'Digital nomad' visas are easier to get than ever — especially if you're rich

Money can buy many things: a tasty meal, a good car, a luxurious house. But how about an extended stay as a

digital

nomad

on the beautiful resort island of Bali, Indonesia? Well, with $130,000 to spare in the bank account, that could become a reality too. Digital

nomad

s have been defined as "people who choose to adopt a location-independent, technology-based lifestyle that allows them to travel and work remotely, anywhere in the world." And while the

digital

nomad lifestyle has gained a lot of traction since the start of the pandemic, the phenomenon has been steadily increasing since 2014, based on global searches for the term, which according to the OECD began circulating online in 1997.

The digital nomad image you have is the guy who works in a coffee shop for five hours, trying to get free Wi-Fi, between Bali and Phuket, and partying and drinking cheap beers on the beach. How

ever

, the Indonesian government is taking a slightly different approach through a “second home visa,” which allows wealthy foreigners, professionals, investors and retirees to stay in the country for up to 10 years. Matthieu Chauveau has been working as an entrepreneur in Bali since the start of the pandemic. The people are amazing, in my opinion, the sweetest people in the world. One of the best surf spots in the world.

And it is well located, 2 or 3 hours from Singapore, Thailand, not far from Australia. We have a beautiful villa at half the price of an apartment in Paris. Sometimes the only painful thing is the traffic, but I can live with that. According to local authorities, the second residence visa is a "non-fiscal incentive" for certain foreigners to make a positive contribution to the Indonesian economy. And Matthieu has been doing just that. In 2020, he founded Tropic Invest to help foreign individuals and organizations invest safely in Indonesia. Today, his company has expanded to facilitate the development of real estate projects in the country.

In Bali, or in Indonesia in general, in the real estate market you cannot get a loan as a foreigner, so you have to pay in cash. Now, around Canggu, a villa will cost $350,000 or $400,000, $500,000, so it's quite a bit of money. So clearly it is those types of people that this new visa wants to attract. Because they bring wealth, they will spend, buy houses, send their children to school, and perhaps create new businesses. Indonesia is just one of many countries that have launched new visa programs aimed at digital nomads like Matthieu. As of June 2022, more than 25 countries and territories have introduced their versions of digital nomad

visas

to attract remote workers, according to a report by the Migration Policy Institute, a US-based think tank.

Kate Hooper is a policy analyst and co-author of the report. Although the first programs were actually introduced around the pandemic, initially as a way to replace the fallen tourists that occurred during the early months of the pandemic, they now appear to have survived the Covid-era travel restrictions. And so we're now seeing more and more countries introducing these programs with quite competitive conditions in terms of how long you can stay, the minimum income and various other types of agreements, such as whether or not you have to pay income taxes. So, there is an element of competition. According to Indonesia's tourism minister, 95 percent of digital nomads surveyed rated the country as a top destination for remote work.

So what factors do digital nomads typically consider when moving to a new destination? We wanted to look for something different, a different environment. We knew that, due to the nature of our business, we could offer a service here as well as internationally. It is one of the largest energy centers in Southeast Asia. The way the systems work here I call lifestyle optimization. It's definitely about lifestyle, I'm a new mother and to get help at home I'm a very busy business woman so trying to juggle both was very difficult and with the skills shortage in Australia it was difficult to find help.

So, I decided to move here because of the lifestyle and I also grew up on an island, so I wanted that for my daughter. For Matthieu, a longer-term perspective helped him narrow down his options. Many people think that Indonesia is a very distant country and not very developed. In reality, Indonesia is huge, it has 280 million inhabitants, the growth is astonishing, 6 percent a year. And in the next five or ten years they will be much larger than France, the United Kingdom and Europe. If you are an entrepreneur and want to be close to one of the fastest growing markets in the world, then you need to be in Indonesia.

But adopting a digital nomad lifestyle isn't easy. A report from independent workforce management platform MBO Partners noted that personal safety, being away from family and friends and loneliness were among the top challenges cited by American digital nomads. So how does Indonesia's second residence visa compare to other countries? The simple answer is that it differs in three fundamental aspects. In other countries, digital nomads are typically business owners or employees of a company back home. In Indonesia, candidates are not required to be employed, but are encouraged to invest in the country. If you want to capture some of this market, you can't do it without being based in Indonesia or partnering with someone in Indonesia.

The regulations are very complicated to understand; You need the right lawyers and notaries, it takes time. Secondly, most

visas

offered elsewhere allow digital nomads to stay for up to a year, with the option to extend them in certain cases. While in Indonesia the period of stay is up to 10 years. And finally, while most countries require some proof of monthly or annual income, Indonesia requires a six-figure sum in applicants' bank accounts. There is a history of retiree visas in the region and this is where I think the new Indonesian visa really aligns, more so than with digital nomad programs: geared towards people who are not currently employed, who may have passive income, but who have a fairly high net worth. individuals and allow people to stay for longer periods of time.

But there are questions about how these visa programs will be implemented. For example, issues related to taxes, social security and labor laws. Kate tells me this requires a rethink of policy. The ability to work from anywhere and the reality of immigration and employment systems and tax systems are built with a particular country in mind. There is an interesting gap between employers' interest in offering remote work policies as a benefit to attract workers and what they are comfortable offering. So even with some of the more high-profile work-from-anywhere policies, it ends up being a little bit more restricted, because I think employers are worried about not complying with some of these rules.

According to the OECD, digital nomads, like any other foreign resident, are considered tax residents in the host country after 183 days. How

ever

, several countries, including Croatia and Mauritius, have issued tax holidays for up to one or two years. If you work in Indonesia and generate income in Indonesia, you should definitely pay taxes. If you win a million dollars, one of the main criteria for deciding where you will live will be taxes. It also remains to be seen whether these digital nomads will have a significant effect on the local economy. There have been some studies that attempt to highlight the different economic benefits and potential drawbacks of digital nomads, but they are actually in their infancy.

So these studies take into account things like the impact on local housing prices, digital nomads' spending on restaurants, services, cars, as well as some of the more intangible contributions. Many of these digital nomad programs include comprehensive services that attempt to entice people to move to specific areas. Sometimes these are areas that are a little less visited by tourists or that try to attract people out of season. If you start a company in Indonesia, I think it's a great rule: you must hire 10 Indonesians for every expat. You contribute your knowledge, investors and talents, but you have to give back to the country.

It's like a win-win partnership. Policymakers are adapting to the changing geography of work. But are they doing enough? I think another issue for digital nomad programs as well is that they are currently meant to be strictly temporary. So even if you end up staying a couple of years, the idea is that you stay for a limited period of time and then return to your home country. Will more access routes be created that allow a digital nomad who has created links with the local community to stay long-term? Currently, that route generally does not exist. But that's an area where we could also see some adaptations in the future.

Measuring the success of the Indonesia second home visa will take time. Most importantly, however, the initiative has provided another avenue for foreigners to adopt a lifestyle they would not otherwise be able to enjoy in their home countries. I think Bali would be an ideal place to attract foreign investment, so a visa like this would be perfect for a lot of people I know and me, depending on how we structure our business in the future. Having the option to live where I want when I want and get on a plane and do something different, to me it's a no-brainer for that visa.