Indonesia continues to strive for economic growth by offering various conveniences and benefits to attract foreign investment. Recently the country introduced changes to its Working KITAS policy, offering more flexibility for foreign businesses.
Advantages of Indonesia’s New Rule on Working KITAS
Indonesia has a new rule that specifically allows foreign directors and commissioners with an investment less than IDR 10 billion in their company to apply for working KITAS. It grants them the necessary work authorization and running their business while also allowing them to reside in Indonesia.
The new rule on Working KITAS offers several advantages for foreign directors and commissioners who own legal business structures in Indonesia. This new simplification reduces investment burden. One of the requirements for Investor KITAS said that foreign business owners must have a mandatory IDR 10 billion investment threshold. This new working KITAS rule streamlines the working permit for them who enter the Indonesian market with an affordable entry point.
That’s why, for those who wouldn’t qualify for the Investor KITAS due to a smaller investment, the Working KITAS can be a more cost-effective option. Maintaining a high investment level solely to qualify for an Investor KITAS can be expensive. The Working KITAS allows you to work in Indonesia without having to tie up a larger amount of capital.
Indonesia’s Working KITAS vs. Investor KITAS: Key Differences
While both Working KITAS and Investor KITAS offer residency permits for foreign individuals in Indonesia, there are some key distinctions to consider:
* Investment Threshold: Here lies the most significant difference. Investor KITAS applicants must have a minimum investment of IDR 10 billion in their Indonesian company. Conversely, foreign investors with an investment under IDR 10 billion can apply for Working KITAS. However, Working KITAS requires payment into the Expertise and Skills Development Fund, which amounts to USD 1200 annually (around USD 100 per month).
* Document Requirements: Working KITAS applicants require proof of enrollment in a personal health insurance plan and the company’s social security program for their workers (BPJS Ketenagakerjaan). In contrast, Investor KITAS applicants are exempt from these specific documents.
* Validity Period: Working KITAS typically comes with a shorter validity period, ranging from 6 months to 1 year, though extensions are possible. Investor KITAS, on the other hand, offers a longer initial validity period of 2 years, also with the option to extend.
By understanding these key distinctions, foreign investors can choose the KITAS option that best aligns with their investment level, desired work involvement, and preferred residency duration.
Get Your KITAS with Seven Stones Indonesia
Ready to enter the Indonesian market but overwhelmed by the complexities of visa and KITAS applications? Or confused with the company incorporation? At Seven Stones, we understand that understanding foreign regulations can be confusing. For that reason, we offer comprehensive services tailored to your specific needs, including:
— KITAS Application Assistance: Get expert guidance throughout the entire KITAS application process to ensure your application meets all requirements.
— Investment Advisory: Unsure about the best KITAS option for your investment level and business goals? Our consultants will provide insightful advice to help you choose the most suitable solutions.
— Immigration Support: Have questions about visa extensions, renewals, or other immigration concerns? We’re here to provide clear and accurate information, ensuring you stay compliant with Indonesian regulations.
Our professional team stays constantly updated on the latest immigration policies and Indonesian business regulations. See our contact form below and let’s discuss your burning questions.
