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The government officially launched the Golden Visa at the end of July 2024. According to President Joko Widodo, the visa launch for super travelers aims to attract foreign investment from individuals and corporations. Furthermore, the president revealed that Indonesia is an up-and-coming country as an investment destination because Indonesia has abundant natural resources, good economic growth, political stability, and demographic bonuses (Berita Satu, 2024).
The Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Panjaitan, even said that the government would only give Golden Visas to good-quality travelers. The government will assess the contribution of good-quality travelers who receive Golden Visas to Indonesia by considering national security factors (Detik Finance, 2024). Then, what exactly is a Golden Visa? We will discuss the Golden Visa and its taxation aspects in this article.
Referring to the website of the Directorate General of Immigration, the legal basis for granting a Golden Visa is Regulation of the Minister of Law and Human Rights (Permenkumham) Number 22 of 2023 concerning Visas and Stay Permits and Regulation of the Minister of Finance (PMK) Number 82 of 2023 concerning Types and Rates on Non-Tax State Revenues (PNBP) Urgent Needs for Golden Visa Services that apply to the Ministry of Law and Human Rights.
Based on these provisions, among others, it is stipulated that foreign individual investors who will establish a business in Indonesia can obtain a residence permit for five years if they invest USD 2,500,000 (around USD 38 billion). In addition, foreigners can get a residence permit in Indonesia for ten years if they invest USD 5,000,000 (around IDR 76 billion).
Corporate investors who wish to establish a company in Indonesia can obtain a five-year residence permit for their directors and commissioners if they commit to investing a minimum of USD 25,000,000 or IDR 380 billion. For a ten-year authorization, the required investment value is USD 50,000,000, or IDR 760 billion (Sampit Immigration Office, 2024).
However, different provisions apply to individual foreign investors who do not intend to establish a company in Indonesia. For professionals who plan to apply for a five-year Golden Visa, the applicant requires place funds worth USD 350,000, or around IDR 5.3 billion, in the form of Indonesian government bonds, shares of public companies, or savings and deposit placements. Meanwhile, if the professional plans to apply for a visa for 10 (ten) years, the funds that must be placed in the derivative are USD 700,000, or around IDR 10.6 billion (Sampit Immigration Office, 2024).
The Director General of Immigration, Silmy Karim, said that until the end of July 2024, the value of incoming investment from the Golden Visa was worth 2 trillion rupiah (Yogyakarta Immigration Office, 2024), a quite amount to attract investment in Indonesia. However, to maximize the Golden Visa, the government can merge it with tax policy. Moreover, the government has issued Minister of Finance Regulation No. 28 of 2024 on tax and customs facilities in the Nusantara capital city.
Through this regulation, the government regulates nine tax facilities provided by the government in the Capital City of the Archipelago. Among them are:
- reduction of corporate income tax for domestic corporate taxpayers;
- Income tax reduction on financial sector activities in the Financial Center;
- reduction of corporate income tax on the establishment and/or relocation of head office and/or regional office;
- reduction of gross income for the organization of work practice, apprenticeship, and/or learning activities in the context of fostering and developing certain competency-based human resources;
- deduction of gross income for certain research and development activities;
- deduction of gross income for donations and/or construction costs of public facilities, social facilities, and/or other facilities that are non-profit in nature;
- Income Tax Article 21 is borne by the government and is final;
- 0% (zero percent) final income tax on income from certain business gross turnover in micro, small, and medium enterprises; and
- income tax reduction on the transfer of rights to land and/or buildings.
Specifically related to the Corporate Income Tax reduction facility, the provision, among others, stipulates that corporate taxpayers who invest at least IDR 10 billion, invest in fields that have strategic value in accelerating the development of IKN or invest in infrastructure in partner regions can obtain a reduction in Corporate Income Tax of 100% of the amount of tax payable.
Areas that have strategic value and obtain income tax reduction facilities in Nusantara Capital City include investments in:
- power generation, including new and renewable energy;
- construction and operation of toll roads;
- construction and operation of seaports
- construction and operation of airports;
- construction and provision of clean water;
- construction and operation of health facilities;
- construction and operation of education units
- development and provision of telecommunications and informatics infrastructure;
- development and management of urban park forests;
- construction of housing, residential areas, and offices;
- construction and management of wastewater
- development and operation of industrial estates and research and innovation centers (industrial and science parks);
- construction and operation of public markets
- provision of public transportation; construction and operation of passenger or goods vehicle terminals; and
- construction and operation of stadiums and sports facilities.
Therefore, investment in strategic fields in Nusantara Capital City is the right choice for foreign investors, both individuals and corporations, who want to get a Golden Visa as well as tax facilities.
References
- Berita Satu. (2024, Juli 28). Pemerintah Resmi Luncurkan Golden Visa. Berita Satu. https://www.beritasatu.com/network/suarakalbar/240404/pemerintah-resmi-luncurkan-golden-visa
- Detik Finance. (2024, Juli 26). Luhut Kawal Perintah Jokowi Seleksi Ketat Penerima Golden Visa. Detik Finance. https://finance.detik.com/berita-ekonomi-bisnis/d-7459228/luhut-kawal-perintah-jokowi-seleksi-ketat-penerima-golden-visa
- Kantor Imigrasi Yogyakarta. (2024, Juli 27). GOLDEN VISA RESMI DILUNCURKAN, PRESIDEN RI: PRIVILESE EMAS BAGI WARGA DUNIA BERKUALITAS. Ditjen Imigrasi. https://jogja.imigrasi.go.id/golden-visa-resmi-diluncurkan-presiden-ri-privilese-emas-bagi-warga-dunia-berkualitas/
