonesia under that permit. It’s essential to monitor your investment levels to maintain compliance.
Can I study in Indonesia with an Investor KITAS or Work Permit KITAS?
No, these KITAS types are for business or employment purposes only. If you plan to study in Indonesia, you would need to apply for a Student KITAS, which is specifically designed for education.
How does the Multiple Exit Re-entry Permit (MERP) work with a KITAS?
The MERP allows you to leave and re-enter Indonesia while holding a KITAS. Without a MERP, your KITAS would be invalidated upon exit. The permit typically lasts for the duration of your KITAS and must be renewed along with your KITAS if needed.
Can I apply for a KITAS on arrival in Indonesia?
No, you cannot apply for a KITAS upon arrival. The KITAS must be processed before entering Indonesia, and you will need an entry visa related to the KITAS (e.g., VITAS) to convert it into a KITAS upon arrival.
Termination due to health reasons is allowed only if the employee can no longer perform their job duties after receiving proper medical treatment. The employer must provide severance pay, long-service pay, and other rights, such as compensation for unused leave, in accordance with Government Regulation No. 35 of 2021.
The MERP allows you to leave and re-enter Indonesia while holding a KITAS. Without a MERP, your KITAS would be invalidated upon exit. The permit typically lasts for the duration of your KITAS and must be renewed along with your KITAS if needed.
Employment contracts must be in writing and should clearly outline both employer’s and employee’s rights and obligations, including job responsibilities, working hours, salary, benefits, and the duration of employment. The contract should comply with Indonesian Manpower Law No. 13 of 2003, as amended by the Job Creation Law.
What are General Corporate services??
General Corporate services encompass assistance with day-to-day business operations, including corporate structuring, compliance with local laws, regulatory matters, and corporate governance.
What is the scope of Legal Advisory in Indonesia?
Legal Advisory includes offering expert opinions on Indonesian law, helping businesses navigate legal complexities, and providing strategic guidance for minimizing risks in transactions or operations.
Why is Legal Compliance important in Indonesia?
Legal Compliance ensures that your business follows applicable laws and regulations in Indonesia, helping avoid legal disputes, penalties, and potential shutdowns due to non-compliance.
How can you help with company formation in Indonesia?
We assist with setting up different types of companies, such as PT PMA, PT PMDN, Representative Offices (RO), Permanent Establishment (PE), ensuring that your business structure complies with Indonesian corporate laws.
How often should companies conduct a legal compliance review?
It is recommended to conduct a legal compliance review regularly or when there are significant regulatory changes, ensuring the business continues to operate within the bounds of Indonesian law.
What happens if a company fails to meet legal compliance standards?
Failure to comply can result in penalties, legal disputes, or suspension of business activities. Staying compliant helps safeguard your business from these risks.
What should businesses know about labor law compliance in Indonesia?
Businesses need to comply with labor laws concerning employment contracts, employee rights, and benefits. We ensure your HR practices align with Indonesian labor regulations.
If your employment contract ends, your employer must report the termination to the immigration office, and your KITAS will be canceled. You are required to leave Indonesia unless you secure another sponsorship or transition to a different visa type.
What is the typical settlement of debt collection?
Typically, the debtor will pay the debt fully; or enter into a debt agreement that contains the installment of payment by giving an asset guarantee.
How can I enforce a debt agreement?
If the debtor fails to comply with an agreed settlement, legal enforcement measures such as executing the debtor’s asset and court proceedings are conducted.
How does the debt collection process work in Indonesia?
The process is started with legal advice and case analysis by our lawyers, sending demand letters, followed by negotiation and settlement. If the debtor remains unresponsive or refuses to pay, further legal actions like filing a lawsuit through the Indonesian court may be considered if necessary.
How many demand letters shall be sent to the debtor?
In Indonesia, the best legal practice is to send 2x (twice), or a maximum of 3x (three times) demand letters.
What happens if the debtor ignores the first demand letter?
The next steps could include sending the second demand letter and further negotiations. Persistent non-compliance may lead to further legal action or court proceedings.
How long does the debt collection process take?
Depending on the complexity of the case and the debtor’s response.
What are the benefits of out-of-court debt collection?
Typically, faster, less expensive, and less adversarial than going to court. It helps maintain business relationships and avoids lengthy legal battles in court.
Are there any time limits for claiming an unpaid debt in Indonesia?
Yes, there is a statute of limitations, which is the period from the due date of the debt in which you must initiate recovery actions for the debtor.
Can debt collection affect my business relationship?
Handled professionally, debt collection can maintain or even strengthen business relationships by demonstrating a commitment to fair and timely financial practices. Open communication and a fair approach are key.
What if the debtor disputes the debt?
If the debtor disputes the debt, you may need to provide evidence supporting your claim. This could involve negotiations, mediation, or legal action to resolve the dispute.
Can I include interest on overdue debts?
Yes. The interest rate should comply with Indonesian laws.
What should I do if I receive a counterclaim from the debtor?
It is important to consult with our lawyer to assess the validity and implications of the counterclaim. Our lawyer can help you respond appropriately and protect your interests.
