New Indonesia regulation on foreign employment and knowledge transfer programmes in commercial banks in force

13 April 2026

On 6 February 2026, Indonesia’s Financial Services Authority (Otoritas Jasa Keuangan “OJK”) issued Regulation No. 1 of 2026 on Foreign Employment and Knowledge Transfer Programmes in Commercial Banks (“Regulation 1”), which took effect on 23 February 2026 replacing OJK Regulation No. 37/POJK.03/2017 (“Regulation 37”).

Regulation 1 harmonises the rules and regulations regarding the employment of foreign citizens who holds a visa for the purpose of working in Indonesia (“foreign workers”) in the banking sector with Minister of Manpower Regulation No. 8 of 2021 on Foreign Employment and Law No. 6 of 2023 on Job Creation. It seeks to enhance the resilience and competitiveness of the banking sector, promote national economic development in strategic areas, and support knowledge transfer programmes and human resource development.

Overview of requirements to employ foreigners

Regulation 1 applies to commercial banks (“Banks”), foreign bank branch offices (“FBBs”), and foreign bank representative offices in Indonesia (“FBRs”). Regulation 1 defines a Bank as a bank that carries out conventional and/or Sharia-based business activities and provides payment services, including through FBBs and Sharia business units. An FBB is defined as a branch office of a Bank incorporated and headquartered abroad, while an FBR is an office of a foreign bank incorporated and headquartered abroad that acts solely as a liaison between the foreign bank and its customers in Indonesia. Banks, FBBs, and FBRs are able to employ foreign workers in their business operations, subject to specific requirements as set out below.

Requirements

 Regulation 1 stipulates that Banks wishing to employ foreign workers must:

• have a minimum of 25% of its shares owned by foreign citizens and/or legal entities; and
• only appoint a foreign worker in the following roles: as a member of the board of directors, a member of the board of commissioners, an executive officer, a specialist, an expert, and/or a consultant.

If foreign citizens and/or legal entities own less than 25% of a Bank’s shares, the Bank may only employ foreign workers as experts or consultants. However, if they are controlling shareholders of the Bank or are otherwise deemed to have control over it, the Bank may employ foreign workers for positions on the board of directors, the board of commissioners, and/or as experts or consultants.

If a Bank employs foreign workers in positions on the board of directors, the board of commissioners, and/or as executive officers, the majority of the board of directors and executive officers, as well as at least 50% of the board of commissioners, must be Indonesian citizens.

An FBB may only employ foreign workers in leadership positions and/or as experts or consultants. Leadership positions in an FBB consists of the branch manager and officials who report directly to the branch manager. To employ foreign citizens in these leadership positions, an FBB must have at least one Indonesian citizen in a leadership position.

FBRs may only employ foreign workers in leadership positions as chief of the FBR and/or as an expert or a consultant.

Functions

Banks and FBBs may employ foreign workers in treasury, risk management, information technology, credit or financing, investor relations, marketing, finance, and internal audit roles. However, they are prohibited from employing foreign workers in human resources and compliance roles, except in the case of a Bank’s overseas offices.

Specific conditions

Banks may employ foreign workers in other positions or functions under specific conditions, subject to OJK approval. These conditions include instances where a Bank faces a significant risk of loss without employing foreign workers, or where the local workforce is unable to meet the required skill levels. Such approval serves as the formal basis for the Bank’s recommendation to the Ministry of Manpower (“Ministry”). Approval is granted based on the Bank’s needs, the availability and capabilities of local workers, and the principle of reciprocity. OJK issues its approval or rejection within a maximum of 30 working days upon receipt of a complete application.

Submission of manpower plans

To employ foreign workers, Banks (including FBBs) and FBRs must submit a manpower plan as part of their respective Bank business plans and FBR work plans to OJK for initial approval prior to further submission to the Ministry. A manpower plan sets out the Bank’s or FBR’s intentions in employing foreign workers in specific positions for defined periods.

A manpower plan must include (i) the reasons for employing foreign workers instead of local workers; (ii) the relevant positions and functions; (iii) the required number of workers; (iv) the duration of employment; (v) the name(s) of the local counterpart(s); and (vi) the knowledge transfer programme, including training plans for the local counterpart and foreign workers, as well as an overseas assignment plan for local employees.

Foreign workers applying for positions on the board of directors, the board of commissioners, or leadership positions in FBBs or FBRs must first obtain approval from OJK before the Bank or FBR applies to the Ministry for validation of the manpower plan. Approval from OJK for these positions is granted in accordance with the OJK Regulation on fit and proper assessments for key stakeholders in financial services institutions.

Banks that employ foreign workers as executive officers and/or specialists must also obtain OJK approval before the Bank applies to the Ministry for validation of the manpower plan. A specialist is a role that requires specific skills based on the Bank’s needs, including expertise in developing banking systems, technology, and innovation, as well as an understanding of the language, culture, and legal system of a particular country in order to serve foreign customers effectively.

OJK will provide its determination in relation to requests for its approval within a maximum of 30 working days upon receipt of a complete application.

Applications must be addressed to the Banking Supervision Department (Departemen Pengawasan Bank) for Banks headquartered, and FBBs, or FBRs located in Jakarta, or to the local OJK office in the region where the Bank’s head office is located.

Employment period

The employment period for foreign workers serving on the board of directors or the board of commissioners is determined in accordance with the applicable laws and regulations, including the OJK Regulation on the implementation of good governance for commercial banks.

The employment period for executive officers, specialists, experts or consultants, and other positions or functions under specific conditions is a maximum of five years.

Knowledge transfer

Banks or FBRs employing foreign workers as executive officers, specialists, and/or experts or consultants must implement knowledge transfer programmes. These programmes must involve appointing local counterparts, either two local bank workers for each foreign worker or one local FBR worker for each foreign worker. These local counterparts will work alongside the foreign workers throughout the programme. The programmes are required to focus on technology transfer and expertise transfer so that local counterparts acquire the necessary skills. Over time, they are expected to replace the foreign workers.

The programmes must also include education and job training for local counterparts in accordance with the qualifications required for the positions held by the foreign workers. Additionally, foreign workers must deliver training or instructions to Bank or FBR employees through seminars, training sessions, short courses, and/or other knowledge transfer activities, conducted both online and offline. They may also deliver public lectures and other forms of training or instruction to students and/or the general public.

The knowledge transfer programme plan that is submitted to OJK as part of the manpower plan must include the following: (i) the materials or competencies to be transferred; (ii) the implementation method; and (iii) the implementation timeframe and expected results.

Transitional policies

Banks that obtained OJK approval to employ foreign workers before 23 February 2026 and are still employing them may continue to do so until the end of the period specified in the approval.

Banks that have applied to OJK for approval to employ foreign workers before 23 February 2026 but have not yet received such approval will be granted approval under Regulation 37.

Foreign workers holding positions as executive officers and experts or consultants who have served for less than five years as of 23 February 2026 may have their employment period extended for a maximum of a further five years.