In a bid to boost its economy and attract foreign investment, the Indonesian government has introduced a new type of visa called the “Golden Visa.” This visa is designed to incentivize foreign nationals, both individuals and corporations, to invest in the country. Offering extended residency periods of five to ten years, the Golden Visa program aims to bolster Indonesia’s economic growth and prosperity. In this article, we will explore the key aspects and provisions of the Golden Visa program.
Golden Visa for Foreign Investors
The Golden Visa program is specifically tailored for foreign investors willing to make significant financial commitments to Indonesia. Whether you are an individual investor or representing a corporate entity, this program welcomes you with open arms. The primary objective is to encourage foreign capital flow into the country, ultimately contributing to Indonesia’s economic development.
Residency Duration: 5-10 Years
One of the standout features of the Golden Visa program is the extended duration of residency it offers, ranging from five to ten years. The length of your stay in Indonesia under this visa depends on the magnitude of your investment. The greater the investment, the longer your residency period. This tiered approach is designed to attract high-value investors who can have a substantial positive impact on the nation’s economy.
Residency for 5 Years
Foreign investors eligible for a five-year residency include:
- Individual investors planning to establish a company in Indonesia with an investment of $2.5 million USD (approximately Rp 38 billion).
- Corporate investors forming a company in Indonesia and investing $25 million USD (approximately Rp 380 billion).
- The benefits of the Golden Visa program extend to corporate board members and directors.
- Individual investors who do not intend to establish a company in Indonesia but are willing to invest $350,000 USD (approximately Rp 5.3 billion). This investment can take various forms, such as government bonds, publicly traded company shares, or savings/deposits.
Residency for 10 Years
Foreign investors eligible for a ten-year residency include:
- Individual investors planning to establish a company in Indonesia with an investment of $5 million USD (approximately Rp 76 billion).
- Corporate investors forming a company in Indonesia and investing $50 million USD (approximately Rp 760 billion).
- The Golden Visa program extends to corporate board members and directors.
- Individual investors who do not intend to establish a company in Indonesia but are willing to invest $700,000 USD (approximately Rp 10.6 billion). This investment can take various forms, such as government bonds, publicly traded company shares, or savings/deposits.
The Golden Visa program is the result of a directive from President Joko Widodo (Jokowi) during Silmy Karim’s tenure as the Director General of Immigration. The policy formulation process spanned six months and involved multiple government ministries. It culminated in the issuance of regulations by the government, the Ministry of Law and Human Rights (Permenkumham), and the Ministry of Finance (PMK) to facilitate the implementation of the Golden Visa program.
Following Global Trends
Indonesia is not the first country to implement a Golden Visa program. Many developed nations, including the United States, Canada, the United Arab Emirates, Ireland, Germany, New Zealand, Italy, and Spain, have already introduced similar initiatives. Silmy Karim asserts that these programs have yielded positive outcomes for their respective countries, fostering innovation and attracting foreign investors.
Exclusive Benefits for Golden Visa Holders
Golden Visa holders enjoy several exclusive benefits, including extended residency and streamlined entry and exit procedures for Indonesia. Moreover, Golden Visa holders are exempt from the requirement to obtain a Limited Stay Permit (ITAS) from the Immigration Office upon arrival in Indonesia, offering them a more efficient immigration process.
What is foreign direct investment in Indonesia?
Foreign Direct Investment (FDI) in Indonesia refers to the investment made by foreign individuals, corporations, or entities in various sectors of Indonesia’s economy. FDI plays a crucial role in the country’s economic development and growth. It involves the acquisition of a significant ownership stake in an Indonesian company, the establishment of new businesses or subsidiaries, or the participation in joint ventures with local Indonesian partners.
Key aspects of foreign direct investment in Indonesia include:
- Investment Sectors: Indonesia welcomes foreign investment in a wide range of sectors, including manufacturing, services, agriculture, natural resources, infrastructure, and technology. However, certain restrictions or limitations may apply to specific sectors, and these can change over time in response to government policies.
- Investment Promotion: To attract foreign investment, Indonesia has established the Indonesia Investment Coordinating Board (Badan Koordinasi Penanaman Modal or BKPM). The BKPM serves as the primary government agency responsible for promoting and facilitating foreign investments in the country.
- Ownership Requirements: The extent of foreign ownership in Indonesian companies varies depending on the sector. In some sectors, foreign investors can have full ownership, while in others, they may need to partner with local entities to meet ownership requirements.
- Regulations and Approvals: Foreign investors are required to comply with Indonesian laws and regulations regarding foreign investment. This includes obtaining relevant permits and approvals from government authorities.
- Tax Incentives: Indonesia offers certain tax incentives to attract FDI, such as tax holidays and tax allowances for specific industries and regions. These incentives are aimed at encouraging investments in priority areas.
- Investment Climate: The investment climate in Indonesia has improved in recent years due to government efforts to streamline regulations, reduce bureaucratic barriers, and enhance infrastructure and transportation networks. However, challenges such as corruption and regulatory complexity still exist.
- Sectoral Focus: Indonesia has targeted specific sectors for FDI promotion, including manufacturing, tourism, infrastructure development, and renewable energy. These sectors are seen as critical to the country’s economic development and sustainability.
- Regional Variations: Indonesia is a vast archipelago with regional variations in terms of economic development and investment opportunities. Certain regions and provinces may have their own investment incentives and regulations.
Foreign direct investment in Indonesia contributes to job creation, technology transfer, knowledge sharing, and economic growth. It is an essential driver of the country’s efforts to industrialize and modernize its economy. However, foreign investors should carefully research and understand the regulatory environment and sector-specific requirements before making investment decisions in Indonesia. Consulting with local legal and business experts is advisable to navigate the complexities of the Indonesian investment landscape.
Indonesia’s Golden Visa program represents a significant step towards attracting foreign investment and stimulating economic growth. By offering extended residency periods to high-value investors, the country aims to position itself as an attractive destination for international capital. As this program unfolds, Indonesia anticipates reaping the benefits of increased foreign investment, job creation, and economic development.