Electronic tax

Explained: Indonesia’s new visa policy, which allows travelers to live tax-free

As Indonesia grapples with the economic impacts of Covid-19, the country has announced “digital nomad visas” for travelers to attract more foreign tourists.

While Bali is one of the most famous places in the country for its beaches and bars, Indonesia seeks to promote another element through these visas – the spiritual element.

So who are digital nomads? What are these visas? And what other countries offer such visas? We explain.

Who are digital nomads?

Digital nomads are people who work remotely while traveling to different places and spending their earned income in the country they are going to.

As the pandemic progressed, most workspaces moved online, while some offices began to open, most organizations declared remote working.

Now that the world is moving towards vaccination and international borders have opened up, people can continue to do their regular work remotely from anywhere in the world.

According to MBO Partners’ 2020 State of Independence in America Report, “Digital nomads are defined as people who choose to pursue a location-independent, technology-based lifestyle that allows them to travel and work remotely, anywhere in the world connected to the Internet.. Unlike regular remote workers, who tend to stay in one geographic area, digital nomads travel and explore while working.

The study also found that 10.9 million American workers described themselves as digital nomads in 2020, a 49% increase from 2019.

What is the “Digital Nomad Visa” offered by Indonesia?

The Digital Nomad Visa would allow remote workers to stay in Indonesia, including Bali, tax-free.

Announced by Indonesian Tourism Minister Sandiaga Uno to boost tourism in the country, the visa will be applicable for five years. This would make the Indonesia visa one of the longest digital nomad visas compared to other countries.

Through this visa, Indonesia aims to bring more than 3.6 million foreign travelers to the country over the next year to explore spiritual retreats as well as Indonesian ecotourism.

As Bloomberg reported, Uno said ecotourism, sporting events and the five-year visa are expected to attract millions of travelers and create over a million jobs for Indonesians as borders are now open. to foreign tourists.

“In the past, the three S’s were: sun, sea and sand. We move it towards serenity, spirituality and sustainability. This way we get better quality and a better impact on the local economy,” Uno told Bloomberg.

Under the visa, as long as remote workers earn income from businesses outside of Indonesia, they can live tax-free inside the country, including on islands like Bali.

In May this year, Indonesia scrapped most of its Covid-19 mandates for foreign travelers to attract more tourists.

With easy visa processing and frequent flights, Indonesia aims to attract employees from organizations like Airbnb, Twitter and others that have enabled remote working for all.

Uno also told Bloomberg that in a survey, 95% of digital nomads responded that Indonesia, specifically Bali, was the remote work destination they were most concerned about.

Also in 2021, Indonesia had thought of granting a special visa to remote workers or business people who travel for leisure, but with the increase in cases, the plans were cancelled.

“Now that the pandemic is managed and all ministries are involved and cooperating on the health side of the immigration office, we believe it is the right time to revive this idea,” Uno added.

What other countries provide nomad visas?

Italy released a new permit in March for non-EU nationals, or digital nomads, who can stay in the country for up to 90 days without a visa.

Antigua and Barbuda offers a two-year digital nomad visa where travelers will need to maintain their own health insurance.

Barbados offers a one-year remote work visa which can be extended further.

Other countries offering nomad visas are Croatia, Costa Rica, Georgia, Hungary, Iceland, Mauritius, Norway and Spain among many others.