Indonesia introduces 5 years Digital Nomad Visa Programme to allow Digital Nomads and Remote Workers to work from Bali instead of Work from home.
As the World is approaching a truly digital era with metaverse and web 3.0, countries are updating their policies in many sectors. We heard that Dubai also introduced the same kind of visa programme and Estonia has already begun the e-citizen programme as well. Not just those countries, but also many other futuristic nations are on a policy change.
Indonesia’s tourism minister Sandiaga Uno told Bloomberg on Monday (June 06) that the country is developing a new “digital nomad” visa to attract higher-spending visitors on regular basis. This news will be a thriving invitation to Worldwide Digital Nomads.
“In the past, the ‘three S’s’ were sun, sea, and sand. We’re moving it to serenity, spirituality, and sustainability,” Uno said. Indonesia’s “digital nomad” visa would be effective for five years, and Indonesia wouldn’t tax income received from overseas. Uno also promised speedier visa approvals and a greater frequency of flights in the interim.
Bali is already a popular—and at times controversial—a destination for digital nomads, thanks to its tropical climate and low cost of living. But Bali-based digital nomads operate in a legal grey area at best.
Currently, visitors can either get a tourist visa for a maximum of 60 days or jump through numerous legal hoops for a six-month temporary work permit. But anyone staying in Indonesia for longer than 183 days of a full year automatically becomes a local tax resident—which means subjecting overseas income to Indonesia’s tax rates.
According to Fortune Magazine, Indonesia’s top tax bracket is a 35% tax rate for income above about $350,000. While that’s a lower tax rate than countries like the U.S. (which has a 35% tax bracket between $215,950 and $539,900) and the U.K. (which charges a 45% rate for income after a $187,000 threshold), it’s still more than other potential digital nomad hubs. Dubai, which offers its own one-year renewable “digital nomad” visa, does not charge income tax at all, whatever the visa type.
An Indonesian “digital nomad” visa would regularize what remote workers in Bali are already attempting in some unorthodox way. No more hassle to renew visas every few months, and removing the risk of quick deportation for breaking the rules. Also coming with a gift bundle of tax exemption for income from overseas would lower the tax burden on Indonesia-based remote workers, lowering the risk of double taxation.
Indonesia’s digital nomad visa would also be the longest that kind of visa on the Planet. Currently, we can see other 33 countries including Germany, Mexico, Barbados, Dubai and Estonia which offer similar. 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 programmes exempt visa holders from local income tax.
Indonesia is looking forward to kickstarting its tourism industry during its post-pandemic economy recovery programme.
Indonesia’s tourist numbers jumped by 500% in April to hit 111,000, a record since the pandemic—but still much lower than the average 1.3 million visitors it got each month in 2019.
Sources: Fortune Magazine, Bloomberg and other International Agencies.
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