“BKPM and the Immigration confirmed that there is no longer requires the BKPM Recommendation in applying for Investor Visa. However, the Investor should be stated as a shareholder of the Company with a minimum of shares IDR 1,125,000,000 (one billion one hundred and twenty-five million Rupiah) and if the Investor also having a position as a Director or the Commissioner in the Company, the minimum of shares should be IDR1,000,000,000 (one billion Rupiah).”
Indonesia Investment Coordinating Board (BKPM) and Directorate General of Immigration announced the official announcement on an amendment to the procedure related to the limited stay visa application for foreign investors. Started from 2 September 2019, application for a limited stay visa could be filed directly to the website provided by the Directorate General of Immigration without attaching the recommendation provided by BKPM.
Investor Limited Stay Visa is Not Required a Recommendation From BKPM
BKPM issued Regulation of Chairman of Investment Coordinating Board The Republic of Indonesia Number 5 of 2019 on Amendment Regulation of Chairman of Investment Coordinating Board the Republic of Indonesia Number 6 of 2018 on Guidelines and License Procedure and Capital Investment Facilities (“BKPM Regulation No. 5 of 2019”) on 22 July 2019 and become effectively by 29 July 2019.
Based on Article 48 point 2 BKPM Regulation No. 5 of 2019, the foreign Investor should obtain a recommendation letter from BKPM before apply for the investor limited stay visa.
However, BKPM Casu Quo (Cq) Directorate General of Immigration announced the official announcement that annulled the provisions that previously were in force, the said provisions were the provisions contained in Article 48 (1) BKPM Regulations No. 5 of 2019 which stipulated that the recommendation as stated in Article 47 of the regulation is a requirement to obtain a limited stay visa.
That being said, since 2 September 2019, in order to apply for a limited stay visa, the individuals intended to do so does not need to acquire a recommendation derived from BKPM, but they could apply to the website directly using Business Identification Number (NIB). The second part of the announcement is that all of the applications that were submitted before 2 September 2019 will be processed as usual.
To clarify this information, we did a consultation with the Visa Sub-Directorate of Directorate General of Immigration also BKPM itself, and they confirm that the announcement is true and is in effect.
Minimum of Shares
As for the minimum of shares that Investor should have, it is well explained on Article 48 point 3 BKPM Regulation Number 5 of 2019, which tells:
“The foreigner as the shareholder must meet the following criteria”:
a.if they play a role as a shareholder also as a director or commissioner of the Company with minimum shares owned IDR1,000,000,000 (one billion Rupiah) or equivalent with USD as mentioned on the deed; or
b.as a shareholder only with minimum shares owned IDR1,125,000,000 (one billion one hundred twenty-five million Rupiah) or equivalent to USD as mentioned on the deed. “
Although the above provision mentioned in the term of obtaining the recommendation letter and it is already annulled by the Official Announcement from the BKPM and the Directorate General of Immigration, the minimum of shares is still valid for the investor who want to enter Indonesia with the investor visa. The number of shares owned and it should be mentioned on the deed.
Therefore, the investor who had a position as a Director or Commissioner and their shares under IDR 1,000,000 (one billion Rupiah) or investor who are not being Director or Commissioner and their shares is below IDR 1,125,000 (one billion one hundred twenty-five million Rupiah) are not eligible to hold an investor visa.
The alternative is, for the investor who is a Director or Commissioner and they are not eligible to hold the investor visa, they may apply for the regular work permit as a Director or Commissioner as stated in the Article 50A BKPM Regulation No. 5 of 2019. As for the Investor who is not being a Director or Commissioner and they are not eligible to hold an Investor Visa, they may apply for the visit visa to enter Indonesia.
The Stay Permits Which Still Required a Recommendation Letter from BKPM
BKPM Regulation No. 5 of 2019 mentioned that there is any three categories who still need the BKPM Recommendation Letter due to applying a limited stay permit in Indonesia.
a. Converting a Visit Visa to the Limited Stay Permit
Based on Article 49 BKPM Regulation No. 5 of 2019, BKPM recommendation letter is required in the event of investor who enter Indonesia with visit visa and they want to change their visa to the Limited Stay Permit (Izin Tinggal Terbatas/ ITAS).
The minimum of shares should be owned by the investor is still same:
a)IDR1,000,000,000 (one billion Rupiah) or equivalent with USD as mentioned on the deed for the Investor who being a Director or Commissioner; or
b)IDR1,125,000,000 (one billion one hundred twenty-five million Rupiah) or equivalent to USD as mentioned on the deed, for the Investor who are not being a Director or Commissioner.
b. Converting the Limited Stay Permit to the Permanent Stay Permit
It is possible to convert the Limited Stay Permit (Izin Tinggal Terbatas/ ITAS) to the Permanent Stay Permit (Izin Tinggal Tetap/ITAP) which valid for five (5) years. It regulates on Article 50 BKPM Regulation No. 5 of 2019. However, there is any minimum of shares as the following matters:
a)IDR1,000,000,000 (one billion Rupiah) or equivalent with USD as mentioned on the deed for the Investor who being a Director or Commissioner; or
b)IDR10,000,000,000 (ten billion Rupiah) or equivalent to USD as mentioned on the deed, for the Investor who are not being a Director or Commissioner.
Procedure Obtaining the BKPM Recommendation Letter
a) Submit a Petition for Recommendation Letter
For obtaining the recommendation letter at BKPM, you must firstly take a queue number in the BKPM Office manually. After that, you have to go to the Central PTSP of BKPM for the process of documents submission. The documents required for obtaining the recommendation letter from BKPM as mentioned by the appendix of Investment Coordinating Board Regulation Number 5/2019 are:
a.Record of Company Tax Payer Confirmation Status (KSWP);
b.Company’s Guarantor/ Person In Charge identity record;
1. if director/commissioner:
– Foreigner : passport, a valid stay permit, Taxpayer Identification Number (NPWP), and Record of Company Tax Payer Confirmation Status (KSWP)
– Indonesian : Identity Card (KTP), Taxpayer Identification Number (NPWP), and Record of Company Tax Payer Confirmation Status (KSWP)
2. if personnel manager (must be Indonesian) : Identity Card (KTP), Taxpayer Identification Number (NPWP), and Record of Company Tax Payer Confirmation Status (KSWP), and Appointment Letter as Personnel Manager
c. Shareholder Passport Record; and
d.Power of Attorney;
1. To sign the Petition if the Petition is not conducted by the Company’s Person In Charge;
2. To manage the Petition if the Petition is not submitted directly by the Company’s Person In Charge.
b) Recommendation Letter Issuance
After the submission of the document, the BKPM will issue the Recommendation Letter (3) business days from the complete submission and correct application (BKPM Chairman Regulation Number 13/2017). However, commonly practice BKPM will issue the recommendation letter in between 5 (five) to 7 (seven) working days since the completed and valid documents.
The removal of the obligation to obtain a recommendation from BKPM to apply for limited stay visa could be seen as one of the government’s effort to simplify the investment process thus inviting more foreign investors to come and invest in Indonesia. However, other requirements would potentially stand as a hindrance to that goal, one of them is the requirement to hold a minimum amount of shares for a foreign investor to be able to apply for a limited stay visa. Nevertheless, this could be seen as a starting point towards a better and simpler investment process.
Author: Muhammad Satryo Wibowo / Latifah Kusumawardani
Gaffar & Co. Indonesian Boutique Law Firm that focused on commercial law areas includes employment law.
For further queries and information, contact us:
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