Indonesia has introduced a 10‑year “second‑home” visa aimed at attracting wealthy expatriates who are willing to place a substantial amount of capital in the country. The program mirrors Malaysia’s recent golden‑visa scheme and is expected to be operational after Christmas 2023.
Core requirements
- Financial deposit: US $130,000 must be held in a bank account. The legislation does not yet specify whether the account must be with an Indonesian bank or if foreign accounts are acceptable.
- Police clearance: Applicants are required to submit a recent police‑certificate.
- Application timing: The visa will be issued for ten years once the regulations are finalized later in 2023.
Intended outcomes
- Attract high‑net‑worth residents: The government hopes the visa will bring investors who will purchase villas, land, and start businesses such as restaurants, cafés, and other tourism‑related ventures.
- Upgrade the expatriate ecosystem: Current observations in Bali show many foreign residents living in shared or low‑budget accommodations, which the program seeks to replace with higher‑spending occupants.
Practical considerations
- Residency vs. citizenship: The visa does not confer permanent residency or citizenship. Indonesia’s citizenship process remains stringent; even long‑term residents often must leave and re‑enter on tourist visas.
- Tax obligations:
- Personal income tax rates can reach 30‑35 %.
- Companies operating in Indonesia are also subject to corporate and sales taxes.
- Proper accounting and bookkeeping are essential; expats should engage qualified local accountants to avoid penalties.
- Geographic preferences:
- North Bali (Ubud, forested areas) is generally regarded as more appealing for long‑term stays, offering higher‑quality accommodations and a quieter environment.
- South Bali (Canggu, Seminyak) is described as crowded, heavily polluted, and with lower‑quality construction.
Risks and caveats
- Unclear banking rules: Until regulations are finalized, it is uncertain which banks (including online or neo‑banks) satisfy the deposit requirement.
- No pathway to citizenship: Holding the 10‑year visa does not improve prospects for permanent residency or naturalisation.
- High tax burden: Expats must plan for substantial tax liabilities on personal income and business activities, unlike tax‑free jurisdictions such as Dubai.
Decision criteria for prospective applicants
- Capital availability: Ability to lock US $130,000 in an acceptable account for the visa duration.
- Tax planning: Willingness to engage professional tax services to manage Indonesia’s high personal and corporate tax rates.
- Investment intent: Desire to invest in real estate, land, or local businesses rather than merely using Indonesia as a low‑cost living base.
- Lifestyle preference: Preference for quieter, forested regions of Bali over the more tourist‑dense southern coast.
Overall, Indonesia’s 10‑year second‑home visa offers a structured route for affluent individuals to reside long‑term, provided they meet the financial deposit, documentation, and tax compliance requirements. The program is designed to channel foreign wealth into the country’s real‑estate and tourism sectors, but it does not simplify the path to permanent residency or citizenship and comes with a comparatively high tax regime.
