INDONESIAMay 8, 2015

The Indonesian Manpower Department continues to discuss the details of a new law that would require foreign employees to be proficient in the Bahasa Indonesian language in order to obtain work and residence authorization in the country. The legislation was first introduced for consideration in early 2015 as a way to strengthen foreign workers’ ability to transfer their job knowledge to local counterparts and aid in daily communication with Indonesian coworkers. Should the department decide to move forward with this proposal, the legislation would still need to go before the People’s Representative at the Legislature before any sort of approval or implementation stage.

If this proposal does become law, it is widely believed that the Indonesian authorizes will grant exemptions to foreign nationals entering Indonesia in Director or Commissioner roles in order to continue encouraging foreign investment in the country.

Lastly, this proposed new law is still within the discussion phase within the Manpower Department and it remains unclear at this time when/if/and in what form the Indonesian authorizes will pass this law. Not only are there implementation and enforcement challenges to such a strict language requirement, but the authorities must also consider possible economic risk from losing potential foreign talent and investment in the country. Companies should expect changes to the details of the regulation as it progresses through the legislative process in Indonesia.

Pro-Link GLOBAL will continue to work with our local teams to monitor this proposed regulation closely and will provide updates as they are made available. 

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