Digital nomads preferred: Australian retirees in Bali being told to pay up or move out

As the Indonesian government welcomed world leaders to the G20 in Bali last week, thousands of retirees who have made Indonesia – and in particular Bali – their home, are getting their welcome mats withdrawn. Indonesian-based journalist Duncan Graham reports.

As the end draws near and the dullness of suburbia hardens like arteries, retirement wakens old dreams. If only we’d been more adventurous, less quenched with fear of the unknown and risked the odds.

Now there’s a chance to reset life – spending what years remain in magical, mysterious Bali, not as a come-and-go tourist but as a settled resident. Every day in the laid-back tropics, beach in the morning, siestas after massage and helpers so cheap you’ll feel guilty and want to double their salaries.

Countries with holiday spots that lure foreigners like earning by stamping passports, rather than shipping coal or iron ore. Malaysia, Thailand and Singapore offer “second home visas”. Now Indonesia is getting into the game.

On October 25, Indonesia announced a long-stay visa targeting digital nomads and people sufficiently well off to bring money into the economy. Some details of the new visa remain unclear, but it is supposed to come into effect on Christmas Eve – an irony adding insult to injury for some. But don’t sell the car and give the furniture to the kids yet, because their bureaucrats, like ours, don’t always meet deadlines.

The real catch causing uproar among existing and prospective expat retirees is that the new visa is supposed to replace the current retirement visa – the KITAS (KITAP for longer term).

The retirement visas have been in place for years, allowing people over 55 to use their home nation’s pension or savings to settle in Bali, get a long-term home lease and hire staff to service it. The only caveat is that you have to show proof of having the money to sustain yourself, have health insurance and a guarantor, usually organised by a local visa agent. KITAS/KITAP holders also cannot work or earn income in Indonesia.

Although it allows holders to work, the new Second Home Visa has other restrictions. To qualify, a deposit of approx. $200,000 is required to be made into an Indonesian bank, and to remain there for the duration of the visa (five or ten years). Alternatively, a “luxury home” may replace the bank deposit as surety. The definition of “luxury home” is unclear, and it only applies to certain types of leases. There are also many restrictions on foreigners owning property in Indonesia.

This is what has retirees on the existing visas so concerned. Thousands have arranged their lives and finances based on the existing rules, and they will now have to either comply with the rules of this new visa, or leave.

In a recent meeting between an interest group representing expats and immigration officials, it was made clear that:

People on retirement visa will have 180 days to change their visa to the new Second Home visa or to a short-term visa, or leave.

For many – perhaps the majority – of current retirement visa holders, the new rules makes leaving the only option. Short-term visas are generally limited to six months and raising $200,000 cash is a big ask for most who are either on a pension or have their money in a super fund or similar. Despite the new rules not yet in effect, there are many reports of retirees who have already decided to leave, and leasehold prices are reportedly falling in areas popular with retirees.

And when these people leave, those they employ will be out of a job, and the landlords without a tenant.

The Second Home Visa is a great idea, and is no doubt a response to similar arrangements in Malaysia, Thailand, Singapore and elsewhere. The business of attracting wealthy immigrants is a competitive one. But so far, no explanation has been given by the Indonesian government as to why it needs to throw out the thousands of retirees who contribute to the economy by employing staff, hiring cars and motorbikes, living well and paying for long-term leases, often for years up-front.

Bali got more than a million Aussies a year BC (Before Covid) and numbers could lift following positive publicity from the G20 diplomacy show. According to the Bali Legal and Human Rights regional office, 787 Australians were granted long-term stays in Bali in 2018. At that time, there were just under 14,000 retirement visa holders in Bali alone.

Immigration is a national responsibility, so Jakarta rules. Whatever the final regulations, expect changes. Government policy making in general is often fluid and subject to sudden changes – often after listening to the responses of interest groups. Nothing wrong with that.

If considering coming to Bali for the long term wanting solitude, think beyond Kuta and Ubud. The new visas includes ten other “holiday” zones across the Republic to lessen pressures on Bali.

Immigration officials can deport without using the courts. No rights to prolonged appeal procedures, so the choice could be on the plane or in the slammer. Lawyers willing to defend aliens are hard to find. Immigration advisers abound, but best advice is to DIY using official resources.

That doesn’t mean that most Indonesians are crooks, quite the contrary. The percentage of con artists and shonky operators is probably no higher than in Oz. The difference is that Indonesia lacks strong consumer protection laws and dispute settlement tribunals, so if there’s a falling-out, the foreigner will most likely lose.

Medical care has improved greatly this century and horror tales of dirty hospitals and sloppy docs (which we also have Down Under) are a lot less common.

Your correspondent’s contacts with GPs, specialists and hospitals in the public system have been professional and outcomes satisfactory. Encounters and experiences are rarely universal, only rough guides. So far mine have been more plus than minus, also with guys in uniforms.

But unless the Indonesian government has a change of heart, these and other benefits of living in Indonesia may no longer be available to the average retiree without a fat bank balance.