Indonesia is an appealing prospect for expats seeking employment, particularly regions such as Bali, but it is not the easiest place in which to find work. Its economy is recovering from recent reversals, however, and there are some sectors which still welcome expats, particularly ones with high level qualifications and experience.
The petroleum and gas sectors are strong, as is mining, tourism, rubber, chemical, biomedical, cement and tourism to name but a few. Indigenous Indonesians still mainly work in agribusiness and small farming, but there is a wider range of choice of employment for expats and the more highly qualified. TEFL teaching remains a popular choice and you may be able to work as a freelancer.
Employment bureaucracy in Indonesia can be complex. It is still easier to get a job with an international company with a base in Indonesia: most of these will be located in Jakarta. You will need a sponsor, and a work permit. There are two types of permit:
• ITAS (Izin Tinggal Terbatas): limited stay permit, issued by the Indonesian Immigration Directorate General via the local immigration office
• KITAP (Kartu Izin Tinggal Tetap): permanent stay permit that is available only to expat employees who have held an ITAS for a minimum of three consecutive years
A VITAS is a limited stay visa, not just a permit, and you must have one of these before you will be issued with an ITAS. Your employer must apply for the latter, and must submit the following to the Ministry of Manpower:
• a letter of announcement or SPT
• or an implementation of employment contract agreement letter from the Indonesia Investment Coordinating Board (BKPM)
• an Expatriate Placement Plan or RPTKA
In order to apply for a RPTKA, you will need:
• a completed application form
• a letter from your employer detailing the reasons for hiring a foreign national, and your role in the company
• a copy of the company’s act
• the company’s tax number (NPWP), and business license letter (SIUP)
• a recommendation from another institution for certain types of company such as oil and gas or mining
• a copy of the Wajib Lapor: this is an annual report to the labor department stating the number of expats and local workers employed in the company
• a copy of the company’s organizational structure
• a copy of the KTP (Indonesian ID card) of an Indonesian work colleague
It is technically possible to apply for the RPTKA after you have started work, but only 2 days after.
This is, unfortunately, only the start of the process: after this, your employer must apply for a legal authorization to hire a foreign employee, which used to be known as a IMTA, but has recently been replaced by a notification from the Ministry of Manpower.
Only after this is approved will your employer be able to apply for the ITAS itself. This will enable you to take up work in Indonesia, open a bank account and stay in the country and after 3 years, will enable you to apply for permanent residence.
You can be self employed in Indonesia, but businesses with a significant level of investment are prioritized and foreigners are not able to own land, which may put a block in the way of certain kinds of businesses. The bureaucracy can also prove a stumbling block as it tends to be extremely complex. Consult the Indonesian Investment Coordinating Board (BKPM) for further information.
Indonesia is aiming to become one of the world’s major economies by 2030 and it intends to achieve this aim through technological development. Digital skills are thus in demand, including web developers and data scientists.
There is still a demand for TEFL teachers in the country, but salaries are not usually high.
The list of sectors in the introduction above also give some idea of Indonesia’s main sectors, which are still traditionally industrial even given the march towards a digital future.
Working hours are usually from 8 a.m. – 4 p.m. and may run from Monday – Saturday, with a short break for prayer on Friday. Your working hours per week will depend on your contract.
Annual leave will also be contract-dependent but you will get 13 public holidays off per year, in addition to ‘cuti bersama’ (or “joint days”) which are days off following public holidays.
The minimum wage has recently been raised but will depend on the province that you are working in: it is highest in Jakarta, at a monthly equivalent of US$298.
Your spouse can also work, but note the extremely stringent visa regulations above: they will need to apply for their own separate permit.
You can make speculative approaches to companies. If you are successful in obtaining a job, you will need a corporate sponsor.
Your best bet for finding work is international recruitment agencies, particularly if you are intending to work for an international company, online job boards and the national press. Personal contact and networking is also very important but given the difficulty of getting a work permit, this is best done as a non-working visitor once on the ground.
A standard format for CVs/resumes is acceptable.
Indonesia does not currently have cohesive anti-discrimination legislation. Equality laws tend to be piecemeal and often sector-specific.
You are likely to need to have your qualifications apostilled and it might be a good idea to have salient points in your resume translated.
Applying for and acquiring a visa to Indonesia is a simple process, except for work visas, which are quite difficult to obtain. Expats can obtain several types of visas that dictate how long they can stay in the country and how much they pay for them.
Expats from certain countries do not require a visa to enter Indonesia. These countries include Chile, Macao, Singapore, Hong Kong, the Philippines, Brunei Darussalam, Vietnam, Malaysia, Peru, and Morocco. If you are not from any of these countries, you can still legally enter Indonesia by applying for a visa through designated entry points.
Types of visa
How long you intend to stay in Indonesia determines the type of visa you can apply for. Whether you are in the country for a day, a month, a year or just passing through, there is a valid Indonesian visa for each of these occasions. In addition, Indonesian visas can be used for single or multiple entries into the country.
Visa on arrival or VOA
The VOA is issued to foreigners upon their arrival in the main Indonesian seaports or airports. This visa is ideal if you are not a citizen of any of the aforementioned countries that do not require a visa to Indonesia. The VOA can also grant you temporary access in case you did not apply for visa before traveling to Indonesia.
Visa on arrival grants you a 30-day temporary stay in Indonesia and will cost $25 to apply for. Alternatively, if you are not going to be in Indonesia for more than a week, you can apply for the 7 day VOA permit. This will cost about $10 and should be easier to acquire.
By the end of the 30 days, the VOA becomes invalid unless you want to extend your stay in Indonesia. Extension of your VOA is only possible if you get injured or are receiving treatment during your stay in Indonesia, in the case of natural disasters like typhoons hitting the country, or if the Director of Immigration for Indonesia approves your extension request.
If your reason for extension is valid, then your VOA earns you an additional 30-days’ stay at an extra charge of $25. Thereafter, no further extension can be made to your VOA. Failure to leave the country when the 60 days are over may result in a penalty of $20 per day or, in the worst cases, a 5-year jail term worth $1877 in release fines.
To apply for the VOA permit, you should have a passport valid for 6 months prior to entry in Indonesia. You also need a return ticket, which should be presented while filling in the visa application documents. You are not mandated to take any vaccinations while applying for the VOA. Lastly, the VOA permit must be applied for in any of the official seaports or airports in Indonesia.
The Transit Visa
This is a single entry visa for foreign travelers passing through Indonesia en route to another country. The transit visa is valid for 14 days and can be applied for in your country of residence or on arriving to Indonesia.
You will be required to present certain documents to obtain a transit visa. You are required to have a copy of your travel itinerary stating clearly where you come from and your final destination. Secondly, make sure your passport is valid for more than 6 months prior to entering Indonesia. The passport should also contain one blank visa page.
The transit visa application documents must be presented together with a duly filled application form, and its duplicate, signed by the applicants. Ensure that you have two recent passport photos printed on quality paper during your application. A transit visa application can be completed and processed by the Indonesian embassy in your country of residence.
Any foreigner with a valid passport is eligible for a visit visa. This type of visa grants one single or multiple entry to Indonesia depending on your travel schedule. A visit visa is recommended for tourists, business people, journalists, researchers, or those on social visits.
A single entry visit visa is valid for 60 days and costs around $45 to apply for. The multiple-entry visa, on the other hand, is also valid for 60 days but will cost $100 to apply for. The application papers and process for both visas is similar to the transit visa.
A valid work permit to Indonesia is not only hard to get, but it can also be expensive. This type of visa is recommended if you are going to work in Indonesia for more than a year or as a permanent resident.
The work visa is officially handed to you once you fully move to Indonesia. Every Indonesian embassy has a different set of rules that governs the issuance of work visas. Therefore, be sure to research the required documents and application procedures for work visa in the Indonesian embassy in your home country.
Generally, you will be required to obtain another visa called the KITAS before acquiring the work visa. In addition, your employer should provide a legal document stating that you will be joining their Indonesian company as a salaried worker. This document is known at the ‘Ijin Mempekerjakan Tenaga Kerja Asing’, or IMTA, and is submitted to the Ministry of Manpower. Thereafter, the hiring company will be required to pay a monthly fee of $100.
If you are going to stay in Indonesia for more than 60 days, then you should get a residency visa. Just like the work visa, the procedures for securing a residency visa will vary with embassies. Remember, extra charges may accrue besides the normal application fees.
Izin Kunjungan Sosial Budaya (VKSB)
The VKSB is a visa valid for a period of 6 months. This visa is ideal if you are visiting family or attending an exchange program in Indonesia. The official expiry date of a VKSB is 60 days after which the applicant must renew it for an additional four months or 120 days. The presence of an Indonesian sponsor is required as well to stand as your guarantor.
A VKSB is a single entry visa that will expire immediately you leave Indonesia. If you are going to re-enter Indonesia several times, then the multi-entry version of the VKSB, known as the Sosial Budaya, is applicable. It is valid for a period of 12 months and is only issued for those in Indonesia for social-cultural purposes.
Visa Izin Tinggal Terbatas (VITAS)
The VITAS is a semi-permanent visa issued to an expat who is gaining employment from an Indonesian-based company. The VITAS is issued by the Indonesian Embassy in your residence country. A VITAS grants you access to Indonesia together with your spouse or children. You can only get a VITAS if you have an approved work permit.
Kartu Izin Tinggal Terbatas (KITAS)
The KITAS replaces the VITAS once you arrive in Indonesia. The KITAS is valid for 12 months, which can be extended to 5 years. You will need a sponsor to apply for a KITAS for you
Kartu Izin Tinggal Tetatp (KITAP)
The KITAP is the official permanent residence visa. It is valid for the first 5 years, after which it can be renewed up to 25 years. Just like the KITAS, an Indonesian sponsor is required to assist in the application. Expats with Indonesian spouses are eligible for the KITAP if they intend to live permanently in Indonesia.
Many expats take out private medical insurance, even if this is not a requirement of residence, because healthcare is expensive in their destination country or because certain treatments and procedures are not available.
When taking out health insurance, be sure to check factors such as the annual and lifetime policy limits, whether there are any exclusions which are likely to affect you, whether you are limited to treatment from specific types of healthcare providers, and whether the policy covers emergency evacuation for medical treatment.
Too frequently, potential buyers of health insurance look only for the lowest cost of premiums before really considering the specific benefits and areas of cover they may actually need. Some plans are cheaper for a reason. Often they include large voluntary deductibles on any claim you might make in the future and may severely cap the benefits received under the plan. Clients should define their needs first, establish the particular area of cover they need, then determine their annual healthcare insurance budget. Only then should they look to premium comparisons, last of all.
Do not buy a plan without studying the policy wording carefully. If in doubt, ask, and only when completely satisfied complete all application forms fully, to the best of your ability.
Important questions to ask the insurance provider:
1. Does the plan allow for cooling off periods, cancellation and then repayment of premium in full?
2. Does the plan offer “Moratorium” or is it “Full underwriting” and do you need to have a medical examination before joining?
3. Does the insurer offer a 24 hour help line, 7 days a week, available from anywhere in the world (freephone)? Most insurers now offer this facility.
4. Are pre-existing conditions excluded when joining and if so, for how long are such conditions excluded?
5. Are all and any nationalities accepted or are there restrictions which apply to local nationals? Some insurers will only take expatriates abroad and not local nationals into an overseas plan.
6. Does the plan allow you to continue cover unbroken through your lifetime? In most cases insurers will continue to offer existing clients cover year on year, irrespective of age or claims history, although premium rates charged can increase dramatically with age.
7. Does the insurer allow for any doctor or consultant or hospital within the plan? Are there any restrictions in this respect? Most international plans do not place restrictions on either hospitals or doctors, but almost all demand that their help lines are called first, prior to approval of any inpatient care.
8. Does the insurer provide for the direct settlement of bills presented by hospitals worldwide, regardless of location (or do you have to pay first)?
9. What are the insurers procedures for outpatient claims? Do these require any pre-authorization or if stated in the plan can you just pay and claim? How long before you get money back from the insurer? 14 days? 28 days?.
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Until 2016, expats could only rent property in Indonesia. The only housing units that were up for purchase were luxury apartments, but even these came at a high cost. Nevertheless, today there are plenty of accommodation options, for rent or mortgaging, for an expat moving to Indonesia on a temporary or permanent visa.
It is advisable to first find a temporary place to stay before beginning your house hunt. Couples or expats without family obligations often check into hotels for a while before moving to a house. Those with families often opt for serviced apartments close to the big cities.
As you search for a house to rent, it is important that you personally check each neighborhood. This gets you familiarized with the area faster and helps you find housing zones where expat families often stay. The best housing options are located close to the cities, though you can still find decent accommodation options on the outskirts.
You can also find housing estates in Indonesia designed to offer the same lifestyle standards expats enjoy in their home countries. These estates are often gated and are a bit on the high end in terms of rental pricing. Nevertheless, housing prices in Indonesia are relatively cheap compared to other countries in Asia.
As a foreigner, you can choose to live in an apartment or find a house in one of the gated estates. Apartments are mostly located close to the city and can be furnished or unfurnished, serviced or non-serviced.
Serviced apartments often come with various amenities including swimming pools, gyms, tennis courts, and restaurants. The housing estates located on the outskirts of the cities might also come with amenities, including private security, private parking, recreational areas and so on. Apartments and houses may provide Wi-Fi to tenants, though not all of them do. Ensure you confirm with your property owner that your apartment has internet, especially if you need it for work.
Finding a property
Expats can find decent rental options through online listings, newspaper classifieds, agencies, or property shows. Some privately owned rental property agents choose tenants on referral basis. You can ask your fellow expats to point you to a suitable vacant rental unit whose property owner is looking to let.
Searching for a house online is one of the easiest and cheapest options for a foreigner. Not only do you avoid the hefty agency fees, but you can do a little research and find out what housing options are available and at what prices. Online rental websites allow you to narrow down the search to your current neighborhood or locate a suitable expat community for you to join.
One useful website to search rental property in is Sublet. Their quick search feature allows you to locate apartments or houses within your current region. The website gets frequently updated with new listings of family houses, furnished, unfurnished, or serviced apartments as well as units for subletting.
To boost your online search, check out Apartments Jakarta. This website gives you a list of rental units available in Jakarta. The rental complexes on this site are often from individual owners or property agencies managing the houses. You can also request your expat friends to suggest more websites with a listing of affordable and convenient housing plans.
Newspaper classified ads
Most Indonesian newspapers have a classified section for real estate advertising. Such classifieds often provide information about available properties for rent in various parts of the country. Property owners are also allowed to advertise on newspapers, thus there is a great chance of landing a house or apartment directly from the owner.
Newspapers often have their own list of real estate clients they advertise for. So if you cannot find the rental unit you want online, your next best bet is a classified ad in the papers. Combining both online and newspaper listings greatly increases your chances of finding a suitable property for rent in Indonesia.
There are international real estate companies in Indonesia. These companies also post their information and contacts in the real estate sections of newspapers.
Real estate agencies
If your Indonesian employer does not offer accommodation as part of their employment package, they may refer you to a trusted real estate agent. Most employers partner with agents to help find accommodation for expats.
In case you decide to house hunt on your own, then it is always advisable to visit the agent in person. Choose an Indonesian real estate agency that understands the local real estate market as well as your housing needs. Indonesian real estate agents are known to be quite friendly and helpful to clients seeking accommodation.
A real estate agent might be willing to do all the groundwork on your behalf. They may also be a helpful link between you and a potential property owner and may even negotiate a better rental price for you. it advisable to let your agent negotiate with the property owner, especially where language barrier is an issue.
Property shows are a favorite of foreign investors looking for rental property in Indonesia. These are usually exhibitions where property managers and potential investors meet to discuss business. The listings you find here are from top respected property developers, thus providing great property owning opportunities for investors.
Contact property managers looking to rent or lease their property. In addition, visit property shows to see what is on offer and also get leads to potential rental units.
Always read through the terms and conditions of a contract before signing it. Never sign anything until a property lawyer has read through the contract as well and ascertains that the terms are fair for both parties.
Property owners often request security deposits before signing contracts. The amount is usually an equivalent or percentage of the rental price and this amount will vary with different contracts. Only sign a subletting contract after inspecting the house and ensuring everything is in order. Take picture of anything that is damaged or not in order before moving into a rental property.
The cost of housing in Indonesia has steadily risen over the years, unaffected by the global financial crisis. Nevertheless, there are plenty of affordable opportunities for buying property in Indonesia as a foreigner. In addition, the strict rules of land ownership imposed on expats have been relaxed after the major land ownership reforms that happened in 2015.
When purchasing property in Indonesia, it is important to take the time and do your research. Find out about the area you want to invest in and compare prices with other towns or cities. Previously, native Indonesians could own the rights to land, but now this privilege is shared with eligible foreigners as well. However, expats own land for a specified period, which can be further extended by the Indonesian land office.
As an expat relocating to Indonesia, the housing options you can purchase include family houses, apartments, and condominiums. Only foreigners living in Indonesia on temporary or permanent permits are allowed to buy houses to live in or sublet. In addition, if an expat investor can prove that their business will bring value to the Indonesian people and the environment they live in, they will be allowed to own land or property.
Indonesian land ownership agreement for foreigners
Foreigners in Indonesia can buy property under the ‘Right of Use’ agreement or the Hak Pakai. The Hak Pakai has a number of regulations to be followed if an expat is to legally buy or lease property for their own interests.
The ‘Right of Use’ act stipulates that foreigners can own land only for a period of 30 years. However, this period can be extended twice; for an additional 30 years and thereafter for 20 years. Foreigners can only own land for a period of 80 years, after which they pass land rights to an Indonesian native or the Indonesian government.
Secondly, the property must be purchased directly from the landowner or developer. Expats can only buy land at a minimum fixed price and this figure will vary with respect to the region the property is located in. Once the expat has successfully acquired the land or property, they are not allowed to sublet the land or property to other individuals.
When an expat relocates to another country, their legal land ownership privileges are revoked. The expat is then required to pass the Right of Use to another expat who is equally qualified to buy property in Indonesia. If the foreigner cannot find anyone eligible, then the state will automatically reclaim the land.
Owning land through a foreign company
Expats can buy property through a property development company owned by foreigners. This is made possible through the legal act known as the Penanaman Model Asing, or PMA. The PMA act provides a couple of land ownership privileges to the foreign owned real estate company.
The PMA company will be allowed to be in business for a period of 30 years managing land. This contract is extendable for another 30 years as the company grows its assets and net worth. If the PMA business exudes direct value to Indonesia and is need of more investor capital to continue doing that, the contract can be extended for another 30 years.
Expats can choose to work with an existing PMA company or form their own to buy and manage property in Indonesia. To form a PMA company, one must draft a detailed business proposal outlining the core reasons why they want to buy, build, or manage property in Indonesia.
The PMA company must ensure it creates value in three ways. First, the foreigners must ensure that the skill they are bringing to the table is invaluable and cannot be hired locally. Secondly, the PMA company must aim to create employment opportunities for Indonesian natives. Thirdly, the PMA company has to ensure all its business dealings have a positive impact on the environment.
On the other hand, an existing foreign-owned company that wants to venture into real estate businesses in Indonesia can do so under certain conditions. To acquire the PMA permit, the company will have to prove that real estate investment will be a profitable asset to the company’s business portfolio. You will also be required to make a deposit to an Indonesian bank, which is a percentage of the total capital that will be invested in the real estate business.
It should take three to four months to complete the whole application process and get your PMA license approved. A company that is just starting out can apply for a maximum of three PMA permits. A PMA agreement should not cost more than $3,000 to set up.
What you should know before buying land
Land in Indonesia is sold as either registered or unregistered land. Registered land is state-owned while unregistered land is mostly sold by a local Indonesian community. The rules for both cases are quite different and it is important to familiarize yourself with them before signing any contracts.
It is possible to acquire rights to land through an Indonesian sponsor or representative. In most cases, expats consider their Indonesian spouses as the chief representative. Whether you choose a spouse or friend to represent you, it is important to draft legal agreements that protect either party and puts everyones interests into consideration.
There are three kinds of agreements to make with your representative. One is a loan agreement that outlines the foreign buyer as the sole funder of the whole purchase. Secondly, the irrevocable power of an attorney is necessary to give the expat full rights to lease, sell, or mortgage the land at will. Thirdly, a permanent right of use agreement is crucial to give the expat rights to use or occupy the property for the period in which the contract is valid.
Cost of owning property in Indonesia
Besides the actual value of the property itself, there are additional costs to be aware of as an expat buying property in Indonesia. There is property tax, which is usually 0.5% of the property value. A second additional cost is property sales tax, which is paid by both the seller and buyer of the property; this is normally 5% of the property value paid by both parties.
You also have to consider property insurance, especially in Indonesia where natural disasters are common. There are certain regions in Indonesia that are frequently hit by earthquakes, tsunamis, and tropical storms. Conduct research about the area to determine the kind of insurance policy you need to get for your property.
Lastly, there are the stamp duty payments to get the blue seal of approval known as ‘meterai’. The meterai gives official notice that all signed land ownership documents are legal and valid. The blue stamp costs Rp 6000 and can be found in any Indonesian Post Office or ‘Kantor Por’.
Consider if you want (or are able) to transport your belongings yourself or whether you will need the services of a removals company that deals with international moves. Unless you are travelling very light, or making a fairly short move by road, you will probably need professional help to ship your possessions. Ask for quotes from several companies first, ensuring that they visit your home to carry out a survey of your requirements. It may be worth paying extra for the removals firm to pack your possessions for you, particularly if they are going to be transported to a distant country and need special protection for the long journey. Make sure you bring to their attention anything fragile or precious that needs particularly careful wrapping and packing.
Before agreeing to a quotation, ensure that you are fully aware of exactly what is covered in the price, and that the service to be provided meets all of your requirements. For example, does the service include both packing and unpacking of your household effects? What about disassembling and reassembling of furniture? If you are planning to put anything into storage in your destination country while you find accommodation, does the price include final delivery and unpacking at your home, or will you need to arrange collection of the items? Obtain a firm estimate of the likely arrival date of your items and obtain contact details for any agents that will be dealing with the removal in your destination country. Ensure that the removals company is aware in advance of any practical considerations such as the lack of an elevator to your apartment, or likely parking problems.
If using a removals company, you may be required to take out their insurance cover for your possessions. Whether or not this is the case, ensure that you have adequate insurance for anything of actual or sentimental value that could get lost or damaged during the move. Take the time to accurately complete or check an inventory of your possessions to be moved, as this will form the basis for any insurance claim for losses or damages. Find out if insurance is included in the price quoted by the removals company, or whether you are required to pay extra for this.
The removals company should arrange any customs and importation documents on your behalf, but if you are arranging the move independently you will need to find out what documents are required and what import duties and taxes are payable (and whether you are eligible for exemption from these).
Make sure that you set aside the important documents you will need for the journey, such as passports and air tickets, and keep these easily accessible in your hand luggage.
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QUICK LINK: Indonesia health insurance
As an expat, you will not be eligible for national healthcare and you should make sure either that your employer has arranged comprehensive private coverage as part of your employment package, or that you take out private cover yourself. Many expats travel to Singapore for their healthcare needs, so you should check that any private cover you take out covers treatment in Singapore or neighbouring regions, and also has provision for medical evacuation.
If you apply for a Limited Stay Visa (KITAS) you will need to present private health cover as part of your application.
Indonesia has more than 100 commercial banks operating in the city and parts of the rural areas. These banks are either locally owned or subsidiaries of foreign banks operating in Indonesia. It is possible to open a bank account as a foreigner in Indonesia, but the procedure for opening a new bank account is, at times, strict and lengthy.
The national currency for Indonesia is the Rupiah, abbreviated as Rp. Before you open a bank account in Indonesia or transact any money, it is important to understand how the Indonesian rupiah works. Normally, the rupiah is exchanged in both notes and coins of varying denominations. However, due to inflation, most of the Indonesian rupiah coins have been rendered obsolete.
Rupiah notes are issued in denominations of either Rp 1000, Rp 2,000, Rp 5,000, and Rp 10,000 notes. You can also expect to see Rp 20,000, Rp 50,000 and Rp 100,000 notes in your daily transactions. Only the Rp 1000 note is issued in coin form as well, though the 1000Rp coin is also quickly being phased out.
Rupiah coins are issued in various denominations including Rp 100 and Rp 50. The Rp 50 coins are hard to come by because of their shortage and their lost value due to inflation. Thus smaller amounts of change are often rounded up or down, and in some cases, especially in shops, condiments are offered instead of coins as change.
Opening a bank account in Indonesia
As a foreigner, always choose a bank that meets all your financial needs. You have the option of opening an account with a regional bank or one of the national Indonesian banks. Banks in Indonesia open from 8am to 3pm from Monday to Friday. On weekends, the operating time is between 8am to 1pm.
Some of the national Indonesian banks include Mandiri Bank, PT Bank Internasional, Danamon Bank, CIMB Niaga Bank, and Indonesia TbK. Foreign banks in Indonesia include the Bank of America, Royal Bank of Scotland, Deutsche Bank AG, Bank of China Limited, HSBC Indonesia, and JP Morgan Chase. Foreign banks allow you to open a foreign currency account or rupiah account.
There are about 5 Islamic banks in Indonesia operating under Sharia Law. The Islamic banks follow the decree of Sharia that dictates no interest to be charged on transactions, neither will such banks accept fixed or floating payments. In addition, Sharia banks do not finance businesses whose product or service is considered Haram according to Islamic law.
Opening an account with one of the Indonesian banks should be pretty straightforward. However, the foreign banks are a bit stricter as they take intensive measures to protect themselves from fraud. As an expat, it should be easy to open an account with a foreign bank you are already banking with. If you do not currently have an account with a foreign bank that operates in Indonesia, then you will have to provide some information before your new account is approved.
To open an account with a foreign bank, you will be required to provide a copy of your passport. A copy of your temporary visa permit, KITA OR KMS, will also be asked for. If you are a permanent resident in Indonesia, the banks will ask you to produce your permanent residency license card or KITAP. If you are working in Indonesia, then a reference letter from your employer or sponsor will be mandated.
For anyone wanting to open a checking account with a foreign bank in Indonesia, there are more rules to follow. The bank will ask for a reference letter from a previous bank as well as the tax registration number of the company that employs you. Your employer will also have to prove that they are making their tax income remittance on behalf of you as their employee.
Most banks accept a minimum of Rp 500,000 to open an account with them. It should take a day to activate your new bank account. Debit and credit cards are issued on the same day as well. Opening a US dollar account also requires a minimum operating balance and this sum varies with banks. There are banks that will allow you to open an account if you have a sponsor holding an account with the same bank.
Using ATMs in Indonesia
Every major Indonesian bank should have an ATM lobby right next to it in a city or rural area. Indonesians love to make most of their financial transactions at ATM points to avoid the bank queues. ATMs in Indonesia can be used for money withdrawals and payment of bills.
Before you open a bank account, find out if the bank in question is affiliated with the ATM network, Prima. This ensures that you make transactions at no charge from any of their ATM branches. Note that all bank ATMs in Indonesia, with the exception of Citibank, will dispense money in Rupiah even if you hold a US Dollar account.
As a safety precaution, avoiding withdrawing money from ATM points located in isolated or poorly lit areas. Never withdraw large sums of money at once, and always tuck your money away safely before leaving the ATM lobby. Unsuspecting foreigners are often targeted and robbed at ATM cash points.
Acquiring a Credit Card in Indonesia
It is generally difficult for an expat to acquire a credit card in Indonesia. This is because of the many prevalent cases of credit card fraud committed by non-Indonesian account holders. Only if you hold a previous credit card with your respective bank will you be allowed to renew it or take out a new credit card.
In cases where an expat is granted credit card privileges, the process is often an expensive one. Indonesian banks will require a deposit that is 80% to 100% of the total credit available on the card you are applying for. Otherwise, most credit card applications by foreigners often go unprocessed or are hit with a rejection stamp.
If you already hold a credit card as a foreigner, you have to be careful with how you use it. Avoid using your credit card for small transactions like paying for drinks in a bar or paying for items in a shop. Your credit card information can easily be stolen and used to commit fraud. Always shred credit card receipts to prevent them from ending up in the wrong hands.
Expats can open accounts with Indonesian banks but the process can be quite involved at times. However, the process may be faster if you have an Indonesian sponsor and can prove your residency as a temporary or permanent citizen. With the many cases of financial fraud in Indonesia, always keep all your money transactions safe and private, regardless of whether you are using ATMs or credit cards.
There are many ways of sending money from one country to another. As always, expats can save themselves a lot of trouble and expense if they do a little research and shop around for the best deal.
International Bank Transfers
For most expats, currency transfer involves transferring small to medium sized amounts regularly from an existing bank account back home into a new overseas bank account in the local currency. These may be pension payments, benefits, or any other form of income.
Your home bank will usually be glad to oblige. You can set up facilities with them “on demand” whereby you fax or call them on the phone, provide a secret code or two, tell them the amount in question, and they will transfer it to your new bank, automatically converting it into the relevant local currency. Some banks also allow you to make international payments online. Whatever method you choose, transfers normally take between 3-7 days although 1-2 day transfers are often available but be prepared to pay more for these.
You can also set up regular transactions that are processed automatically on a fixed day of each month. Many state pensions and benefits can be paid directly into your new bank abroad without going through your home bank at all. Some private pension organisations may also offer the same facility.
When you first set up a transfer of funds abroad, the sending bank or institution will ask you for various codes that identify the destination bank. Often they will ask for IBAN (International Bank Account Number), BIC (Bank Identifier Code) or SWIFT codes but don?t panic – your new bank will give these to you and they may even already be listed in your new chequebook or bank statements.
As far as charges are concerned, you will probably be required to pay a flat fee per transaction. Additionally a percentage fee is often charged for the currency conversion itself. You may also find that your receiving bank charges you for receiving the transfer. Charges vary by bank but can quickly add up – ask your bank(s) for an indication of the fees involved.
As a general rule, transferring larger sums less frequently usually works out cheaper than transferring smaller amounts more often. However, if you need to transfer regular amounts of at least a few hundred pounds/dollars or need to make a larger one-off payment (e.g. for a house purchase) you should consider the services of a currency broker.
Cash Machine/ATM Withdrawals
Thanks to modern technology, most people abroad can go to a cash machine/ATM and withdraw local currency funds directly from their home bank account. This is a useful option to have for expats but exercise caution – many banks make hefty charges for using this type of facility. You may also find that withdrawal limits are in place (as a security measure) even if you significant funds in your account back home.
You can also use VISA or Mastercard credit cards to obtain cash in this fashion and if you pay the amount off quickly and avoid interest charges then fine – but once again credit card charges for cash withdrawals can be high. Check the rates carefully.
Currency brokers (also called foreign exchange brokers) offer significant advantages over traditional banks. Firstly, brokers will often be able to offer you a better rate than your bank. Secondly, the entire process is more transparent – many banks require you to accept the exchange rate available on the day they process your transaction, whatever and whenever that may be, but a specialist broker will offer greater flexibility, even allowing you to specify the rate you want in advance.
Currency brokers are smaller companies than major banks so always check their background carefully. Ask existing expats for their own experiences and recommendations before choosing a firm to handle your own foreign exchange requirements.
A good broker will discuss all the options with you and enable you to make the best decision for your circumstances. Using a broker will typically off the following advantages:
1) Currency brokers generally provide superior exchange rates to the high street banks. The currency brokers have access to the interbank rate and do not have the high costs that the banks have. This means that they can usually offer better exchange rates.
2) Use of a free Market Watch/Order Service: This allows you to tell your currency broker your target or budget exchange rate and they will ring you if that exchange rate level is reached. As the rate moves every few seconds, currency brokers can act as your eyes and ears on the market.
3) Ability to fix the exchange rate in advance using a Forward Contract. If you know you need to convert/move funds in the future but don?t yet have the money you can reserve a rate in advance using a Forward Contract. During this period, you are exposed to exchange rate movements and therefore, a forward contract is ideal if, for example, you have agreed to buy a house and want to fix the rate now but will not be making payment for a couple of months.
Savings from currency brokers can vary from between 1 and 4 per cent on the exchange rate alone, and specialists do not typically charge any fees for transmitting the funds abroad, unlike banks which often levy expensive fees or charges. If you are emigrating and transferring a large sum of money – such as the proceeds of a property – a foreign exchange company could potentially save you thousands.
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Indonesia is home to many languages and if you are going to be living and working in the country as an expat, you may be asking yourself whether you will need to learn a local language, which one to learn, and whether you will be able to make yourself understood in English. We will look at some of your options below.
Indonesia is home to around 240 million people and there are many languages spoken across the country: around 700 in total. The official language is Bahasa Indonesian (called simply Indonesian in English). This is a member of the Austronesian language group and is basically a standard dialect form (bahasa baku) of Riau Malay. Most Indonesians who speak it use it in formal situations, but the vernacular tends to be varieties of Malay.
The language derives from Old Malay, spread by traders across SE Asia, but it has also been influenced by ‘trader’s Malay,’ Melayu pasar (“market Malay”), High Malay (Court Malay) and in later years by Javanese and Dutch. Sanskrit, Arabic, Persian, Tamil, Chinese and Hebrew have also contributed to the language. Although the Dutch were a colonial power, they did not impose their language and thus it was easily supplanted by Indonesian. When Indonesian was announced as the national tongue, in 1945, only around 5% of the population spoke it.
It is now the official language used in government, the media, universities and other more formal aspects of life.
Other languages spoken in the country are:
Javanese, a Sunda-Sulawesi language, is commonly spoken as a first language by around 98 million people in Yogyakarta, Central Java and East Java, and so is Sundanese, spoken by around 42 million people including those in West Java, Banten and Jakarta. Others include the Batak languages in the North Sumatra Highlands, the Barito languages, plus Minangkabau and Musi, and many more.
In addition, there are many forms of alphabet used in Indonesian: the language can be written using Arabic or Tamil scripts. However, it is usually written formally in Indonesia using the Latin alphabet, which makes things easier for English-speaking expats.
Most Indonesians will be bilingual in their local tongue and Bahasa Indonesian. They may well speak other languages as well, including English, but levels of proficiency in English across the country are not considered to be high: linguistic experts say that there is limited understanding of English as an international language and in addition a lack of focus on English in Indonesian schools, although this has started to change in recent years with more provision of English in the education system. You may find that English is very limited in some areas of the country, particularly more remote rural places.
English is, however, widely used in tourist areas such as Bali, and is one of the workplace languages of the country. Most international companies will only hire Indonesians if they can speak English, so you should not have too much difficulty communicating with your colleagues.
Indonesian is not an easy language for Westerners to learn. However, you may wish to try to learn some of the language: this is not only polite but practical, as you may be visiting areas in which English is not widely spoken and it will be helpful to have some basic phrases as a lingua franca even if, for example, you are travelling in a mainly Javanese-speaking region.
There is plenty of provision for training in Bahasa Indonesian in the country, particularly in big centres such as Jakarta, and you can find some online resources as well. Do be aware, however, that you will be learning the formal language, not the vernacular, and it might be as well to ask a local friend to school you in some of the basic phrases: some expats have discovered that although they are able to read the language quite well, they can’t understand anyone or make themselves understood. The language spoken by younger people may also be very colloquial and difficult to understand.
You may wish to teach English in Indonesia and are most likely to find work in large urban areas such as Jakarta, Yogyakarta, Bandung, and Surabaya.
It is always easier to get work in international education if you have at least a certificate in either TEFL (Teaching English as a Foreign Language) or TESOL (Teachers of English to Speakers of Other Languages).
It is also preferable if you have experience in teaching schemes such as the Cambridge English exams or IELTS (International English Language Testing System): the English test for study, migration or work. Some teaching experience in the Graduate Management Admission Test (GMAT) will also be helpful. This assesses analytical, writing, quantitative, verbal, and reading skills in written English for use in admission to graduate management programs, such as the MBA. You may also find work more easily if you are experienced in teaching English for particular sectors, such Business English. You are most likely to find work in a private language school.
It will also be helpful to have at least a Bachelor’s degree as most language schools prefer this even if it is not a formal requirement in every school: basically, the rule of thumb is that the more qualifications you have, both in TEFL and in academic subjects, the easier you will find it to get work. Your salary is likely to be in the region of US$650 – 1050 per month and you will need a work permit, which may be sponsored by your employer.
With an increasing population now approaching 275,000,000, and a continuing process of urbanisation, Indonesia faces many ongoing challenges, including the provision of adequate and apposite education for its populace.
Indonesia spends around 3.6% of its GDP on education. This is significantly lower than the OECD average, although literacy rates are around 95%, but the Indonesian PISA rating is well below the world average.
State education in Indonesia, under the control of the Ministry of Education and Culture and the Ministry of Religious Affairs, is reasonably well funded. However, given the huge numbers it must provide for, it faces continuing challenges to improve both quality and accessibility, including a general shortage of qualified teachers and materials, especially in rural areas.
Critics of the state system point to its reliance on rote learning and a policy of rigid conformity, which tends to stifle creativity and critical thinking, characteristics considered by educationalists worldwide to be vital for a nation’s progress. The system is huge – there are almost a quarter of a million educational establishments in the country.
Tuition for resident children is compulsory, and provided free of charge from age 7 -15. Indonesian pre-school and kindergarten is not compulsory, but widely available.
Compulsory (and free) education lasts nine years – from ages 6 – 15:
primary school – ages 6 – 11
junior secondary school ages 13 – 15
senior secondary school is then available for ages 16 – 18
Students obtaining the necessary grades to enter upper secondary will be offered a choice of academic or commercial schooling. Those continuing their academic studies will attend higher secondary school for a further three years, while those electing for commerce or vocational college will be offered the chance to train for jobs in finance or technical fields, with varying periods of tuition. After completing the full program, students will take a final exam – the Higher Secondary Certificate Examination (HSCE), with many successful students then going on to university here or elsewhere in the world.
Homeschooling is an option that many expats consider here, given the potential language issue, and the relatively high cost of private tuition. Homeschooling is legal in Indonesia, and is becoming more widespread.
Many expats will still be looking at the possibility of having their children educated in private schools with tuition in their own language, and under their own national system if possible.
There are a large number of private schools in Indonesia, many not-for-profit and state-regulated, with a considerable number running in English, and there are also a good number of fee-paying full international schools, many of which offering the popular International Baccalaureate Diploma Program (IBDP), which is recognised worldwide.
Should you require it, day care for infants and pre-school kindergarten (ages 3 – 6) can be arranged locally. Many of the international schools also have nursery facilities.
Private and international schools in Jakarta include:
• Kharisma Bangsa School, Jakarta (English, British curriculum, 3 – 18)
• Raffles Christian School, Jakarta (English, International Christian)
• North Jakarta International School, Jakarta (English, International/American curriculum, 3 -18)
• Stella Maris, Jakarta (English, British and IBDP)
• Beacon Academy, Jakarta (English, IBDP – 6 – 18)
• Singapore International School, Jakarta (English, Singaporean and Cambridge programs, IBDP)
• Australian Independent School, Bali (English, Australian curriculum pre-school – grade 12)
• Jakarta International School (English, American curriculum, IBDP 3 – 18)
• British International School, Tangerang (English, British curriculum, IBDP, 3 – 19)
• Gandhi Memorial International School, Tangerang (English, full IBDP 3 – 18)
• Springfield International School, West Jakarta (English, Christian, 2 – 18, Cambridge exam curriculum)
• Sekolah Tiara Bangsa (ACS) International School, Jakarta (English, Cambridge and IBDP, 3 – 18)
• North Jakarta International School (English, American curriculum, pre-school – high school)
There are many others to consider, including French, German, Japanese and Korean schools.
It is vital to contact the school of your choice as soon as possible, as competition for places is generally fierce. Fees need to be established with the individual school, and those offering the full IBDP are generally expensive, especially at the senior level. Additionally, you are always advised with private and international schools to read the small print as some may have ‘capital investment’ fees for maintenance/enhancement, and other charges.
On graduation, local and international students may wish to continue their education either at one of the excellent universities here, or across the world. Successful graduation from an Indonesian school, with A-Levels or the IB, will ensure that your child has the best possible chance of continuing their education wherever they choose.