Indonesia has launched a long-term visa scheme aimed at attracting foreign investors, President Joko Widodo announced.
The new “Golden Visa” program offers visas for up to ten years in exchange for substantial financial investments in the country, signalling Indonesia’s effort to lure “good quality travellers” and foreign capital.
What are the requirements for the Golden Visa?
The Golden Visa scheme offers various options based on investment amounts:
Five-Year Visa: Requires setting up a company worth $2.5 million or placing $350,000 in Indonesian government bonds, public company stocks, or deposits.
Ten-Year Visa: Requires setting up a company worth $5 million or placing $700,000 in Indonesian government bonds, public company stocks, or deposits.
Corporate Investors: Must invest $25 million to secure five-year visas for directors and commissioners, and $50 million for ten-year visas.
Special Capital City Incentives: Investments in the new $32 billion capital city being built in Borneo offer five-year visas for $5 million and ten-year visas for $10 million.
Who is the recipient of the first Golden Visa?
President Widodo personally awarded the first Golden Visa to Shin Tae-Yong, the South Korean-born coach of the Indonesian national football team, during a ceremony in Jakarta.
The event was attended by prominent officials, including the Minister of Law and Human Rights, Yasonna Laoly, and the Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan.
Significant interest and economic impact
The immigration agency chief, Silmy Karim, revealed that nearly 300 applicants have already been granted Golden Visas since the program’s pilot phase began last year, bringing in $123 million in investments.
He also mentioned plans to introduce a special status for foreign nationals of Indonesian descent, modelled after India’s Overseas Citizenship of India (OCI), which could be implemented by October.
A global trend with limited success
Indonesia’s move follows a global trend where countries offer similar investment visa schemes.
However, some nations, such as Canada, Britain, and Singapore, have recently scrapped these programs, citing concerns that they do not generate sufficient jobs and may facilitate speculative investments.
The Canadian Immigrant Investor Program was terminated in 2014. The program faced criticism for being a means for wealthy individuals to park their money in real estate, leading to inflated housing prices and contributing to housing affordability issues in cities like Vancouver and Toronto.
The UK’s Tier 1 Investor visa program too was suspended in 2018 and later permanently closed in 2022.
Apart from the primary reason that investments made through the program were not creating substantial employment or benefiting the wider economy, concerns for national security too played a role.
The government identified potential vulnerabilities in the program that could be exploited by individuals with questionable backgrounds.
What do experts say?
In a note in January this year, when the Indonesian government announced its intent to launch the special visa program, KPMG noted that in today’s ever-changing global landscape, multinational corporations, entrepreneurs and high-net-worth individuals (HNWI) are exploring relocating abroad and more international investment opportunities.
Besides the longer stay duration, Golden Visa holders are also entitled to some privileges such as service priority in line at the immigration office, service priority from other related government bodies, simpler procedures when leaving or entering Indonesia, and other similar privileges.
However, the firm highlighted that the immigration officer will conduct an Immigration Guarantee Evaluation every year for all Golden Visa holders to make sure that they still meet the criteria above.
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