This is an important consideration for foreign shareholders holding an Investor ITAS (KITAS) or Investor ITAP (KITAP) in Indonesia.
In principle, an investor’s immigration status is closely connected to their shareholding, position as a shareholder/capital owner, and relationship with the company acting as their sponsor.
Accordingly, when the shares forming the basis of the investor status are sold, particularly where all shares are transferred, the relevant KITAS or KITAP status should be reviewed. Depending on the foreign national’s circumstances following the transaction, the immigration status may need to be adjusted, converted, or cancelled.
This becomes particularly important where, after selling the shares, the foreign national continues to work or perform functions as a director, commissioner, or professional within the company. In such circumstances, their immigration and employment status should be aligned with their actual circumstances.
1. Why Is Shareholding Important for an Investor KITAS?
In Indonesian immigration practice, investor status is generally granted to foreign nationals who have an investment interest in Indonesia and meet the applicable requirements for an investor residence permit.
For investors connected with a company, an important basis is the ownership of shares or capital in the company acting as the sponsor.
This is also connected with the Foreign Worker (TKA) framework. Under certain circumstances, directors or commissioners holding a certain level of share ownership, as well as certain shareholders, may be exempt from the RPTKA requirement under Government Regulation No. 34 of 2021.
Accordingly, share ownership is not merely a corporate matter. It may also directly affect the foreign national’s immigration and employment status.
In simple terms, an investor’s status should be assessed based on two key factors:
- whether the shareholding/investment still exists; and
- whether the relationship with the sponsoring company still exists.
The applicable requirements for an investor ITAS also demonstrate the importance of evidence of share ownership.
2. Why Can the Sale of Shares Affect an Investor KITAS?
Visas and residence permits in Indonesia are granted based on the foreign national’s purpose and basis for staying in Indonesia. The current visa and residence permit framework is regulated, among others, under Minister of Law and Human Rights Regulation No. 22 of 2023 on Visas and Residence Permits, as amended, including by Minister of Law and Human Rights Regulation No. 11 of 2024.
For an investor, this basis is connected with the investment activity and the foreign national’s relationship with the company or investment underlying the residence permit.
Therefore, where the shares forming the basis of the investor status are transferred, it is necessary to consider whether, after the transaction, the foreign national:
- still owns shares in the company;
- still meets the applicable minimum shareholding requirement;
- remains a director or commissioner;
- still has the same company as their sponsor; and
- continues to conduct activities consistent with their immigration status.
In other words, the sale of shares does not necessarily produce the same consequences in every case. The impact depends on how much of the shareholding is sold, whether the foreign national continues to meet the investor requirements, and what the foreign national does after the transaction.
3. What Happens If an Investor Sells Their Shares?
In practice, three main situations should be distinguished.
3.1. If All Shares Are Sold
The most straightforward situation occurs when a foreign national sells all of their shares and is no longer a shareholder.
In this situation, the foreign national’s relationship with the company as a capital owner comes to an end. If their immigration status was based on that capacity, the basis of their investor status may no longer correspond with the actual circumstances.
This may create a need to:
- adjust the immigration status;
- convert the status if another basis for residence is available; or
- leave Indonesia if there is no other basis for remaining in Indonesia.
This change should also be considered where the company or relevant parties report changes in shareholding or corporate positions to the relevant authorities.
3.2. If Only Part of the Shares Is Sold
A partial sale of shares may have different consequences.
If, following the transaction, the foreign national:
- remains registered as a shareholder;
- continues to meet the applicable minimum shareholding requirement; and/or
- remains a director or commissioner,
their investor status may, in principle, continue to be maintained, provided that all applicable requirements remain satisfied.
At the time of renewal, this position should be supported by updated corporate documentation, including:
- the company deed;
- AHU approval/registration documents;
- evidence of share ownership; and
- other documents required by Immigration.
Therefore, selling part of the shareholding does not automatically mean that the investor KITAS must be cancelled. However, the change in ownership should still be reviewed to confirm that the foreign national continues to meet the applicable investor parameters.
3.3. If There Is a Change of Sponsor or Corporate Structure
Another situation arises where the transfer of shares forms part of a corporate restructuring, such as:
- a transfer to a holding company;
- a merger;
- group restructuring;
- a change in the sponsoring company; or
- a transfer of the investment to another company.
In such circumstances, it is not only the shareholding that needs to be reviewed. The relationship between the residence permit and the sponsoring company may also need to be adjusted.
The immigration framework provides mechanisms for changes of status and sponsor to reflect changes in a foreign national’s circumstances.
Therefore, a corporate restructuring should not be viewed solely as a corporate transaction. It may also be an immigration trigger that should be reviewed from the beginning of the transaction.
4. What If the Foreign National Continues Working After Selling the Shares?
This is one of the risks that can easily be overlooked.
For example, a foreign national holds shares in an Indonesian PMA company and uses investor status. After selling all of their shares, they continue working as:
- Director;
- Commissioner;
- General Manager;
- Advisor; or
- another professional.
In this situation, the foreign national’s status should be reviewed.
One reason is that certain investors may be exempt from the RPTKA requirement under Government Regulation No. 34 of 2021. If the foreign national no longer meets the qualification underlying that exemption but continues working for the company, the company may need to comply with the general requirements applicable to the employment of foreign workers.
5. Risks If the Investor Status Is Not Adjusted
The main issue arises where there is a mismatch between the formal immigration status and the foreign national’s actual circumstances.
For example:
The foreign national still holds an investor KITAS, but all of their shares have been sold and they continue to work actively for the company.
In this situation, two aspects should be considered.
From an Employment Perspective
If the foreign national continues working but no longer qualifies for the investor-related exemption, the company may need to comply with the applicable foreign worker requirements, including requirements relating to RPTKA, DKPTKA, reporting, and other obligations under Government Regulation No. 34 of 2021.
Government Regulation No. 34 of 2021 regulates employer obligations in the employment of foreign workers, including RPTKA approval and administrative consequences for non-compliance.
From an Immigration Perspective
The residence status should also remain consistent with the foreign national’s purpose and activities in Indonesia.
If the investor status no longer reflects the actual circumstances, but the foreign national continues using that residence status to conduct activities in Indonesia, there is a risk that the status may no longer be considered consistent with the basis on which the residence permit was granted.
Accordingly, a change in shareholding should not be handled separately from a review of the foreign national’s KITAS/KITAP and employment status.
6. What About an Investor KITAP?
The same principle should also be considered for an Investor KITAP.
The conversion of an ITAS into an ITAP does not mean that the substantive basis underlying the previous status becomes irrelevant.
Each KITAP continues to have a specific basis for residence. Therefore, if the investor status underlying the foreign national’s residence in Indonesia changes materially, the KITAP should also be reviewed.
Key questions include:
- Does the foreign national still have the investment?
- Does the foreign national still meet the investor requirements?
- Is the sponsoring company still the same?
- Does the foreign national remain a director or commissioner?
- Does the foreign national continue working for the company?
- Is there another basis allowing the foreign national to remain in Indonesia?
The answers to these questions will determine the appropriate next steps for the foreign national’s residence status.
7. Checklist After an Investor Sells Their Shares
Before or shortly after a share sale, the company and foreign national should review:
Corporate
- Changes to the shareholder composition;
- Amendment deed;
- AHU records;
- The foreign national’s position as director/commissioner; and
- The status of the sponsoring company.
Immigration
- Type of ITAS/ITAP held;
- Validity period of the residence permit;
- Basis for the residence permit;
- Registered sponsor;
- Whether the investor requirements are still satisfied; and
- Whether a status conversion, sponsor change, or new residence permit is required.
Employment
- Whether the foreign national continues working after the share sale;
- Whether their position or role has changed;
- Whether they still qualify for the RPTKA exemption; and
- Whether RPTKA and other foreign worker requirements are required.
This review is important because a corporate transaction can directly affect the immigration and employment status of the foreign national concerned.
How TAMA Global Mobility Can Assist
TAMA Global Mobility supports companies and foreign investors in reviewing the mobility and immigration implications arising from changes in shareholding, corporate structure, and employment arrangements.
Our support includes:
- Investor KITAS/KITAP Status Review, reviewing the existing immigration status and its connection with the investor’s shareholding, position, and sponsoring company;
- Share Sale Immigration Assessment, assessing the practical immigration implications of a proposed full or partial sale of shares;
- Corporate Change Coordination, coordinating immigration-related documentation and processes following changes in shareholding, directorship, or the sponsoring company;
- Status Transition Support, assisting with the administrative coordination of an appropriate immigration status transition where investor status is no longer applicable;
- Employment & Immigration Alignment, coordinating the relevant immigration and employment processes where the foreign investor intends to remain and work in Indonesia after selling their shares;
- Sponsor & Documentation Review, reviewing relevant sponsor information and corporate documents to identify potential inconsistencies between the company’s current corporate structure and the foreign national’s immigration status; and
- Ongoing Mobility Support, providing practical support to companies and foreign investors throughout corporate transactions that may affect their immigration and mobility arrangements.
Through a practical and coordinated approach, TAMA Global Mobility helps companies and foreign investors identify and manage immigration considerations before changes in shareholding or corporate structure create complications for the foreign national’s status in Indonesia.
For foreign investors holding KITAS or KITAP, the key consideration is not simply whether shares can be sold, but whether the investor’s immigration and employment arrangements remain aligned with their position after the transaction.
Disclaimer: Here
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TAMA Global Mobility
WhatsApp: +62 821-1015-402
Email: info@tamaglobalmobility.com
For additional insights on Indonesian immigration compliance and global mobility matters, explore our related publications:
Who Is Responsible for the Immigration Status of a Foreign Worker After Termination of Employment?
Can Foreign Investors Manage Day to Day Business Operations?
