Jakarta, IO – On Thursday (25/7), President Joko “Jokowi” Widodo launched the long-awaited “Golden Visa” scheme in Indonesia. At the event, the President emphasized the importance of this policy as one of the strategies to supercharge Indonesia’s global competitiveness, as it is anticipated to attract substantial foreign investment and spur the growth of “quality tourism”.
President Jokowi also highlighted Indonesia’s great tourism potential, thanks to its abundant natural and cultural wealth. With the Golden Visa, the Government hopes to attract high-quality investors and tourists who can contribute positively to the national economy. This initiative also marks a step forward in the Government’s efforts to strengthen Indonesia’s position as one of the world’s preeminent investment and tourism destinations.
What is “Golden Visa”?
Golden Visa refers to a long-term residency permit granted to foreign nationals who bring significant investments or other benefits/contributions for the country, such as Indonesia’s men’s national soccer team head coach Shin Tae-yong, the first foreign national to be granted the Golden Visa. This program is custom-designed to attract wealthy investors, entrepreneurs, high-income individuals or exceptionally talented migrants by offering them various benefits, including eligibility to apply for citizenship after staying for a certain number of years. It allows its holders to live, work, or study without the hassle of having to extend their residence permits every few months.
Article 184 of Law and Human Rights Ministerial Regulation (Permenkumham) 22/2023 provides that a Golden Visa consists of a temporary stay visa, temporary residency permit, permanent residency permit, and re-entry permit which are granted for a certain period of time. In addition, Article 185(1) stipulates that the above-mentioned permits are granted for the purposes of investment, repatriation, and purchase of a second home for five or 10 years.
Who is it for?
Foreign individual investors seeking to establish a company in Indonesia are required to place Rp38 billion and Rp76 billion to gain a 5-year and 10-year residency permit respectively. Meanwhile, for corporations, the amounts are Rp380 billion and Rp760 billion for the same respective durations.
As for individuals not looking to set up a company, they must bring in Rp5.3 billion and Rp10.6 billion to gain a 5-year and 10-year permit respectively. The funds can be used to buy Indonesian government bonds (SBN), public company stocks, or to open deposits.
In essence, the Golden Visa is a privilege given to foreign citizens in the form of a longer residency permit or even citizenship in return for bringing significant amount of capital into Indonesia. According to Permenkumham 11/2024 which amended Permenkumham 22/2023, the Golden Visa can be granted for the following purposes:
(1) Investment
Foreign individual investors who intend to establish a company or simply invest in financial instruments in Indonesia. Foreign nationals who sit on boards of commissioners or directors in the branch or subsidiary of a company based outside of Indonesia. Foreign representatives of a parent company based overseas who conduct business trips or are assigned to the Indonesian branches or subsidiaries.
(2) Family reunion
Foreigner nationals who join their husband or wife who hold a temporary or permanent residence permit. Unmarried children under the age of 18 who join their father and/or mother who hold a temporary or permanent residence permit. Foreigners who join their child who holds a temporary or permanent residence permit.
(3) Repatriation
Former Indonesian citizens who intend to live without sponsors or guarantors. Second-generation descendants of former Indonesian citizens who do not have guarantors.
(4) Second home
Foreigners with special expertise. Notable figures with global reputation. Senior citizens aged 55 and above.
Magnet for investments
The Golden Visa program is designed to attract foreign direct investment (FDI). By offering residency or citizenship, Indonesia can attract wealthy investors who are ready to invest in various sectors, including real estate, infrastructure, and other industries. These investments can bring an influx of fresh funds into the economy, fostering development, creating jobs and speeding up productivity growth.
Golden Visa is a strategic policy that has proven effective in various countries in attracting foreign investment by offering various exclusive benefits to potential investors, including:
1. Longer-term residency permit
Golden Visa allows a long-term residence permit for investors and their families, giving them certainty and stability for investing capital in the country. With a longer residence permit, they do not need to worry about the often-complicated and time-consuming visa renewal or extension process.
2. Ease of doing business
Golden Visa is usually accompanied by ease of doing business measures. Investors get easier access to starting and running a business, including in terms of licensing, opening a bank account, and property ownership. This streamlined process is especially attractive to investors wishing to start their business operations immediately
3. Tax incentives
Many countries offer tax incentives as part of the Golden Visa scheme. These can be in the form of tax reductions or exemptions for a certain period, which is certainly very attractive to investors who hope to obtain maximum benefits from their investment. Other incentives can include property tax, income tax, or capital gains tax.
4. Investment diversification
Golden Visa allows investors to diversify their investment portfolios. By owning assets in other countries, investors can spread the risks associated with investing in just one country. This provides additional security, especially during periods of economic uncertainty.
5. Security and stability
Countries that offer the Golden Visa tend to be known for good security and political stability. This provides peace of mind for investors, so they do not have to worry about any political or economic instability that could negatively affect their investment.
6. Access to global markets
A Golden Visa also provides wider access to the global market. Holders of residency and business permits in a strategic country can access regional and international markets with more ease. This will open up new business opportunities and a wider trade network.
7. Lifestyle and quality of life
Many investors are interested in Golden Visa because they want to enjoy a better lifestyle and quality of life. Countries that offer the Golden Visa usually have an attractive quality of life, with good healthcare facilities, education and infrastructure, on top of being alluring tourist destinations, thus providing added value for investors and their families.
8. Legal Certainty
Countries that offer Golden Visa usually have a clear and transparent legal system. This legal certainty provides assurance to investors that their rights will be protected and that they can run their businesses worry-free, as long as they comply with applicable regulations.
Golden Visa is an effective instrument to lure foreign investments, because it offers a variety of attractive benefits to investors. By adopting this policy, Indonesia is expected to receive more foreign investments that can help drive economic growth and forward national development. In addition, Golden Visa encourages economic diversification by courting investors from various backgrounds and industries. This can reduce a country’s dependence on a particular economic sector and increase overall economic resilience.
Boosting quality tourism
Besides investment, Golden Visa is also expected to boost quality tourism, as it attracts tourists with high purchasing power – those who tend to spend more and stay longer during their visits, whether for accommodation, food, shopping, or other tourist activities. Golden Visa holders often serve as the unofficial tourism “ambassadors” as they share their positive experiences through social media, blogs and personal networks, which helps to promote the destinations to other potential visitors. Positive reviews from these quality tourists go a long way towards attracting more visitors. They also have more time to explore other not-as-popular destinations, raising their international profile. This will ultimately increase overall tourism revenue, as well as create more jobs.
Such individuals are also more likely to invest in world-class tourist facilities such as luxury hotels, resorts, restaurants, theme parks, etc. These investments will help improve the quality and capacity of tourism and travel-related services, which in turn will attract more tourists and enhance the overall tourism experience.
The coming of quality tourists and investors will also lead to a push to improve the standards of tourism services and facilities. Local businesses will strive to meet the high expectations of Golden Visa holders, which in turn will improve the overall quality of service in the tourism sector. These investors are also more likely to be interested in developing sustainable tourism projects. They tend to invest in environmentally-friendly initiatives and support the preservation of local culture. This will help to create a more authentic and sustainable tourism experience, supporting the Government’s plan to shift away from mass tourism.
Golden Visa will also open windows of opportunities for international collaboration in tourism development. Foreign investors bring knowledge, technology, and best practices which can be applied to improve the local tourism industry. This collaboration will help to enhance the quality of services and global competitiveness of Indonesia’s tourist destinations. The tourism market will become more diversified. Instead of over-reliance on mass tourism, Indonesia can attract new segments of tourists with specific interests, such as “Medical Tourism”, “Educational Tourism” or “Ecotourism”. This will eventually create a more resilient tourism industry.
Countries granting Golden Visa
In fact, the Golden Visa concept is nothing new. Several countries have successfully implemented this type of special privilege visa to attract investment and boost tourism. These include:
1. Portugal
Portugal’s Golden Visa program is one of the best-known and most successful. It allows foreign investors to acquire a residency permit with a minimal investment in real estate or by setting up businesses. It has attracted thousands of investors, especially those from China, Brazil and South Africa.
2. Spain
Spain offers Golden Visa through property investment, entrepreneurial ventures that create jobs or purchase of government bonds. This program has attracted many wealthy investors interested in living in a country with a mild climate and rich culture.
3. Greece
Greece also offers residency permits through investment in real estate. This program has attracted great deal of interest from Russian, Chinese and Turkish investors who wish to gain access to markets in the wealthy Schengen Zone.
4. United Arab Emirates (UAE)
The UAE offers Golden Visa to investors who make significant investments in real estate property or business ventures. This program is designed to attract wealthy investors from around the world who are interested in settling in vibrant global cities of Dubai or Abu Dhabi.
Prabowo-Gibran’s vision for tourism industry
The Golden Visa policy holds great potential to attract investments and boost quality tourism. By attracting wealthy investors and high-income tourists, this program can contribute significantly to the economy. Countries that have successfully implemented the Golden Visa program can serve as role models.
According to Prabowo-Gibran’s Asta Cita (“Eight Aspirations”) manifesto, one way to increase economic income is to focus on improving the quality of tourism programs, economic diversification and Indonesia’s global competitiveness. The Golden Visa policy directly correlates with this vision in the following manner:
1. Improving the quality of tourist services
A Prabowo administration will seek to improve the quality and attractiveness of Indonesia’s tourist destinations. Golden Visa supports this vision by attracting high-quality tourists who tend to spend more money and seek premium leisure experiences. This will push for the betterment of service standards and infrastructure, thereby improving the quality of Indonesia’s tourism industry in general.
2. Economic diversification
One of Prabowo-Gibran’s missions is economic diversification to reduce high economic dependency on natural resources. The Golden Visa is expected to attract foreign investments to various sectors, including tourism, technology, and infrastructure, thereby diversifying Indonesia’s economy and creating new business opportunities.
3. Boosting foreign investment
Prabowo-Gibran are committed to increasing foreign investment as one of the pillars of economic growth. The Golden Visa offers incentives for foreign investors to invest in Indonesia. This will not only increase the capacity and quality of tourism infrastructure but will also expand the economic base, by creating jobs and spurring the growth of related industries.
4. Sustainable tourism development
Prabowo-Gibran’s tourism program includes the development of responsible and sustainable tourism, in a manner that respects the environment and local culture. The Golden Visa policy can attract investors who are interested in sustainable tourism projects that support environmental conservation and local community development.
5. Increasing global competitiveness
Prabowo-Gibran seek to elevate Indonesia’s global competitiveness. The Golden Visa can support this effort by attracting international tourists and investors, increasing Indonesia’s visibility and reputation as a leading investment and tourism destination. Investors who bring best practices and technology can also help raise the standards of the local tourism industry.
6. Collaboration and innovation
The Golden Visa scheme will open windows of opportunity for international collaboration and innovation in the tourism industry. Prabowo-Gibran’s program to foster collaboration with international parties and adopt new innovations aligns with the benefits presented by the Golden Visa. This collaboration will help accelerate the transfer of knowledge and technology, increase efficiency and inject innovation into the sector, which is a crucial foreign exchange earner.
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In conclusion, the Golden Visa policy is in alignment with Prabowo-Gibran’s tourism development road map. By attracting quality tourists and investors, improving tourism infrastructure, diversifying the economy and fostering sustainable tourism development, the Golden Visa can play a significant role in realizing Prabowo-Gibran’s goal of enhancing Indonesia’s global competitiveness. The implementation of this policy is expected to provide a significant boost to the tourism sector and to the economy as a whole.
With the projected positive impact on the tourism industry, contribution to national GDP, and exalted investment target, the Golden Visa can become an effective instrument to drive economic growth and tourism development in Indonesia. As a country with great tourism potential, Indonesia can capitalize on this policy to attract more investors and tourists, as well as improve the quality of its tourism sector in the global market, in order to achieve a national economic growth target of 8 percent and Golden Indonesia Vision 2045.