In light of the recent COVID-19 outbreak, the Vietnamese government introduced Decree no. 152, under which local DOLISAs (The Department of Labor, Invalids, and Social Affairs) have heightened their scrutiny over applications for work permits.
The Decree states that foreigners must possess professional degrees that are relevant to their positions and work permit renewals issued before the effective date of Decree No. 152 would be suspended till further notice.
As a result, expats are facing issues regarding their work permit applications and renewals. This has led many foreigners to leave Vietnam and look for an alternative option.
In this situation, Bali presents itself as an alternative destination for expats who have to leave Vietnam but, would prefer to reside or work in South East Asia. Asides from a seamless Bali Visa requirements and application process as well as a shorter quarantine period, the main draw is its low cost of living and quality of recreational offerings. Moving from one country to another for work is often an herculean task, however, with sufficient research, the immigration and work permit process can be streamlined.
Bali Visa Requirements: Step by Step Guide For Expats
Step 1: Choose The Right Visa
Free tourist visas and Visa on Arrival (VoA) are currently suspended due to the ongoing Covid-19 pandemic. However, the Indonesian government has updated its travel regulations and advisory regarding Work Visas and Stay Permits in late March 2021.
Certain visas and limited stay permits have been reopened for offshore applicants. Foreigners can now apply for a Visit Visa if they are traveling to Indonesia for the following reasons:
- Emergency and urgent work
- Business meetings
- Skills tests
- Humanitarian reasons (e.g.: visiting/accompanying family members traveling for medical purposes)
Visit Visa, including Business Visa allows you to stay in Indonesia for up to 60 days. At the moment, only Single-entry business Visa is applicable, which must be renewed (up to 4 times) after the current one expires. Each extension will give you an extra 30 days of stay.
If you are planning to work for a locally established business in Bali, your employers will need to apply a Working KITAS for you – all Working KITAS will require a sponsor. It is important to note, established business in this context refers to a legal entity in Indonesia and are either known as a PT PMA, Local PT, or representative office.
- Plane ticket with departure date;
- Address of residence in Indonesia;
- Supporting documents from the local sponsor letter;
- Passport with a minimum validity of 18 months and 30 months for Working and Investor KITAS respectively;
- Bank Statements with a minimum of 10,000 USD for Visit Visas applicants (except those traveling for medical purposes) and 1,500 USD for KITAS applicants;
- Negative RT-PCR or Rapid Antigen test results are no longer required during the application process. However, test results are still required when entering the country.
Due to the Covid-19 situation, both Indonesians and foreigners planning to enter the country must undergo a 5-day quarantine period.
Bali Visa requirements and health protocols still remain prone to changes, and we recommend you consult with an expert before applying for an Indonesian Business Visa or KITAS. If you’ll like to find out more, Cekindo can provide you with a 1-to-1 guided consultation on these applications as well as a KITAS sponsorship service.
Step 2: Choose A Place to Stay
Expats will need a place to stay to start their life in Bali. One must be clear about their approach in order to find a place to stay in Bali, before hasting into a decision.
Rent A Property
Foreigners are permitted to rent a property in Bali if they have a KITAS. The lease period can last anywhere from one to three years, and the leasehold agreement can last up to 25 years.
Own A Land
Only Indonesian citizens with Hak Milik, also called Right to Ownership, are allowed to own land in Bali. Foreigners who want to buy real estate in Bali will need the help of an Indonesian local partner.
Buying Property with PT PMA
However, engaging an untrustworthy Indonesian partner on your own can be extremely dangerous. Hence, the incorporation of a 100% foreign-owned company, PT PMA, is a safer option to buy property in Bali. By doing so, you will be able to obtain the Right to Build, which can also act as collateral for a loan.
Note: However, the Indonesian government recently increased the minimum paid-up capital requirements from Rp. 2.5 billion to Rp. 10 billion, which many foreigners consider being too expensive just to buy a house. So unless you’re dealing with large-scale property transactions, we recommend using the KITAS or a representative office.
Step 3: Understanding Tax Obligation
Who Is Eligible To Pay Personal Income Tax
Personal Income Tax (PIT) must be paid by foreign workers who are designated as tax residents in Indonesia. The key criteria to determine tax residents are listed below:
- Living in the country for more than 183 days during a 12-month period in Indonesia.
- Intends to reside in the country for more than 183 days even if they have spent less than 183 days in the country.
- Individuals who work abroad for more than 183 days within a 12-month period, but are still earning any form of income in Indonesia, must pay PIT on the Indonesian income.
Individuals that work overseas for more than 183 days within a 12-month period and do not earn any income in Indonesia are not eligible to pay Indonesian PIT.
Who Is Exempted
Certain foreign expatriates are not considered Indonesian tax residents and are exempted from paying PIT because of their special legal status, like foreign diplomatic personnel, military personnel, etc. even if they stay for more than 183 days per year.
Scope of Taxable income
According to the Personal Income Tax Law, income is defined as an increase in economic capability. It can include earnings from a job and earnings from personal investments.
As per article 4 of chapter 3 of the Law, income includes:
- Employment income;
- Income from the exercise of an independent profession or business;
- Passive income (dividends, royalties, interest, insurance gains);
- Capital gains (from the sale or transfer of property); and
- Rents and other income from the use of property
Residents and non-residents are taxed differently when it comes to tax rates:
- Residents are subject to a withholding progressive tax (their net taxable income is taxed at graded rates, with current rates ranging from 5% to 30%, depending on an individual’s income);
- Non-residents are liable to a 20% flat withholding tax on gross income.
Step 4: Consider Cost of Living in Bali
A single person living in Bali should have a budget range of $720 to $2,600 a month, depending on how luxurious one wants to live. Families and couples who share rental costs would save significantly, making it possible to spend more money on a luxurious lifestyle. A single person making a living solo in Bali could lead a moderate yet comfortable lifestyle under $2,000.
Having gone through the detailed guide, it is quite evident that for expats leaving Vietnam due to stricter covid related prohibitions, Bali turns out to be an ideal choice. It is an exquisite destination to live in, as well as easy on your pockets.
How Can Cekindo Help You to Fulfill Bali Visa Requirements
Expats entering into Indonesia could be overwhelmed with Bali Visa requirements and application process as well as legal nuances involved. Cekindo assists foreigners who want to enter Indonesia and stay there legally by providing immigration consultancy. Our consultants will also guide you in setting up your land and property investment plans as per Indonesian regulations.
In order to ensure that you stay on top of legal compliances, Cekindo provides comprehensive tax and accounting services. We also aid expats in opening a bank account and apply for their driving license.
To know more about how Cekindo’s solutions can help you move to Bali, please fill out the form below or talk to an expert on our chatbot.