For Foreign Entrepreneurs that would like to relocate to Indonesia, the Employment Pass is necessary for those, who would like to start businesses and stay in Indonesia. This pass is designed to facilitate the entry and stay of entrepreneurs who are ready to start a new business, the Employment, with an initial validity period of up to two years.An employment pass is normally for the following posts:
(A) KEY POST
Top Managerial Post of a foreign owned company operating in Indonesia.
Responsible for looking after the company’s interests and investments.
Responsible for determining the company’s policies and goals.
(B) EXECUTIVE POST
Professional/Middle Managerial Post.
Required academic and working experience, practical skills related to the respective jobs.
Responsible for implementing the company’s policies and supervision toward the junior staff.
(C) NON-EXECUTIVE POST
Require working experience and technical skills related to the respective jobs.
Requirements for Employment Pass:
One (1) set of application form together with the following supporting documents:
(i) Letter of Authority from the company or letter of appointment as a company’s representative.
(ii) Duly completed DP11 Form with passport size photograph.
(iii) Offer and Acceptance Letter or Employment Contract (RM10.00 Stamped) or Personal Bond which has been stamped with a RM10.00 revenue stamp for the application of a Visitor’s Pass (Temporary Employment)
(iv) One complete copy of the Expatriate’s Official passport (Two copies for PRC citizens).
Other documents required:
Letter of approval from MIDA/BNM/SC/JPM/LHDN where relevant (approval from EC and MDEC is not required)
Print-out of company’s profile from Companies Commission of Malaysia (SSM) or form 9, form 24 and form 49 for approval by MIDA and EC (if EC imposes capital appreciation).
Expatriate’s resume, copies of Diploma/Degree for non
key posts under the approval of MIDA (for posts approved by MIDA and its incumbent, the above supporting documents are not required)
Release letter from former employer if the Expatriate wishes for a change in employer.
- Passport validity should not be less than 18 months.
- Entry into Malaysia was in accordance with the Immigration Act 1959/63, Passport Act 1966 and Immigration Regulations 1963.
- Possess a valid visa (where required)
- Dual citizenship is not recognised in Malaysia.
- Age (no age limit)
- Salary and Expatriate post period
- A minimum salary of RM5000.00 and above and at least 2 years’ employment contract.
Indonesian Tax System on Foreigners
The tax rate for a local company set up by foreigners is different depending on the residency status of the company.
A company is tax resident in Indonesia if at any time during that basis year the management and control of its business is in Indonesia.
Business Activities Requiring Collaboration with Locals
Some businesses are prohibited for foreigners:
Engineering & Technical Expert
- Conveyor Vulcanizing
- Digital Imaging
- Experts In Steel Treatment (Melting And Casting)
- High Precision Tools And Die Maintenance
- Instruments Specialists (For Petrochemincal Industry)
- Manufacturing Systems Designers
- Material Technologists
- Offshore Field Operation
- Radio Frequency Designers
- Sensor Technologist
- Underwater Welders
- Wafer Fabrication
- Wireless Technologist
Geosciences & Geophysical Disciplines
Medical & Pharmacy
Electrical & Electronics
- Analogue Designers
- Microwave Designers
Textiles & Minerals Industry
- Craft/Design Cutting Specialists
- Dye Technologists
- Dyeing Technicians
- Biotechnology Analysts
- Disease Control/Quarantine
- Dyestuff Specialist
- Food/Nutrient Technologists
- Genetic Engineering Specialists
- Product/Flavoring Specialist
- Tea/Food Tasters
TYPES OF BUSINESS NOT ALLOWED IN DISTRIBUTIVE & RETAIL SECTORS:
- Supermarket And Minimarket
- Prepaid Card Business
- Cyber Café
- Car Glass And Aluminium Work Shop
- Herbal Product Business
- Spa-Only For Shareholders And Spa In Hotels
- Restaurant, Bistro And Café – Exclusive Concept & Shareholders Allowed
- Cleaning And Maintenance
- Massage Parlour
- Provision Shop
- Furnitures And Fittings
- Photo Frames Shop
- Textiles And Clothings
- Computer Accessories
- Hair Salon
- Laundry Shop
- Small And Non-Exclusive Restaurant
Positions Not Allowed Under Construction Industry
- Air Conducting Fixing
- Electrical Chargeman
- Electrical Wireman
- Excavator Operator
- Installation Of Lift And Escalator
- Shovel Operator
- Telephone & Telegraph Fixing
Positions Not Allowed Under Timber Industry
- Forest Mils – Most Categories Of Job
- Furniture Factory – All Machinery Specialists
- Timber Factories – Most Categories Of Job
Position That Not Allowed Under Sport Ministry
- All Management Positions Except Trainer And Sport Consultant
SERVICES THAT UNDER THE PREVIEW OF THE GOVERNMENT AGENCIES AS FOLLOWS:
1. Market Research And Public Opinion Polling Services
2. Management Consulting Services
3. Other Business Services
- Collection Agency Services
- Duplicating Services
- Telephone Answering Services
- Translation And Interpretation Services
4. Repair Services Relate To Metal Products, Machinery & Equipment On
- Electrical Machinery And Apparatus
- Medical, Precision Optical Instruments, Watches And Clocks
- Motor Vehicles, Trailers And Semi-Trailers
- Office, Accounting And Computing Machinery
- Optical Equipment
- Other Transport Equipment
- Personal And Household Goods
- Radio, Television And Communications Equipment And Apparatus
5. Other Land Transport Services
- Freight Transportation By Man – Or Animal – Drawn Vehicles
- Passenger Transportation By Man – Or Animal – Drawn Vehicles
- Rental Services Of Passenger Cars With Operator
- Transportation Of Other Freight
6. Supporting Services For Road Transport
7. Services Related To Management Consulting
9. Placement and supply services of personnel
- Executive search services
10. Investigation and security services
- Alarm monitoring services
11. Services incidental to manufacturing
12. Publishing and printing on a fee or contract basis
To handle such prohibitions, foreigners can solve this by having joint venture with Malaysian partner:
For such companies, a minimum of 50% control over the venture is maintained by the foreign directors. The other half is owned by Malaysian investors and trading partners. A minimum authorized capital of RM500000 and paid up capital of RM350000 is required.