For expatriates planning to live, work, or invest in Indonesia, understanding how the key government institutions operate is more than just paperwork—it’s essential to a smooth and successful transition.
A recent article by Indonesia Expat highlights the three most important government bodies every foreigner in Indonesia should be familiar with: BKPM (Investment Coordinating Board), Immigration, and the Tax Office (Direktorat Jenderal Pajak).
These entities are responsible for overseeing business licensing, legal stay permits, and tax obligations for both individuals and corporations.
“You’ll have to deal with three government bodies if you want to stay and work legally in Indonesia: the BKPM, Immigration and the Tax Office,” the article explains.
1. BKPM: For Those Wanting to Do Business
The BKPM, now operating under the name Ministry of Investment, plays a vital role in approving foreign direct investment (FDI) and issuing business licenses. For expatriates wishing to start a business or own a company in Indonesia—such as a PT PMA (Foreign-Owned Company)—BKPM is the first stop.
With the Online Single Submission (OSS) system now in place, the process of registering a business has become more streamlined. However, local expertise is still crucial to navigate requirements around ownership percentages, business fields, and capital thresholds.
“Establishing a PT PMA allows you to apply for a stay permit (KITAS), but it also requires you to submit monthly tax reports—even before operations begin,” warns the article.
At Noble Properties Asia, we’ve supported several clients through this process, especially those combining their investment in Indonesia with property purchases in places like Bali, where a PT PMA structure can help secure longer-term ownership solutions.
2. Immigration: Staying Legal in Indonesia
Whether you’re coming to Indonesia as a retiree, digital nomad, investor, or professional, Indonesia’s immigration office (under the Ministry of Law and Human Rights) handles all matters related to your legal stay.
This includes issuing KITAS (limited stay permits), second home visas, and overseeing visa extensions. The type of visa you choose will affect everything—from how long you can stay, to whether you can buy or lease property, or bring family members with you.
Recent immigration developments such as the Second Home Visa (which requires proof of funds or property ownership) and Digital Nomad Visa programs reflect the government’s interest in attracting long-term foreign residents with spending power and stability.
“If you work illegally on a visitor visa or overstay, you can expect serious legal consequences—including blacklisting,” the article emphasizes.
3. Tax Office: Know Your Status
Indonesia taxes based on residency—not just citizenship. If you spend more than 183 days in Indonesia in any 12-month period, you are considered a tax resident and must report worldwide income.
This is where things can get tricky for expats who assume that just having a visa or permit is enough. Whether you earn income locally or abroad, registering with the Tax Office and understanding your NPWP (Taxpayer Identification Number) obligations is key.
“Even if you don’t earn income in Indonesia, if you’re a tax resident, you must report your income. Failing to do so can trigger penalties or audits,” the article states.
At Noble Properties Asia, we often advise clients working with accountants or legal professionals who specialize in expat taxation to avoid surprises. This is especially important when buying property through a company structure or leasing land for villa development.
Relocating or investing in Indonesia?
Our team at Noble Properties Asia can connect you with trusted legal and immigration experts—so you can focus on your new chapter in Indonesia, while we handle the logistics.
📍 www.noblepropertiesasia.com
📩 hello@noblepropertiesasia.com
📱 +62 877-1668-5505
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