The program, announced on Tuesday and to take effect by the end of the year, will allow foreigners to apply for a second home stay permit if they have an existing visa and provide proof of funds of either Rp 2 billion (US$128,559) in a personal Indonesian bank account or proof of ownership of a luxury property in the country.

The permit will allow them to stay in the country for either five or 10 years.

Forced switch

Government officials have said that the second home program is intended to boost the country’s tourism sector, which is struggling under the shadow of the pandemic.

The expat community in Indonesia, however, has reservations about the new program.

Indonesian Mixed Marriage Association (Perca) head Analia Trisna said the program could make life harder for older foreigners already in the country under the existing temporary stay permit (KITAS) or permanent stay permit (KITAP).

This, she explained, was because the second home program required existing elderly KITAS and KITAP holders to transition to a second home permit within three months and to provide proof of the Rp 2 billion in personal funds held in Indonesia. 

The proof of funds required for the KITAS, Analia said, was significantly lower at Rp 280 million ($18,000).

“For elderly foreigners who are living out their retirement in Bali, we don’t know how many of them have that Rp 2 billion, since they are already spending their retirement money,” she said on Wednesday.

Analia called on the government to carve out exceptions for existing KITAS and KITAP holders who may not have the requisite funds.

“For people looking to invest in the country, Rp 2 billion might be fine, but [not] for senior foreigners already in the country. It feels like an injustice for them to also be required to join the second home program, unless they are given exemptions,” she added.

‘Weak’ legal standing

International relations expert Teuku Rezasyah of Bandung’s Padjadjaran University questioned the decision to announce the second home program through an Immigration Directorate General circular as opposed to a ministerial regulation.

“[The second home policy] came in the form of a circular letter with a weak legal status. It should have come in the form of a ministerial decree because it would have been more powerful to regulate this kind of policy," he said.

Law and Human Rights Ministry acting director general for immigration Widodo Ekatjahjana said during the announcement of the program on Tuesday that it was intended to make Indonesia a more attractive destination for foreigners, in the hopes of spurring economic development.

He added that the program was primarily aimed at well-off elderly foreigners who were looking to retire in Bali or in other popular tourist destinations in the country, according to media reports.

While Widodo has said that foreigners on the second home permit will be allowed to invest in the country, it remains unclear in what capacity they will be allowed to earn money and how they will be taxed.

Tax Office spokesperson Neilmadrin Noor was not immediately available for comment, nor were representatives of the Law and Human Rights Ministry.

The government has been making efforts to revive the country’s pandemic-battered tourism sector, particularly on the holiday island of Bali.

State officials had previously sought to capitalize on the pandemic-induced “work from anywhere” trend by preparing a “digital nomad” visa, although the program has yet to be implemented amid stalled talks on how foreigners would be taxed under the arrangement.

The Bali tourism board expects foreign arrivals in Bali to reach pre-pandemic levels of 6 million a year by 2025, Reuters has reported.

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