Bali has become a top destination for digital nomads seeking residency outside their home country, especially with the introduction of the E33G Remote Worker Visa. This visa allows digital nomads to work legally from Bali, receive income in an Indonesian bank account, and even enjoy certain tax advantages.
Establishing Tax Residency in Bali
As a digital nomad in Indonesia, you may be classified as a tax resident if you:
- Stay in Indonesia for more than 183 days in a year
- Hold a KITAS or KITAP residency permit
- Intend to live in Indonesia or have significant economic ties to the country
The E33G Remote Worker Visa
With competition among countries to attract digital nomads, Bali’s E33G Remote Worker Visa offers one of the most appealing options. This visa provides a limited stay permit (KITAS) for up to one year, enabling digital nomads to optimize their income taxation while legally living and working remotely from Bali. Additionally, the visa allows multiple entries, adding flexibility for those needing to travel frequently.
Forming a PT PMA (Limited Liability Company) for Business Tax Residency
For digital nomads seeking longer-term residency and tax benefits, establishing a PT PMA (foreign-owned LLC) in Indonesia can be advantageous. Setting up a PT PMA allows digital nomads to apply for an investor KITAS or a working KITAS, which grants residency for up to two years. This setup offers additional tax benefits, including lower corporate income taxes and exemptions on reinvested dividends.
Understanding Indonesia’s Worldwide Income Taxation for Digital Nomads
Indonesia applies a worldwide income tax principle, meaning residents must declare their global income. However, certain digital nomads may qualify for a tax exemption on foreign-sourced income if they meet specific expertise requirements (per PMK No. 18/PMK.03/2021) and have been in Indonesia for less than four years. This exemption allows digital nomads to avoid paying taxes on income earned abroad, provided they aren’t already taxed in another country.
Obligations for Digital Nomads in Bali
Even with a tax exemption, digital nomads holding a KITAS must meet certain obligations:
- Obtain an NPWP (Indonesian tax ID number)
- File an annual personal income tax report between January and March
- Declare residency status by applying for an SKTT
- Report assets and liabilities in Indonesia, regardless of whether they are taxed
Adhering to these responsibilities helps avoid complications when renewing your KITAS or facing potential tax penalties.
By following these guidelines, digital nomads in Bali can enjoy a smoother financial experience while taking full advantage of the lifestyle opportunities that Bali offers.