back to article Tropical island paradise ponders tax-free 'Digital Nomad Visa'

The government of Indonesia has once again raised the idea of creating a "digital nomad visa" that would allow foreign workers to live and work in the tropical paradise of Bali, tax free, for five years. The idea was raised before the COVID-19 pandemic, but understandably shelved as borders closed and the prospect of any …

  1. ShadowSystems Silver badge

    I'd love to!

    All I need is a passport, plane tickets (1st class natch!), and a fekton of cash to spend getting used to the area so I can then spend said funds doing touristy things. Restaurants, looking for a decent/cheap place to stay, determining what form of daily transportation I'll require for my needs, etc.

    "But it's entirely digital, you don't need to actualy LIVE here!" Yes I do. I require (cough) much tropical sun, sandy beaches, salt water soakings, & fruity drinks delivered by nummy local nymphs as I "recouperate" on the beach, laptop on a stand beside me beneath a beach umbrella (do I have to, y'know, turn it ON?), and a good book to help me take long, recouperative naps in a climate more condusive to my mental health. =-D

    Seriously, I'd love to move there. The weather is a dream, the cost of living reasonable, & except for the odd natural disaster, I could envision myself having a rather nice retirement there. Too bad I'm poor & couldn't afford to *swim* there much less fly there. *Comical pout*

    A houseboat, a sheltered cove, & a hammock sounds like heaven...

    1. sreynolds Silver badge

      Re: I'd love to!

      Then you'd be wondering why you are subsidising those brexiting freeloaders.

  2. Ol'Peculier
    Pint

    Ah, Bali. Basically Magaluf for Ozzies...

    1. Gordon 10 Silver badge

      I was gonna say Tenerife but the point stands.

  3. Warm Braw Silver badge

    Recipe for resentment?

    As it happens, I recently met a group of tech people on a European holiday island with similar ideas - though with a "low tax" rather than a "no tax" offer. I think it's fair to say there was some disquiet amongst the locals that the "nomads" were pushing up the cost of housing while contributing less than a succession of tourists (you're not going to revisit the same attractions every fortnight) to the general economy and nothing at all to the development of a local tech economy as they were entirely divorced from it working for remote clients/employers. Which of course the locals could do equally as well, but would suffer a much higher tax burden for their identical effort.

    Ultimately it's the same mistake the UK has made with non-doms: there's not much point in welcoming wealthy people into your country unless you tax them. Otherwise all you get is asset price inflation and nothing to compensate for it.

    1. AMBxx Silver badge
      Mushroom

      Re: Recipe for resentment?

      Stage 2 - the new nomads have secure, gated housing developments

      Stage 3 - resentment builds

      Stage 4 - nomads build their own social stuff within their secure, gated areas

      Stage 5 - sales of machetes increase

      1. LogicGate

        Re: Recipe for resentment?

        Stage 6 - less rich non-doms that do important work and are paying their taxtes plus extra fees for beeing non-doms are gleefully sent packing

        Stage 7 - flagwaving, and singing of national anthem

        1. AMBxx Silver badge

          Re: Recipe for resentment?

          Stage 8 - Poverty for those that remain

          Stage 9 - see Stage 1

    2. ThatOne Silver badge

      Re: Recipe for resentment?

      > there's not much point in welcoming wealthy people into your country unless you tax them

      Well, it's the old debate about if rich people bring wealth to the poor people around them (for instance by creating service jobs) or if they just suck the blood out of them (for instance by increasing the cost of living). They don't need to be foreign BTW, all you need is wealthy people moving in to some place where the locals are (comparatively) poor.

      What happens in reality is well known, and called the "gentrification" process. Economy being what it is, prices will start to go up, and while lots of locals will now be able to get those prestigious gardener/chambermaid/housekeeper/dog walker jobs, the increased cost of living will hit everybody else too. So does it improve the local population's life? Well, it might for those who's life dream was to walk some spoiled lap dog, but the rest of them will eventually have to move out as prices eventually rise above what they can afford.

      1. silent_count

        Re: Recipe for resentment?

        @ThatOne

        Your description is spot on. The alternative scenario is that the (relatively) rich foreigners stay (and keep their money) wherever they are. Are the locals better off that way?

        Would the dog walkers/gardeners/housekeepers be unemployed burdens on society or would they learn to code or become an architect, or start the next google or amazon?

        I don't know the answer but if the there's and enterprising economist out there, I suggest that this would be worth looking into. This seems like a situation which will play out with increasing frequency over the coming years.

        1. John Brown (no body) Silver badge

          Re: Recipe for resentment?

          "Would the dog walkers/gardeners/housekeepers be unemployed burdens on society or would they learn to code or become an architect, or start the next google or amazon?"

          Some may succeed but most of them will probably be renting and be priced out of the area. Those better paying but still low paid service jobs suddenly become uneconomic because they can't afford to travel from their "new" poor area to the now gentrified area to be gardeners, dog-walkers, whatever. See for examples, teachers and nurses who work but can't affords to live in London and see their wages eaten up by commuting costs.

        2. ThatOne Silver badge

          Re: Recipe for resentment?

          > The alternative scenario is that the (relatively) rich foreigners stay (and keep their money) wherever they are. Are the locals better off that way?

          Well, those poor locals did live somehow till now, so I'd be tempted to say "yes".

          It' is not "better" as in "more wealthy", but as in "still poor, but at least with a home, in a familiar environment they know how to survive in". As opposed to be still as poor, but now also homeless without anywhere to go...

    3. Triggerfish

      Re: Recipe for resentment?

      Following a digital nomad forum, I get the impression quite a few would be happy to pay some taxes in return for a better visa status.

    4. Dave314159ggggdffsdds Silver badge

      Re: Recipe for resentment?

      "it's the same mistake the UK has made with non-doms: there's not much point in welcoming wealthy people into your country unless you tax them."

      Except that the UK hasn't made any such mistake, and has benefited greatly from the non-doms.

      I really don't know what's so hard to understand about the obvious facts that a) people who don't live or earn money in your country - non-doms - don't _owe_ anything in tax, and b) it's better to get the tax on the very large sums they spend than to get nothing at all.

      As long as there is excess capacity, as in Bali, it's a no-brainer with no downsides.

      1. Warm Braw Silver badge

        Re: Recipe for resentment?

        I really don't know what's so hard to understand about the obvious facts

        The whole point about non-doms is that they do live in the country (usually for around 15 years before they leave for 5 and come back again) in reality, their not living here is a simple fiction (though with a long historical precedent). If they didn't live here then they wouldn't be spending "very large sums". I'm not sure that's up for reinterpretation.

        Other people who live here to exactly the same extent are expected to pay tax on their worldwide income, so there'd have to be an appreciable gain to have an anomalous regime for the benefit of wealthy foreigners.

        The reason those people are here is to avoid tax: apart from luxury consumer goods, most of the spending (for example on property) is done in tax-efficient ways through opaque company structures. There's not much evidence of economic benefit outside a few luxury car dealers, interior decorators and security firms.

        And of course there's a downside: huge swathes of property in London - and increasingly in other cities - scarcely occupied, or buy-to-leave, driving out local residents and the London laundromat just to get us started.

        1. Dave314159ggggdffsdds Silver badge

          Re: Recipe for resentment?

          If you have to flat-out lie to make your far-right propaganda points, it says a lot about what you're actually doing here.

  4. elsergiovolador Silver badge

    Green death

    Yes, I can see all the creative people flocking to Bali when you can get executed for having a spliff.

    1. tiggity Silver badge

      Re: Green death

      Conservative culture not great if you are female also worth a mention (and various other fierce (beyond drug laws) laws that could catch people out

    2. Cederic Silver badge

      Re: Green death

      So I get sun, sand, gorgeous sea _and_ no idiot drug addicts?

      Sounds better all the time.

      1. elsergiovolador Silver badge

        Re: Green death

        Even medical cannabis is banned there, so you are dismissing quite a chunk of fellow disabled IT peeps you call "idiot drug addicts".

        Maybe it's good there are places for people like you to congregate.

  5. Mayday Silver badge
    Trollface

    Kuta.

    Stay away. That is all.

    Much better time a bit further up in Canggu or Legian. Just watch out. Do you want Aussie bogans in Kuta or wankers who deny being Aussies in their sarongs and yoga mats?

    I’ve got other places I like a lot more but I’m not saying here because I don’t want to see any of you there.

  6. Outski Silver badge
    Pint

    Downside

    A downside of Bali for me would be that it's only 100 miles from my mother-in-law.

    "What's that, beloved? Yes of course I like your mother (exactly where she is, 8000 miles away)"

    None of this if m-i-l came to stay ----------->

    1. seven of five

      Re: Downside

      Downside? That is a cricital flaw!

  7. doublelayer Silver badge

    How many could work there

    I can't imagine that many companies being happy to hire someone who lives there when they ordinarily would be hiring them locally. In addition to the time zone issue, there's the international tax and labor laws issues as well. If they were willing to deal with all of that, they could and probably would have outsourced the job a while ago, rather than employing someone at local rates who will live where their outsourced one would. I've seen a lot of remote working positions, but they nearly all say that the employee can live wherever they want in the country of employment at most, not that the employee can go to any country.

  8. DS999 Silver badge

    Tax free status doesn't matter to Americans

    Unless we renounce our citizenship we're taxed wherever we live. However, foreign taxes are a direct credit against US taxes so we don't end up paying any more, aside from whatever expense/hassle there is from filing tax returns in two countries.

    So places like that would need something else to attract Americans - which they could afford to provide by taxing us. Perhaps using part of the taxes we pay to give us the private health care referred to in the story? Quality health care for free will bring in Americans, at least those who are self employed and would otherwise be forced to pay enormous sums for health care in the US!

    I'm a healthy mid 50s male and the cheapest insurance available to me is $10,000 a year. And that doesn't even include dental and vision!

    1. Alumoi Silver badge

      Re: Tax free status doesn't matter to Americans

      Health care and US in the same sentence? Shirley you jest my good man.

    2. John Brown (no body) Silver badge

      Re: Tax free status doesn't matter to Americans

      "Perhaps using part of the taxes we pay to give us the private health care referred to in the story?"

      That would apply to the UK.

      "Quality health care for free will bring in Americans,"

      Ah....wait....what?

    3. katrinab Silver badge
      Meh

      Re: Tax free status doesn't matter to Americans

      You will probably find that the private healthcare is a lot cheaper than what you pay in the USA.

      Certainly, in the UK, you can go private for everything except A&E [emergency room], and because it is competing with free, it is a lot cheaper. In many cases, about 90-95% cheaper.

      There's no law against private A&E treatment, it just isn't available because there's no market for it.

      Indonesia I would imagine is a lot cheaper than the UK for private medical treatment.

      1. Dave314159ggggdffsdds Silver badge

        Re: Tax free status doesn't matter to Americans

        'Private' health care in the UK isn't, though. It's a veneer on top of the NHS. Vanishingly little is done that isn't NHS-funded at the core. Just the rooms are nicer and the scheduling is better.

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Other stories you might like

Biting the hand that feeds IT © 1998–2022