Work KITAS and Indonesian PT

[Sprocket]

Hi, I got some immigration advice from an immigration lawyer recently and just want to check it's accurate.

I have an Indonesian spouse and would like to work mostly remotely from Indonesia. One problem - I have one Indonesian customer so I need a KITAS with work rights. I can't just use the Spouse visa.

The lawyer said I could setup an Indonesian PT (50/50 with spouse) I would need to prove funds of usd$30k (not sure if in PT bank account or government controlled account) and then my PT could sponsor me. And I wouldn't need to hire a local to shadow me.

Does that sound right? Is this sort of arrangement on a website somewhere.

Thanks in advance

 

[centurion]

Hi, I got some immigration advice from an immigration lawyer recently and just want to check it's accurate.

I have an Indonesian spouse and would like to work mostly remotely from Indonesia. One problem - I have one Indonesian customer so I need a KITAS with work rights. I can't just use the Spouse visa.

The lawyer said I could setup an Indonesian PT (50/50 with spouse) I would need to prove funds of usd$30k (not sure if in PT bank account or government controlled account) and then my PT could sponsor me. And I wouldn't need to hire a local to shadow me.

Does that sound right? Is this sort of arrangement on a website somewhere.

Thanks in advance

Mostly wrong info.

 

[john madden]

Mostly wrong info.

Then how about providing the correct information, or at least pointing out what's wrong in the advice that Sprocket has been given.

 

[Brian86]

Hi, I got some immigration advice from an immigration lawyer recently and just want to check it's accurate.

I have an Indonesian spouse and would like to work mostly remotely from Indonesia. One problem - I have one Indonesian customer so I need a KITAS with work rights. I can't just use the Spouse visa.

The lawyer said I could setup an Indonesian PT (50/50 with spouse) I would need to prove funds of usd$30k (not sure if in PT bank account or government controlled account) and then my PT could sponsor me. And I wouldn't need to hire a local to shadow me.

Does that sound right? Is this sort of arrangement on a website somewhere.

Thanks in advance

There are multiple layers to this.

First, doing contract work for an Indonesian company does not violate your visa; in immigration law people on spouse visas have the explicit right to work in Indonesia, and nowhere in immigration law will you find a prohibition about what kinds of work. Manpower law (which governs companies, not individuals) will scare away most companies from hiring you as an employee, but doing contract work puts them at minimal risk (and you at no risk). If you have a foreign company to bill them from, even better.

But, if you wish to set up a PT and do things that way, what you have posted is incorrect. You can not be a partial owner of the Indonesian PT, only Indonesian citizens. In that case, yes, the required capital is low and it could hire you as a foreign Director (or foreign expert, more difficult). It's actually only 50 million minimum capital last I checked, about 3000usd. Having you employed by the company will incur an annual 1200usd tax/fee (RPTKA) paid by the PT.

If you wish to be a partial owner of the PT, it will need to be a PT PMA, which has a minimum startup capital of 10M (approx 600k usd). But if you're a director and owner of 10M there is no 1200usd RPTKA.

Another option is simply to have your wife (personally, as an individual not as a company) be the contractor for this Indonesian client. All communication is done in her name, invoicing in her name, transfers to the bank account in her name. And you are allowed as her spouse to do a lot of the work for her, even 99.9%.

 

[Sprocket]

There are multiple layers to this.

First, doing contract work for an Indonesian company does not violate your visa; in immigration law people on spouse visas have the explicit right to work in Indonesia, and nowhere in immigration law will you find a prohibition about what kinds of work. Manpower law (which governs companies, not individuals) will scare away most companies from hiring you as an employee, but doing contract work puts them at minimal risk (and you at no risk). If you have a foreign company to bill them from, even better.

But, if you wish to set up a PT and do things that way, what you have posted is incorrect. You can not be a partial owner of the Indonesian PT, only Indonesian citizens. In that case, yes, the required capital is low and it could hire you as a foreign Director (or foreign expert, more difficult). It's actually only 50 million minimum capital last I checked, about 3000usd. Having you employed by the company will incur an annual 1200usd tax/fee (RPTKA) paid by the PT.

If you wish to be a partial owner of the PT, it will need to be a PT PMA, which has a minimum startup capital of 10M (approx 600k usd). But if you're a director and owner of 10M there is no 1200usd RPTKA.

Another option is simply to have your wife (personally, as an individual not as a company) be the contractor for this Indonesian client. All communication is done in her name, invoicing in her name, transfers to the bank account in her name. And you are allowed as her spouse to do a lot of the work for her, even 99.9%.

Thanks Brian.This is exactly what I needed. Do you know any good websites for Spouse Visa working, including in Bahasa Indonesia?

Do you think a lawyer would give incorrect advice just to over charge me?

He also said foreign workers with technical degrees are exempt from income tax.

 

[centurion]

Then how about providing the correct information, or at least pointing out what's wrong in the advice that Sprocket has been given.

You are allowed freely to do a work that is done abroad, and that is not correlated with Indonesia (including working online for offhsore entity). For any other paid and/or formal work in Indonesia you would be required to have a work permit. Your spouse can set-up a company and employ you, but there are minimum capital tresholds for these kind of companies and they are higher than 30k USD.

There is an exception from this rule if you are a shareholder in a PMA company and director/commissioner, in that case you do not need a work permit.

 

[Brian86]

Thanks Brian.This is exactly what I needed. Do you know any good websites for Spouse Visa working, including in Bahasa Indonesia?

The superseding immigration law is Undang Undang No. 6 Tahun 2011, Pasal 61 declares the right to work. No immigration law changes or undermines this. In fact many immigration laws and regulations clarify that other kinds of visa are not allowed to work, but it is never applied to the spouse visa.

The often cited law saying foreigners can't work without IMTA (RPTKA for the company) is a Ketenagakerjaan (Manpower) regulation (Permenaker No. 8 Tahun 2021 is the latest) which says Tenaga Kerja Asing must have a work permit. First of all, this law is for companies and all the penalties for violation are directed towards companies that violate the law, not individuals. Second, this still doesn't apply to people on spouse visas because Pasal 1 defines TKA as those on a work visa. Practically speaking, despite the law being clearly written on this second point, I would be fearful of trying to argue that case, so I would still not recommend companies hire WNA on spouse visa without a work permit (RPTKA). But contracting a project to a WNA would be more relaxed, especially if they can invoice from and receive payment to a foreign company.

Do you think a lawyer would give incorrect advice just to over charge me?

Absolutely! I have not been impressed with the knowledge of the law from lawyers I have consulted; they are more often just familiar with what they can get done or not get done, which I suspect is more about where they have a connection they can "grease".

He also said foreign workers with technical degrees are exempt from income tax.

That's a huge generalization. There is a newer law which gives exemption for 4 years for foreign experts, but there are many criteria that must be met. It's in the first 10 or so paragraphys of PMK No. 18 Tahun 2021.

 

[Hawk256]

The superseding immigration law is Undang Undang No. 6 Tahun 2011, Pasal 61 declares the right to work. No immigration law changes or undermines this. In fact many immigration laws and regulations clarify that other kinds of visa are not allowed to work, but it is never applied to the spouse visa.

The often cited law saying foreigners can't work without IMTA (RPTKA for the company) is a Ketenagakerjaan (Manpower) regulation (Permenaker No. 8 Tahun 2021 is the latest) which says Tenaga Kerja Asing must have a work permit. First of all, this law is for companies and all the penalties for violation are directed towards companies that violate the law, not individuals. Second, this still doesn't apply to people on spouse visas because Pasal 1 defines TKA as those on a work visa. Practically speaking, despite the law being clearly written on this second point, I would be fearful of trying to argue that case, so I would still not recommend companies hire WNA on spouse visa without a work permit (RPTKA). But contracting a project to a WNA would be more relaxed, especially if they can invoice from and receive payment to a foreign company.

It seems we always have the problem of these two laws being not clearly defined in practice. I don't know if we will ever get that court case to really define it though. Everyone is happy walking on eggshells instead of changeling the law as written. I think it will be a history book case when or if it happens. I do know of one case where a man had a spouse vista and was teaching English at the Masjid. The wife turned him in and their first meeting they told him he had 7 days to leave or they would start actions. Maybe they were bluffing? In this case he didn't stick around to find out.

 

[fastpitch17]

With all the discussions and posting of this or that UU, I'm pretty sure it boils down to something simple.

Immigration cares less if you work or not. It is not their responsibility. Thus, nothing in their regs on working with a spouse sponsored anything. Manpower on the other hand is responsible and they have many regs and all are not the clearest. Maybe so they are able to make their own interpretations as they go. When it comes down to it, Immigration will not deport someone for working. They will deport someone for breaking the law. In the case of working they will get the directive from manpower that someone broke the law.

People can whine about working and Immigration but really, their whine should be directed at Manpower who enforces the laws concerning working. Get information from them, not Immigration.

 

[make_batik_great_again]

I hope it is okay if I post this question here since it is connected to the topic here. I don´t want to open a new thread for this question if there is a thread that has a very similar topic:

The IMTA for foreigners costs 1,200 USD per year at the moment. Does anyone here have experience or knowledge about the costs of applying for IMTA? Did you do it by yourself or did you ask a lawyer/consultat/notary to do the process? How much did they charge you for that?

 

[marcus]

... Does anyone here have experience or knowledge about the costs of applying for IMTA?
... How much did they charge you for that?

The "Work Permit" now is named "Notifikasi/Notification" (if it didn't change again) . The employer is responsible to request it , and I guess many (or maybe most) hire visa agents to do all the bureaucracy with Manpower Department and the Immigration (for the Work KITAS) .

To have an idea , 1 visa agent that I checked charges Rp11 million for the Work KITAS (which I guess , includes all the services above + Immigration fees , but does not include the fees from Manpower Department , which I guess is only the US$1'200 you mentioned) .

If you already have a KITAS or KITAP sponsored by Indonesian spouse , then you will need to "inform" Immigration and your employer only gets the "Notifikasi" .

 

[Brian86]

The sponsoring company needs to apply for RPTKA (rencana pengunaan tenaga kerja asing, plan for use of foreign worker) and pay the $1200, and when approved the company gets IMTA (izin mempekerjakan tenaga asing, permission to hire foreign worker) for the specific worker. Then, the company can file for a KITAS visa for the worker.

 

[marcus]

... I have an Indonesian spouse ... I have one Indonesian customer so I need a KITAS with work rights. I can't just use the Spouse visa.

In my view , (assuming you have a KITAS or KITAP sponsored by your Indonesian spouse) your best option would be : your Indonesian spouse opening a small business and you working informally for it . Since long ago Manpower officers had said that informal work is acceptable in such cases , without a work permit .

-----------------------

(free translation from http://percaindonesia.com/catatan-so...-7-maret-2015/ - discussion between some Manpower officers and Perca)
[.....
A) Holders of KITAS/KITAP sponsored by Indonesian spouse are allowed to work in a company ... with a work permit .
............
D) Case: Husband / wife of a mixed marriage with cuisine chef background want to open a small café, with a small seating area is classified as a small business and does not require work permit. When this business grows crowded and large, than it is necessary to have operating permits from the relevant authorities . When the businesses becomes a legal entity, then this foreign worker must have a work permit
............
CONCLUSION:
Although the Immigration Law no. 6 of 2011, Article 61 states that the holder of an Indonesian spouse sponsored KITAS or KITAP can work and/or do business to make ends meet for him/her and family, we still have to refer back to the Labour Law No. 13 year 2003 and Permenakertrans No. 12 year 2013, which essentially mean that a foreign worker in a mixed marriage is allowed to work without a work permit if in the informal sector, freelance or have a small business which is not a legal entity. When working in a legal entity then MUST have work permit.]

The lawyer said I could setup an Indonesian PT (50/50 with spouse) I would need to prove funds of usd$30k ... and then my PT could sponsor me. And I wouldn't need to hire a local to shadow me.

Not true , as already pointed by others here .

 

[marcus]

... doing contract work for an Indonesian company does not violate your visa; in immigration law people on spouse visas have the explicit right to work in Indonesia, ...

It does violate your KITAS/KITAP , in the view of some government officers . Although the Immigration Law does state that (for Indonesian spouses sponsored KITAS/KITAP) , the Article 61 of the Immigration Law was not implemented yet by a Regulation , so we have to follow official verbal statements from the authorities (like the one I posted above) .

Another option is simply to have your wife (personally, as an individual not as a company) be the contractor for this Indonesian client. All communication is done in her name, invoicing in her name, transfers to the bank account in her name. And you are allowed as her spouse to do a lot of the work for her, even 99.9%.

The Indonesian spouse must have a small business (in addition , they will pay less income tax as small business than as an individual) .

 

[marcus]

... Immigration cares less if you work or not. It is not their responsibility... Immigration will not deport someone for working. They will deport someone for breaking the law. In the case of working they will get the directive from manpower that someone broke the law.

I disagree . Any subject regarding foreigners is Immigration's responsibility .

And in my view , Indonesian Immigration knows already enough the Manpower rules and doesn't need help from Manpower officers in most of the cases . From what I heard , deportation due to illegal work is relatively common (and they can do that very easily , as an administration procedure) .

Article 75 of Law no.6 Year 2011 (free translation)
(1) Immigration officers have the authority to apply Administrative Measures on foreigners who : are being dangerous and reasonably suspected to endanger security and public order or do not respect or do not obey laws and regulations.
(2) Administrative Measures Immigration as referred to in paragraph (1) can be:
a. inclusion in the list of prevention or deterrence (black list);
b. restrictions, changes, or cancellation of residence permit;
c. prohibition to be in one or a few specific places in the Territory of Indonesia;
d. requirement to reside in a particular place in Indonesia Region;
e. imposition of the burden of costs and / or
f. Deportation from the Territory of Indonesia.

 

[make_batik_great_again]

CONCLUSION:
Although the Immigration Law no. 6 of 2011, Article 61 states that the holder of an Indonesian spouse sponsored KITAS or KITAP can work and/or do business to make ends meet for him/her and family, we still have to refer back to the Labour Law No. 13 year 2003 and Permenakertrans No. 12 year 2013, which essentially mean that a foreign worker in a mixed marriage is allowed to work without a work permit if in the informal sector, freelance or have a small business which is not a legal entity. When working in a legal entity then MUST have work permit.]

Thank you for the explanation and the example. I only wonder what exactly counts as a "small business". Just as an example: Would a CV still count as a small business? At least, it does not count as a legal entity as far as I know. Or does the revenue determine whether or not it is still a "small business".

And, in your example, when the café gets crowded: What are the options for the mixed couple then? For being able to apply for a work permit for a foreigner, there are only very limited options: For example a regular PT (which needs more than one founder) can apply for a work permit for foreigners. Therefore, the WNI in that family would have to open a regular PT? That would mean, the WNI needs to find at least one other person who he/she runs the company with because for a regular PT you need at least 2 people (founders) and the WNA husband/wife probably cannot join that PT without the PT becoming a PT PMA.

So, the two options (if the café gets crowded and is not a small business anymore) would be:

Option 1) The couple has to share the profit with somebody else who joins the business only for being able to found a PT? Then the WNA could get a work permit and continue working there.

Option 2) No other person joins that business. Then registration as a regular PT would not be possible and, therefore, no work permit for the WNA would be possible either. Then the couple would have to accept that the WNA cannot support anymore.

Or which other options would exist if the business is growing and it does not count as a "small business" anymore?

 

[marcus]

... I only wonder what exactly counts as a "small business"...

I am not sure , but see below an article about it . I guess values change from time to time as I saw already other article with different values .

... when the café gets crowded: What are the options for the mixed couple then? For being able to apply for a work permit for a foreigner, there are only very limited options: For example a regular PT ...
Or which other options would exist if the business is growing and it does not count as a "small business" anymore?

Yes , for sure PT and PT PMA .
I heard Yayasan too .
I don't know much about this subject .

-----------------------------------

from https://money.kompas.com/read/2022/...ian-umkm-kriteria-ciri-dan-contohnya?page=all
Title : Understanding UMKM, Criteria, Characteristics and Examples (free translation)
By Nur Jamal Shaid, Muhammad Idris , Sept 2023

.....
1. Micro Business Micro
... A business can be said to be a micro business if it has sales up to IDR 300 million, and has assets or net worth of up to IDR 50 million (excluding land and building assets)... Examples of micro MSMEs are small traders in the market, barber shops, street vendors, and so on.

2. Small Business
... Businesses that meet the criteria for small businesses are businesses that have a net worth of IDR 50 million to IDR 500 million. Then annual sales range from IDR 300 million to IDR 2.5 billion. Financial management of small businesses is also more professional than micro businesses. Examples of small MSMEs are laundry businesses, small restaurants, motorcycle repair shops, catering, photocopying businesses, and so on .

3. Medium Enterprises
... The net worth criteria of medium enterprises are above IDR 500 million to IDR 10 billion (excluding buildings and land where the business is located). Then the annual sales results reach IDR 2.5 billion to IDR 50 billion. In addition to separate financial management, medium enterprises also have legality. Examples of medium-sized MSMEs are home-based bread makers, large restaurants, and hardware stores ...

 

[centurion]

Bellow 5 billion assets

Thank you for the explanation and the example. I only wonder what exactly counts as a "small business". Small business: assets bellow 5 bil Rp excluding land and realestate/revenue bellow 15 billion/year.

Small business: assets bellow 5 bil Rp excluding land and realestate/revenue bellow 15 billion/year.
Micro is less.
PMA is by regulations classified as big business.