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Food For Thought: Being A Legal Digital Nomad

digital nomads
Food For Thought: Being A Legal Digital Nomad. Photo-by-Dian-Schuurkamp-on-Unsplash

Revolutions are typically defined as being times of fundamental change.

Most people might associate them with blood and violence to end the rule of one government or political system and start a new one; think of France, Russia and China. But a revolution can also mean a sudden or complete change in the way people live and work, and for that one, we need to think more of “Industry.”

The Industrial Revolution lasted less than 100-years and ushered in an age of steam, power and machines; most definitely a complete change in the way people lived and worked. The changes, however, weren’t always seen as being for the better and in the early 19th Century, the Luddites appeared. They believed machinery threatened jobs and resorted to destroying as much of it as they could. But revolutions are hard things to stop and the Luddites didn’t succeed.

The Information Revolution

Some would argue that we’ve been living in the Information Revolution for quite some time already, and it’s been COVID that’s had a significant impact on this in the way we live and work. Heaven knows, we’ve found ourselves in situations, that less than three years ago, we could of never have imagined – and we have been forced to adapt.

In a recent article, Forbes claims that “one of the most exciting things to come out of the pandemic is that companies accepted the fact that they need to listen to their employees and cater to their needs … The hybrid work model looks like it will be the new standard.” That means more opportunities to combine working remotely from home with going to an office, and with that, we see “a fast-emerging trend of workers taking residence in other countries, as a digital nomad.”

Digital nomads are a mix of full and part-timers working across a range of industries and skillsets; they’re getting younger. Passport-Photo Online’s research shows that IT is the largest segment, followed by creative services, education and training, consulting, coaching and research, sales, marketing and PR as well as finance and accounting. They averagely work less than 40 hours a week as freelancers for multiple companies or they own their own business or they work as regular employees for just one company.

A community as large as some countries

Research from Project Untethered suggests that the “number of digital nomads from the U.S. has more than tripled over the past few years – from 4.8 million in 2018 to 15.5 million in 2021. And that number is expected to top 24 million in the next two years. But digital nomads are from every nationality, not just the U.S.A Brother Abroad is reporting their latest findings for digital nomad statistics and they might raise an eyebrow or two because they claim that “there are over 35,000,000 digital nomads across the globe of varied nationalities … with a combined “economic value of US$787,000,000,000 per year, which is calculated as the aggregate of digital nomad spending annually.” They go on to give that number some perspective by saying that “if the global digital nomad community were a country, it would be the 38th most prosperous based on gross national income per capita, ranking just after Portugal and Saudi Arabia.

Wait! What?

And guess where the most popular destination is for this wanderlust workforce?

Indonesia tops the list of the most popular destinations for digital nomads, with Bali being the jewel in the crown, followed by Mexico, Thailand, Spain, Columbia and Portugal. Reliable, and an ever-improving internet; good weather, unless biblical rains find their way in through the alang-alang; a relatively low cost of living, depending on how much red wine you can drink; things to see and do apart from sitting in front of a monitor most of the day; and easy-to-get visas are all important considerations for this growing army of remote workers. Statista are reporting that “in 2019, Bali had the highest number of digital nomads throughout cities across Southeast Asia, with almost five thousand digital nomads. Comparatively, Jakarta had just 19-digital nomads living there in 2019!” Yes, we know Bali isn’t a city but this statistic illustrates the island’s popularity and potential.

Time to wake up Indonesia’s potential

So, here’s the point – the world has changed, the workplace and workforce have changed and this information-communication-data driven revolution is far from over. We can expect more destinations in Indonesia taking advantage of this growing opportunity, not just to cater to foreign nomads but also to tap into the country’s homegrown digital potential. With a population nudging 280-million people, and with an average age of just 28 (Source: Country Meters) it makes sense that the government is encouraging entrepreneurship initiatives and all things digital. Proof of this pudding can be found in recent reports that MIT and Tsinghua Universities are planning to build a joint technology campus in Bali.

But there is a cloud looming over this utopian summer and it comes in the form of the law. Those familiar with living and working in Indonesia will be well aware of immigration and some pesky things called visas. There are strict rules around visas and what you can or cannot do depending on which visa you hold. And the elephant in the room is that you cannot work (and earn money) if you don’t have the right working visa. Period. Even Business Visas don’t allow you to work, so it pays to get the right advice if you plan to live and work here.

Just this last week, Coconuts Bali published an article about how immigration is threatening to get tough on digital nomads who are working in Bali with the wrong visa and are even asking the public to report those who violate the rules. A bit harsh, you might think, but the article goes on to say that “according to immigration data, there are currently 112,000 foreigners staying in Bali.” And the bottom line is that this adds up to quite a lot of tax revenue if it isn’t being declared, even assuming just 10 percent of this number are working remotely and illegally.

What’s the solution?

There has been talk around Indonesia issuing a special digital nomad visa in line with more than 20 other countries, something those in power should be working on considering the potential positive impact it would have, but this has yet to become a reality. It is worth remembering, however, that recent changes to the law have made it easier for foreigners to apply for and obtain visas to legally work in Indonesia, which makes trying to avoid the process even more serious in the eyes of your friendly neighbourhood immigration official.

At Seven Stones Indonesia we advise our clients that the best way to do business in Indonesia is legally; by following the government’s rules and regulations, which can sometimes change, as we’ve recently seen with the passing of the new Omnibus Laws.

We believe Indonesia is getting easier for foreign investors; systems are more transparent; procedures have been improved; and the time things take, arguably the most important aspect for any business owner, has been greatly reduced. We are here to encourage you to invest in Indonesia and to help guide you through the process of doing so.

If you’re a foreign digital nomad an effective way to do this is by establishing a PT PMA, which is the Indonesian equivalent of a PTY Ltd. It’s not a complicated process, doesn’t cost an arm and a leg and could be the best solution, especially as we’re able to offer representative and virtual office spaces in Bali and Jakarta and help to process those all-important working visas as well as the accounting and tax services you’ll need to keep the right side of the law. Food for thought.

If you’d like more information or want to arrange for a free consultation drop us an email at: [email protected] … we’d love to hear from you!

By: Andrzej Barski, Co-Founder and Director, Seven Stones Indonesia

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