Indonesia joins in with their digital nomad visa offering, and it’s one of the best ones yet if you like warm beaches and no taxes.
June 27, 2022
By: Bobby Casey, Managing Director GWP
While some companies have certainly returned to the office full time, others only returned a few days a week, and others still maintained a fully remote work arrangement.
Much like how e-commerce took a boost and only slightly regressed once brick and mortar stores reopened.
For better or for worse, business and people understand that after that lock-down stunt governments around the world pulled, they need to remain ready and stay “essential”.
Countries that once relied on short term tourism, are realizing they need to expand that a bit more.
Businesses and countries both demonstrated their previously restrictive models were not only frustrating to employees and visitors, but no longer served their self-interests.
More and more countries are introducing longer term visas for digital nomads and expats. The standard tourist visa usually lasts for 90 or so days. Some have gone as long as 180.
Europe, Central America, the Caribbean all have started opening up to longer term visas for digital nomads, and some are even throwing in some tax benefits to bring in more nomads and expats. Asia is also stepping into the ring.
That’s right: not only are they extending their visas, they are offering a tax-free stay for those who take them up on it.
It’s not that governments don’t understand the economics behind lower taxes, they just like the control that comes with an elaborate tax scheme. But in the case of these visas, they stand to make more off the commerce from these expats than from direct taxation of them.
Letting them keep their money to spend on travel, hospitality, amenities, and souvenirs does more for their recovering economies, and even their revenue, than just taking money from them. Go figure, right?
Countries that relied heavily on tourism, are trying to reboot and recover from the economic fallout of the pandemic era:
Indonesia, along with the rest of Southeast Asia, is trying to revive its tourism sector after years of travel restrictions crashed visitor numbers in tourist hotspots. Earlier this year, the Asian Development Bank estimated that 9 million people were unemployed as a result of the pandemic, in part due to job losses in hospitality and tourism.
A good number of tourists used to come in from China and Russia, but those two countries are either preoccupied in a war or figuring out whether or not to stay out of lock-down. Australians also feed into Indonesia, but not enough to make up the difference.
Indonesia is a very popular place for nomads and expats. Northern Europeans, Australians, and Americans alike flock there for it’s warm weather, beautiful beaches, delicious food, warm culture, and of course affordable living.
With more people working remotely from wealthier nations — nations that are suffering under skyrocketing inflation — the allure of an affordable island paradise isn’t a tough sell.
Tourist arrivals to the country hit 111,000 in April, 500 per cent of March’s tourism levels and the highest number of monthly visitors since before the pandemic.
According to Indonesia’s tourism minister, Sandiaga Uno:
[T]he five-year remote working visa would allow freelancers to live on islands such as Bali tax-free, providing their earnings come from companies outside of Indonesia.
The country is looking to re-brand itself as more than just a brief vacation spot. Rather it hopes to attract more affluent people from around the world:
The minister said the country hopes to see 3.6 million overseas travelers returning to the country next year. The digital nomad visa along with a greater emphasis on eco-tourism and spiritual retreats aims to bring higher spenders who stay longer.
What Indonesia is offering is aggressively superior to other countries. If your income source it from outside the country, you could stay in Indonesia for five years tax free! That is longer than any other country offering a digital nomad visa:
Indonesia’s digital nomad visa would also be longer than every other “digital nomad” visa currently available, in 33 countries including Germany, Mexico, Barbados, and Estonia. Data compiled by Harvard Business School professor Raj Choudhury finds that most “digital nomad” visas offer stays of one to two years, with the most generous offering a four-year stay. Most formal digital nomad visa programs exempt visa holders from local income tax.
There is nothing wrong with waiting out the massive inflation for a few years on the beaches of Bali. According to Numbeo:
Family of four estimated monthly costs are $1,534.82 (22,760,686.14Rp) without rent.
A single person estimated monthly costs are $438.97 (6,509,734.75Rp) without rent.
Cost of living in Indonesia is, on average, 53.33% lower than in United States.
Rent in Indonesia is, on average, 82.36% lower than in United States.
Like I said, it’s not a tough sell. Indonesia is an exciting destination that already has the attention of tourists and nomads. But five years, tax-free all but eliminates the excuses and procrastination.