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Moving to Indonesia: The Ultimate Guide for Expats

From an exotic range of wildlife to pristine and picturesque islands, Indonesia is not just a great holiday destination – it’s also an incredible place to live. This guide will take you through the entire process of moving to Indonesia and give you insights into everything you need to know to make it there as an expat.

Updated: 12/12/2022
Read time: 13 minutes
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Moving to Indonesia Checklist

Before you start packing your snorkeling gear, or go looking for houses, check out this mini guide as your starting point. Here’s our checklist for moving to Indonesia:

  • Research expat forums to see if Indonesia is the right fit for you
  • Pick a region or city (search for housing and transport options)
  • Ensure your passport is in order
  • Check vaccination requirements or any travel restrictions concerning Indonesia
  • Figure out visa and residence permit requirements
  • Check if you’re eligible for work
  • Gather records that you may need during your stay in Indonesia (you might need to translate some of them)
  • Open a bank account
  • Buy a local SIM card

Visas, Work Permits, and Residency Requirements

Most travelers can enter Indonesia without a visa or apply for one upon arrival – the on-arrival visa is valid for up to 30 days and can be extended for another 30 days. There is also a visit visa which is valid for 60 days, and is the best option for those traveling as tourists, journalists, or researchers. However, since your plan is to move there, you will need to know the details about a long-stay Indonesian visa or other types of residency visas. 

Work Permits

If you’re planning to live and work in Indonesia you should know that getting a work permit is a complex and costly process. This is why we strongly recommend first checking with the Indonesian embassy about the required documents and application procedures. 

In general, in order to be eligible for an Indonesian work visa you must first get the Visa Izin Tinggal Terbatas (VITAS) or Electronic ITAS (e-ITAS). This type of visa is issued to an expat who will be joining an Indonesian company as a salaried worker and also extends to immediate family.

Once you get the VITAS and arrive in Indonesia, it will be replaced by a Kartu Izin Tinggal Terbatas (KITAS), valid for 12 months with an option to extend it for another five years. However, the application for KITAS should be done by your sponsor (employer).

Indonesian Residence Permit

The Kartu Izin Tinggal Tetap (KITAP) is the official permanent residency visa and applies to employees who’ve been issued work permits for three consecutive years or more. As of recently, there is also the popular second-home or Visa Rumah Kedua, which allows foreigners to stay in Indonesia for ten years.

If retirement is the reason for your transition, you will need to apply for a retirement KITAS which will be valid for one year with an option to extend it for five more years. The application can be done online at the Indonesian Consular Office.

Note that whichever visa you apply for, once you arrive in Indonesia, you will have to follow up with the Directorate General of Immigration.

Moving to Indonesia

According to reports, there are more than 350,000 immigrants in Indonesia, most of which are in Jakarta and neighborhoods like Sudirman, Kuningan, and Menteng. Many of them come from countries like China, South Korea, Singapore, and Thailand, but there are also plenty from the US.

Moreover, thanks to the rising trend of remote working and new visa requirements, expat demand for homes in Bali and surrounding areas is surging. What’s more, the majority of people looking to settle in Indonesia are from Hong Kong, Singapore, and Los Angeles.

Adapting to Life in Indonesia

15,500,000 tourists go to Indonesia every year, placing it among the top 30 most visited countries in the world. Second to Mexico only, Indonesia is a country with a very high score in regards to ease of settling in, with 77% of expats declaring they are happy with their social life, which is 21 percentage points more than the global average.

Amidst the mesmerizing beaches, wellness homes, temples, tribes, and vibrant dancers, one word is key – tropical. The Indonesian tropical climate takes some getting used to because it has no middle ground. It’s hot and humid, and then there is the monsoon season, typically between November to March, but greatly varying by region. Other than that, the average minimum temperature in Indonesia is 22.8°C, with humidity levels reaching as high as 95%. 

Indonesian cuisine has a large variety of traditions, tastes, and influences, and it’s also ranked 14th in the world. Expats in Indonesia who are fans of Indian food can find specialties influenced by Indian and Middle Eastern cuisine on the island of Sumatra. In Jakarta, you can taste the flavors of the native cuisine, including the famous nasi padang, gado-gado, satay, and soto. Also, given the proximity to China and the influx of Europeans, you’ll have no problem finding specialties reminiscent of these cuisines as well. 

Finally, you probably have safety concerns about terrorist attacks, pollution, and natural disasters due to volcanic activity. Unfortunately, the only advice we can offer is to stay vigilant, follow the news, and register with your embassy, so you have their emergency contact details ready.

Cost of Living in Indonesia

The latest surveys show nearly 65% of expats say their household income is more than enough to live comfortably in Indonesia. Moreover, a total of 73% of expats have a positive view of the cost of living in the country – in fact, the latest reports say a couple can live comfortably on $1,500 a month.

As far as utilities go, in 2021, the average electricity price in Indonesia was IDR 1,333 or $0.085 per kilowatt-hour. So, if you’re moving to Indonesia from the US, know that you will be paying around 20% less for this. The cost of utilities for an apartment of around 85m2 is a little over $110, with the price of the internet being the highest at around $30. 

In regard to housing, a fully furnished two-bedroom house costs from IDR 6.9 million to 12.3 million per month. Three-bedroom apartments in more strategic areas on the south coast are rented for IDR 8.5 million to IDR 23 million per month. In other words, rent can be as low as $440 per month or as high as $1,400. 

And while the cost of living in Jakarta is not the highest, one square meter in Jakarta of residential land costs IDR 15.26 million or $974.45. In fact, this is the reason why many Jakartans are moving to satellite cities like Bekasi, Tangerang, South Tangerang and Bogor, and Depok, where the average residential land price is IDR 7.7 million or a little under $500 per m2.

Cheapest and Most Expensive Cities

With a total of 17,500 islands—7,000 of which are populated—Indonesia is a treat for any taste, whether you are seeking a peaceful town with beautiful landscapes and fertile soil or a more advanced and colorful lifestyle.

Those seeking a more affordable option should know that the cheapest place to live in Indonesia is Banyuwangi, the administrative center of East Java, where according to data from the Central Statistics Agency (BPS), a family of four would require around IDR 3.03 million or around $190 per month. Other affordable Indonesian cities are:

  • Solo
  • Yogyakarta
  • Metro
  • Cirebon
  • Probolinggo

But of course, even though Indonesia is a relatively cheap country, prices across major cities vary a great deal, especially those for food and housing. And yes, people living in Bali, Indonesia—which is the most expensive tourist destination in the country—do pay higher prices, but Indonesia’s most expensive cities are in fact:

  • Jakarta
  • Surabaya
  • Bekasi
  • Depok
  • Semarang
  • Tangerang
  • Makassar

Makassar has officially been declared the most expensive city to live in outside Java, where the average expenditure per capita is $207.62 or IDR 3,253,338.

Transport and Infrastructure

Indonesia has a total of 496,600 km of roadways, 8,200 km of railways, and more than 21,500 km of waterways supported by a massive 10,427 harbors. It also has more than 600 airports making it the second-fastest-growing aviation market in the world. However, since you would be living in Indonesia as a foreigner, you should know that despite the many efforts made by the Government to improve public transport, it still has a long way to go. 

Even though there are four train networks in Java and Sumatra, commonly used for long-distance travel, as well as buses and ferries, which provide decent public transport, your best option to move around is driving or getting a taxi. As an expat, you will probably need an Indonesian driver’s license called a Surat Izin Mengemudi (SIM).

Working in Indonesia

In July 2022, foreign direct investments in Indonesia amounted to $10.83 billion, with Singapore, China, Hong Kong, Japan, and Malaysia being the largest investors. Naturally, most expats working in Indonesia are employed by foreign companies operating in sectors like transportation, base metals, warehouse, and telecommunication but also manufacturing and mining. In addition, there is a significant number of expats working in the tourism and export sector or as English teachers.

Moreover, even though the unemployment rate in Indonesia currently stands at 5.83% and the country’s minimum wage is IDR 4.42 million (around $280), there are plenty of jobs in Indonesia for expats, especially in the IT sector. So, if you have skills in areas such as AI, graphic or UX design, and web development, you’ll be able to find something that pays better.

Healthcare

Indonesia has made huge progress and has a satisfactory growth rate of the economy projected at 5.3% in 2023. Nevertheless, the public healthcare system is not always up to the task of providing adequate service to both Indonesians and expats.

In fact, Indonesia has 1.04 hospital beds and 0.38 physicians per 1,000 residents, while in the US, for example, the respective figures are 2.87 and 2.59. So if you’re wondering what’s the best health insurance in Indonesia for expats, our advice would be to opt for private international health insurance. In fact, many wealthier Indonesians rely on such insurance or travel to Singapore, where they can get high-quality treatment. 

School and Higher Education

The literacy rate in Indonesia is 95.7% which is good compared to the global average. The education system includes primary, middle, and secondary schools, and then there’s vocational or tertiary education. So those emigrating to Indonesia as a family should know that compulsory education consists of six years in primary school and three years in junior high school. However, some schools provide accelerated programs which compress the elementary phase to five years. 

Recent reports reveal that over 4 million Indonesian children and adolescents between the ages of 7 and 18 are still out of school, mainly because the educational system is not equally developed across the country. In other words, if you’re living in Indonesia and wish your child to realize their full potential, you should consider enrolling them in a private school, the best of which are located in Jakarta and Bali.

Finances, Taxes, and Remittance

Indonesia has a rich portfolio of taxes levied on companies, investors, and individuals, including corporate and individual income tax, withholding taxes, VAT, luxury-goods sales tax, customs and excise, concessions, and land and building tax. Currently, the government’s revenue to the GDP is approximately 11.8 %, while in 2019, tax revenue was over $129 billion.

Types of Taxes

Regardless of whether you’re moving to Bali, Jakarta, or Sumatra, if you have a Tax Identification Number you will be taxed on a worldwide income basis. But if you meet the criteria of the newly issued omnibus law on job creation, you can apply the territorial basis to the Indonesian Tax Office (ITO), which is valid for up to four fiscal years from obtaining the Indonesian Tax ID. For the rest, there is the self-assessment system which demands taxpayers to calculate and settle their Annual Individual Income Tax Return (AIITR). 

Now, relocating to Indonesia means you will be staying there for 183 days or more in any 12-month period, therefore qualifying as an Indonesian tax resident. This means you will be charged with individual income tax, for which the rates start from 5% for an annual income of up to IDR 60 million (around $3,800) and go as high as 35% for income of over IDR 5 billion (over $5 million). Capital gains tax rates for individuals vary between 0.1% and 35%.

If you’re moving to Indonesia for work or because you are planning to invest there, you should know that if a company is established and effectively managed in Indonesia, it qualifies as a tax resident. And as such, it will be levied corporate income tax of 22%. Branch tax rate is also 22%, with an extra 20% on branch remittance tax. The capital gains rate is 22%. 

Finally, moving funds to and from foreign countries is allowed however, for money transfers from Indonesia of $100,000, the person undertaking the transaction is obligated to provide appropriate documentation to the Bank of Indonesia. 

Marrying and Starting a Family in Indonesia

If your reasons to move to Indonesia are related to starting a family or tying the knot with a special someone, you should know that Indonesia is a country deeply affected by religion. In Indonesia, marriage is defined as a physical and, above all, a spiritual bond between a man and a woman. Consequently, only people of the same religion can get married in the country. Also, for the time being, the Indonesian state does not criminalize same-sex relationships or cohabitation of a couple of any sexual orientation. 

As an expat living in Indonesia, if you’re not doing a Muslim ceremony, you would have to first have a religious ceremony (in a temple or church) and then a civil one. But before you go scouting for locations for your wedding reception, we recommend you first check with the nearest Civil Registration Office and see about the paperwork needed to get married in Indonesia. Of course, you would also need a certificate of non-impediment to marriage which is normally issued by your embassy or consulate.

Buying Property in Indonesia

When it comes to the pros and cons of living in Indonesia, the great news is that despite recent increases in residential property prices, the country remains cheap compared to other countries. The bad news is that foreigners are not legally permitted to own property. 

However, in 2015, some efforts were made to loosen the permit procedures for foreign businesses and residences. Per the latest government regulation on residential ownership for foreigners, non-Indonesian residents who are domiciled in the country can buy landed homes for up to 80 years. 

Moreover, under the law, visa holders can buy land in Indonesia under the Right to Use (hak pakai) title, which is initially granted for 30 years and can be extended for another 20 years and renewed for another 30 years. The catch, however, is that non-Indonesians can only buy a single plot of land no bigger than 2,000 square meters.

Finally, property tax in Indonesia is up to 0.3% of the home’s market value and is calculated annually. Tax for transfer of land and building is set at 2.5% while the acquirer of the land will be levied another 5%.

Retiring in Indonesia

If you’ve worked hard all your life, it’s only logical to want to spend your days of freedom in a country where the food is great, the people are friendly, and the sunsets are spectacular. And of all of Indonesia, Bali is where anyone would wish to retire, especially places like Seminyak, Sanur, and Uluwatu, all of which have amazing beaches.

Regarding visa requirements, the great news is that in addition to the Indonesian retirement visa, which doesn’t permit you to work, as of Christmas 2022, you can play the trump card and enjoy Bali for the next ten years. The only condition is for you to have $130,000 in your bank account, you are eligible to move to Bali. However, given the Indonesian healthcare system, no matter which option you choose, we strongly advise you to get full coverage from a private insurance company.

The Bottom Line

Living in Indonesia is a dream for many who seek to explore the great volcanoes of the earth or simply enjoy a more peaceful way of life. As much as it’s worth exploring, Indonesia, with its islands, is not a country without faults, especially in regard to the healthcare and education system. Whatever your reasons for moving to this wondrous country, we hope this guide has given you the insight you need to make a more informed decision.

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Hristina Nikolovska

An internship in a digital marketing agency during her freshman year of university got Tina into SEO. A decade later, she’s utilizing her educational background in English and knack for research to craft website content on anything from marketing and tech to finance and crypto. When she’s not investigating ways to dominate SERPs, you’ll find her randomly roaming cities and sunny coasts all over the world.

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