Indonesia — Bali

Indonesia operates a territorial tax system for non-residents: income sourced from outside Indonesia is not subject to Indonesian Personal Income Tax (PPh Orang Pribadi), provided the taxpayer does not create a Permanent Establishment (Bentuk Usaha Tetap, BUT) in Indonesia. The critical determination is whether the nomad is classified as a resident taxpayer (more than 183 days in Indonesia within any 12-month period) or a non-resident taxpayer. Second Home Visa holders who spend more than 183 days in Indonesia within a tax year technically become Indonesian resident taxpayers and are in principle subject to worldwide income taxation.

The operative tax optimisation loophole is that the Indonesian Tax Authority (Direktorat Jenderal Pajak, DJP) currently lacks the administrative infrastructure to systematically assess worldwide income of foreign tax residents who have no Indonesian income source. In practice, nomads on the Second Home Visa who earn exclusively from foreign clients, maintain no Indonesian business registration, and have no Indonesian-source income have experienced zero enforcement of worldwide tax obligations. However, this is a de facto rather than de jure exemption — the legal risk of assessment exists, and nomads should obtain a written opinion from an Indonesian tax advisor (konsultan pajak berizin) before assuming safety.

The safest structuring approach is to register an Indonesian PMA (foreign-owned company) or PT (local company) with an Indonesian registered partner, invoice all work through the Indonesian entity at a modest local rate, and retain the balance of income in a foreign account — leveraging the transfer pricing flexibility between the Indonesian entity and the foreign principal. This requires a Notaris (public notary) and an investment board (BKPM) registration but provides clear legal standing.

Indonesia's Second Home Visa (E33G), introduced under Government Regulation 48/2021, provides a 5-year multi-entry stay permit and does not in itself constitute a residency pathway toward permanent settlement. The Second Home Visa is explicitly categorised as a temporary stay permit (ITAS), not a permanent stay permit (ITAP). To obtain a Permanent Stay Permit (KITAP), an applicant must hold an ITAS for a minimum of 5 continuous years under a qualifying category — the Second Home Visa pathway toward KITAP has not yet been formally codified under the 2022–2026 implementing regulations, creating legal uncertainty.

For nomads primarily based in Bali who wish to establish long-term presence, the pragmatic approach is to obtain the Second Home Visa for a 5-year base, then explore KITAP conversion through a licensed immigration consultant (PPAT/Konsultan Imigrasi). Indonesian citizenship (Warga Negara Indonesia, WNI) requires 5 consecutive years of KITAP plus Indonesian language proficiency and is available only to holders of a valid KITAP — not ITAS holders. Indonesia permits dual citizenship only for natural-born Indonesians under strict conditions; naturalised foreigners must generally renounce prior citizenship.

For the majority of digital nomads, the Second Home Visa functions as a long-term base rather than a citizenship pathway. Indonesia's Special Economic Zones (Nusa Tenggara Barat, Bintan) are developing more streamlined long-term residency frameworks for foreign investors and tech workers, potentially creating new pathways by 2027.

Opening a personal Indonesian bank account requires the ITAS card (which is only issued after arrival and immigration office visit), a valid passport, NPWP tax number, and proof of address (RT/RW registration letter). BCA (Bank Central Asia) is the preferred bank for expatriates due to its extensive ATM network across Bali and Java and English-language mobile banking. BNI (Bank Negara Indonesia) offers an expatriate account package with lower minimum balance requirements. For the mandatory initial 60-day fund deposit required by the Second Home Visa, a BCA Deposito Berjangka (term deposit) is the most commonly used instrument. Wise and Revolut USD/EUR cards function reliably at Bali ATMs for day-to-day spending prior to local account establishment.

Indonesia does not mandate health insurance as a formal visa issuance prerequisite for the Second Home Visa, but maintaining comprehensive coverage is essential given the limited availability of Western-standard medical facilities outside of Bali's Kuta/Seminyak corridor and Jakarta. International SOS (ISOS) evacuations from Bali to Singapore (Raffles Hospital or Mount Elizabeth) for serious conditions cost USD 8,000–20,000 without insurance. Recommended coverage: minimum USD 250,000 medical cover including emergency evacuation to Singapore or Australia. IMG Global Nomad, SafetyWing Remote Health (Worldwide coverage tier), and Cigna Global are the three most frequently used by Bali-based nomads. Note that BPJS Kesehatan (Indonesia's national health insurance) is available for ITAS holders and costs approximately IDR 150,000–300,000/month (USD 10–20) — it provides access to government Puskesmas and Rumah Sakit Umum (public hospitals) and is useful as a secondary policy for routine local care.