Tourism and Creative Economy Minister Sandiaga Uno’s plan to woo more foreign tourists to Indonesia, especially Bali, through a digital nomad visa deserves the full support and cooperation from other ministries and government agencies as the country copes with the economic impact of the COVID-19 pandemic.
The digital nomad visa, which authorizes tourists to work remotely in the country but earn their income from overseas businesses, fits well with the needs of an increasing number of professionals who prefer working remotely online and allows them to travel anywhere in the internet-connected world. Unlike regular remote workers who tend to stay in a particular geographic area, digital nomads like to travel and explore the world while working.
Different from other countries such as Italy, Spain, Norway, Barbados and Croatia, which offer nomad visas only for up to one year, Indonesia will grant the nomad visa for up to five years. We think such a long period is not too long for Indonesia, the world’s largest archipelago country, which offers a wide variety of areas for ecotourism and spiritual retreats.
Given the far lower costs of living in Indonesia, nomad visas could attract professionals and senior executives of start-up companies in Singapore, Hong Kong and Australia.
Visiting remote workers can live tax-free for five years in various popular destinations across the country as long as they earn from companies outside Indonesia. This is boosted by the government removing most of its COVID-19 restrictions for incoming visitors.
Indonesia offers a vast diversity of cultures and is rich in natural attractions and historical heritage. The tourist industry involves many sectors such as transportation infrastructure, health and hygiene, customs and immigration.
Indeed, as a nature and culture-based industry, tourism should be one of the most suitable businesses Indonesia can develop because of the multiplier effect and labor-intensive nature of its operations. Travel-related businesses such as hotels, restaurants, transportation, handicraft and cultural shows are all labor intensive, the very kind of businesses needed to absorb the huge pool of job seekers.
Since the direct benefits expected from tourists with nomad visas are their spending or consumption of domestic goods and services, the government should ensure through regulations that tourists using nomad visas should stay at star-rated hotels or apartments and not backpacker accommodation.
The government also should set safeguard measures to prevent them from entering the local labor market or from doing digital businesses with domestic enterprises. An effective oversight to prevent tourists with nomad visas from being engaged in local digital businesses is imperative because of the numerous types of work that can now be conducted online. Remote jobs such as marketing consultants, software engineers, program developers, graphic designers, architects and data analysts, are some of the professional services provided by the target tourists for the nomad visa program.
Given the inadequate institutional capacity of the government in supervising foreign visitors and the need for additional investment to establish comfortable working spaces with super-fast internet infrastructure, the destinations for tourists with nomad visas should initially be limited to Bali and Lombok islands. These two islands seem to be the most prepared now to welcome high-spending travelers as they can offer adequate infrastructure, attractions and high-quality services.