Indonesia Second Home Programme - All Retirement Stay Permits Abolished and Existing Holders Scheduled for Expulsion in Case of Non-Compliance

What happens after 10 years? Can the Second Home Stay Permit (SHSP) holders apply for renewal or extension of another 10 years as long as the 2B fund remains in the same state-owned bank?

Do all SHSP holders entitled automatically to a KITAP (since the scheme grants 10-year residency)?

For new applicants residing outside Indonesia, do they have to come to Indonesia to open bank accounts first (before submitting their applications)? However, how can foreigners open bank accounts without KITAS or KITAP?

What happens if couple of years later you decide to move to another country? I understand you request for an EPO, how about your money in the bank? Can it be withdrawn and transferred out of the country after getting an EPO?

Is there any guarantee the program will not be replaced by another program (like ‘Retirement’ being replaced by ‘Second Home’) in the future? For example, 5 years down the road, ‘Second Home’ is suddenly replaced by ‘Second Home 2.0’, and the amount become 3B. Everybody has to convert (and deposit 1B more), or they have to pack up and leave within 90 days. It’s just not fair, the government should be allowing existing holders to stay until their permit validity runs out, without forcing a conversion or making additional requirements.
 
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What happens after 10 years? Can the Second Home Stay Permit (SHSP) holders apply for renewal or extension of another 10 years as long as the 2B fund remains in the same state-owned bank?

Do all SHSP holders entitled automatically to a KITAP (since the scheme grants 10-year residency)?

For new applicants residing outside Indonesia, do they have to come to Indonesia to open bank accounts first (before submitting their applications)? However, how can foreigners open bank accounts without KITAS or KITAP?

What happens if couple of years later you decide to move to another country? I understand you request for an EPO, how about your money in the bank? Can it be withdrawn and transferred out of the country after getting an EPO?

Is there any guarantee the program will not be replaced by another program (like ‘Retirement’ being replaced by ‘Second Home’) in the future? For example, 5 years down the road, ‘Second Home’ is suddenly replaced by ‘Second Home 2.0’, and the amount become 3B. Everybody has to convert (and deposit 1B more), or they have to pack up and leave within 90 days. It’s just not fair, the government should be allowing existing holders to stay until their permit validity runs out, without forcing a conversion or making additional requirements.
All good questions and I doubt there is anyone in any capacity that would have an answer for any of them. They would need to have actually worked out the program before implementation of it.

The question about a guarantee there will be no changes does have an answer though and I think we all know that answer. There are no guarantees for anything when it comes to directives from the government.
 
For new applicants residing outside Indonesia, do they have to come to Indonesia to open bank accounts first (before submitting their applications)? However, how can foreigners open bank accounts without KITAS or KITAP?

What happens if couple of years later you decide to move to another country? I understand you request for an EPO, how about your money in the bank? Can it be withdrawn and transferred out of the country after getting an EPO?

Many of your questions don't have clear answers, but these ones do. You don't need to get the account first, because you are required to sign that you will deposit the amount within 30 days of getting the visa, and immigration can inquire to see bank statements showing the amount is still there at any time.

As for withdrawal, it's just a regular bank account (at one of the 5 BUMN banks), so withdrawals are handled just as usual, no need for EPO.

The biggest question is the undermined trust you allude to; every visa change prior that I am aware of has always let current visas finish their term. Forcing thousands of people off of properly issued (and paid!) visas is appalling and undermines trust for all future visas and regulations.
 
Translated the documents into English free via https://www.onlinedoctranslator.com/en/translate-indonesian-to-english_id_en and it says in black and white: funds have to be deposited in a state owned bank. Visa agent claims this will be changed - will see.
 
The more I read about this program the more it looks like it is tailored for the Chinese.

or proof of property ownership in Indonesia owned and on behalf of me with the luxury category"


5. Properti adalah harta berupa tanah dan bangunan serta sarana dan prasarana yang merupakan bagian yang tidak terpisahkan dari tanah dan/atau bangunan yang dimaksudkan yakni tanah milik dan bangunan yang dimiliki oleh orang asing sesuai dengan peraturan perundang-undangan.

Under the old scheme, to purchase long term leases (hak pakai) in Indonesia, a person must first have a ITAP prior to purchasing a hak pakai in Indonesia. This program now lets someone that wants to buy a hak pakai at the same time and get an ITAP with it. This program basically copies the Malaysian MM2H.

The majority of applicants for the MM2H programs are Chinese. If anyone has read the statistics on that program, of the 50,000 total applicants approved since the beginning of the program, only a small portion live in Malaysia. China has strict currency controls to affect the valuation of the yuan. Those currency controls are why undeclared cash from Chinese nationals is the largest form of airport asset seizure at most western country airports. It was illegal for the Chinese nationals to leave the country with the money, so they not about to declare that arriving at a foreign country. Purchase of a a residence abroad with a combination of a visa to move is legal under the Chinese currency controls. It is a way legally move wealth outside of China.

It is a discount program to MM2H. If only 1000 applicants sign up, that is $130 million into the government controlled banks or property market. Most of the applicants will likely never step foot in Indonesia.
 
Today Indonesia Second Home program (visa and ITAS) was introduced.

The consequence is that all existing retirement stay permits (ITAS, ITAP) will have 30 - 90 days to register through the Indonesia Second Home Visa program-meaning they have to keep a permanent deposit in the Government Bank in the amount of 2.000.000.000 Rp during all their stay.

This effectively means that almost all retirees will be expelled, as no sane retiree keeps such money as a fixed deposit here, or has no such money at all.

Basically, few people will apply for this scheme anyway, and retirees spending all their pensions here and fueling the local economy will disappear, with their money. The result will be net-negative.

This is called "the law of unintended consequences"
Already one sponsor is using a single account for multiple applications
 
Already one sponsor is using a single account for multiple applications
According to the regulatuion, sponsor can use its proof of funds only for visa sponsorships. However, when the visa has to be converted to KITAS, the applicant-foreigner has to deposit its own funds.
 
The more I read about this program the more it looks like it is tailored for the Chinese.




5. Properti adalah harta berupa tanah dan bangunan serta sarana dan prasarana yang merupakan bagian yang tidak terpisahkan dari tanah dan/atau bangunan yang dimaksudkan yakni tanah milik dan bangunan yang dimiliki oleh orang asing sesuai dengan peraturan perundang-undangan.

Under the old scheme, to purchase long term leases (hak pakai) in Indonesia, a person must first have a ITAP prior to purchasing a hak pakai in Indonesia. This program now lets someone that wants to buy a hak pakai at the same time and get an ITAP with it. This program basically copies the Malaysian MM2H.

The majority of applicants for the MM2H programs are Chinese. If anyone has read the statistics on that program, of the 50,000 total applicants approved since the beginning of the program, only a small portion live in Malaysia. China has strict currency controls to affect the valuation of the yuan. Those currency controls are why undeclared cash from Chinese nationals is the largest form of airport asset seizure at most western country airports. It was illegal for the Chinese nationals to leave the country with the money, so they not about to declare that arriving at a foreign country. Purchase of a a residence abroad with a combination of a visa to move is legal under the Chinese currency controls. It is a way legally move wealth outside of China.

It is a discount program to MM2H. If only 1000 applicants sign up, that is $130 million into the government controlled banks or property market. Most of the applicants will likely never step foot in Indonesia.
I don't think the government officials had such deep thinking. They just wanted to swap the retirees to the new scheme and squeeze 2 billion from each of them to "successfully start the program".
 
As for withdrawal, it's just a regular bank account (at one of the 5 BUMN banks), so withdrawals are handled just as usual, no need for EPO.

I will be surprised if the government didn't instruct the bank to block 2B in the regular bank account, i.e. minimum balance is set at 2B, you can withdraw any amount as long as the remaining balance is not lower than 2B. If my suspicions are correct, that amount can only be unblocked by the authority which ordered it.
 
The majority of applicants for the MM2H programs are Chinese. If anyone has read the statistics on that program, of the 50,000 total applicants approved since the beginning of the program, only a small portion live in Malaysia. China has strict currency controls to affect the valuation of the yuan. Those currency controls are why undeclared cash from Chinese nationals is the largest form of airport asset seizure at most western country airports. It was illegal for the Chinese nationals to leave the country with the money, so they not about to declare that arriving at a foreign country. Purchase of a a residence abroad with a combination of a visa to move is legal under the Chinese currency controls. It is a way legally move wealth outside of China.

It is a discount program to MM2H. If only 1000 applicants sign up, that is $130 million into the government controlled banks or property market. Most of the applicants will likely never step foot in Indonesia.

I doubt if the Indonesian Second Home Programme is the discounted version of MM2H. Unless I have missed something, it seems to me the MM2H is more attractive, and even cheaper than the Indonesian Second Home Programme.

https://www.mm2h.com/mm2h-requirements-terms-and-conditions/

Upon Approval – Fixed Deposit Requirements For MM2H
i) MM2H Applicants aged below 50 years old:
  • Must place a Fixed Deposit in a bank account in Malaysia of RM300,000 (e.g USD 63,526) vs IDR2b (e.g USD 128,555.84) for Indonesian Second Home Programme
  • Can withdraw up to RM150,000 for the purchase of house, medical insurance or children’s education expenses after the deposit has been placed for one year. This one is not in the Indonesian Second Home Programme. So if this one is deducted, it makes it even cheaper.
  • Applicants can use their car purchase grant to withdraw part of their Fixed Deposit after two years. Again This one is not in the Indonesian Second Home Programme. So if this one is deducted, it makes even cheaper and more attractive.
  • Must maintain a minimum balance of RM150,000 from second year onwards and throughout stay in Malaysia under this programme.
ii) MM2H Applicants aged 50 years and above:
The same comparison as below 50yo. But for aged 50 years and above it is even more attractive.
  • Must place a Fixed Deposit in a bank account in Malaysia of RM150,000
  • Can withdraw up to RM50,000 of the fixed deposit after one year to purchase of house, medical insurance or children’s education expenses.
  • Applicants can use their car purchase grant to withdraw part of their Fixed Deposit after two years.
  • Must maintain a minimum balance of RM100,000 throughout their stay in Malaysia under this programme.
In addition to this, Malaysian authority allows foreigners to have a freehold rather than just long-term leasehold properties. The only restriction is If you are not native to Malaysia, the property need to be priced at a minimum value of one million MYR. As people might be already aware of In Indonesia a foreigner cannot own property (e.g freehold), they could only have a leasehold.

How successful the MM2H is ? This begs another question. Do they manage to attract wealthy Chinese People. Is there any independent statistics that could be referred to (not government owned statistics).

Unless they do not use their common sense, I very much doubted if many astute wealthy Chinese, businessmen / tycoons from Mainland China, Hong Kong, Taiwan would be attracted to the second home program, in the country where there is no tax advantage, no benefit / social security system, in the country where their income they do not earn in their second home is still taxable.

From my understanding many wealthy relatively young Chinese tycoons have preferential of choosing the US as their second homes. They will try to meet the minimum residential requirement and giving birth in the US. Thereafter they could go back to China, Hong Kong, Taiwan and do their business as usual. Born in the US, their children will automatically become the US citizens. These children will serve as an anchored children that they could use later to get the US residential permit or to become the US citizens when they need it in the future.
 
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From my understanding many wealthy relatively young Chinese tycoons have preferential of choosing the US as their second homes. They will try to meet the minimum residential requirement and giving birth in the US. Thereafter they could go back to China, Hong Kong, Taiwan and do their business as usual. Born in the US, their children will automatically become the US citizens. These children will serve as an anchored children that they could use later to get the US residential permit or to become the US citizens when they need it in the future.
That is the plan for a lot of foreigners. A huge loophole in the system that is easily exploited.
 
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The more I read about this program the more it looks like it is tailored for the Chinese.
Forgot to mention previously. For wealthy Chinese people, unless they are corrupts, have a channel where they could commit a white collar crime, the last country they would want to settle is Indonesia. So if the intention is to attract these people, it is not going to work.

Just remember how the Indonesian Chinese have been treated, discriminated in the past under the Suharto Regime.
Even until today it is still the culture of Indonesians people, politicians, even the most educated one to still consider that they are more entitled to live in Indonesia than Indonesian people with Chinese descendants. They even openly proclaiming it. Keep in mind many of these Indonesian Chinese are not even immigrants but they are the third generation of Chinese Indonesian who were born and pay tax in Indonesia. They might even pay more tax than those who are discriminating them.

To see a president / pm like Barrack Obama, Rishi Sunak, Leo Varadkhar, Alberto Fujimori to become president/pm in Indonesia, it might be just need to turn Indonesia to become an utopia first. Until this culture is changed and eroded I do not think Indonesian Second Home Program will get a full attraction to these wealthy Chinese. Let alone it is more expensive than the competing options elsewhere within the same region.
 
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Pantaiema,
You posted the outdated requirements to the MM2H program.
From the same website you posted:

New Rules 2021​

Monthly income required to qualify is increased from RM10,000 to RM40,000 a month (roughly US$9500 or £6800)
You need to show liquid assets amounting to RM1,500,000 in order to apply for the visa.
The fixed deposit requirement is increased to RM1,000,000 (roughly US$236,000; GB £170,000).
You must spend 90 days a year in Malaysia.
The minimum age is increased from 21 to 35. We assume that is only the principal applicant.
Government charges are increased dramatically. The annual visa fee will be RM500 up from RM90 and there will be a processing fee charged by immigration of RM5,000 for the principal applicants plus RM2,500 for each dependent.


The Indonesian program is a discount at almost half of the cost. Indonesia does not require you to make $10,000 USD per month to apply.

As people might be already aware of In Indonesia a foreigner cannot own property (e.g freehold), they could only have a leasehold.

1. This is generally not dissuasive for Chinese buyers. All property purchases in China are long term leases. It is almost identical to hak pakai.

2. You are wrong. Government Regulation No. 18 of 2021 gave foreigners the right freehold ownership of apartments.


the last country they would want to settle is Indonesia.

You missed my last sentence "will likely never step foot in Indonesia" and the changes in the MM2H law to spend at least 90 days in Malaysia. They copied Malaysia program very closely, even the name. They didn't copy the residency requirement. Most of the people that invest, never resettle. The country gets the investment, the Chinese citizen legally gets his/her money out of China into an investment (property) in his or her own name without him/her going to jail.

There is a massive value in that to upper middle class chinese, not the uber wealthy business tycoons you seem to keep refering too. People in the with a net wealth of a few hundred thousand USD vs. multimillionaires. It is the perfect investor for Indonesia. Traditionally Asian and not an overly sophisticated business tycoon. Right now the chinese stock market is tanking, the Chinese property market bubble is bursting (evergrande), and the yuan is devalueing. Chinese like to invest in property (96% home ownership). It is a real asset than can inflate, appreciate, and generate rental income. The program complies with Chinese currency protection laws.

not government owned statistics).

I understand the skepticism, but the MM2H is a government program of 2,000-4,000 applicant a year. Not a large enough population for outside statistical analysis. I have read the government released nationality breakdown of applicants and it has been 30-46% Chinese for that past few years.
 
I don't think the government officials had such deep thinking. They just wanted to swap the retirees to the new scheme and squeeze 2 billion from each of them to "successfully start the program".

Why not? They copied the Malaysia as a Second Home in most of it including the name. Why wouldn't they be thinking about targeting the same applicant poole?

The cynical side of me would ask the question, Who is more likely to give a kickback to the program director that implemented this? A bureaucrat at the banks that gets deposits or a large scale property developer hoping to sell high end apartments to foreigners? Property developers have more to gain financially from the change in this regulation than government bankers.
 
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Just remember how the Indonesian Chinese have been treated, discriminated in the past under the Suharto Regime.
Even until today it is still the culture of Indonesians people, politicians, even the most educated one to still consider that they are more entitled to live in Indonesia than Indonesian people with Chinese descendants.

I am well aware of the brutal history and current attitudes in Indonesia towards the Chinese. Yet...
  • They are the highest work permit applicants in Indonesia.
  • The second highest visitors to Indonesia.
  • The #1 most turned away nationality at the border for suspicions of illegal work and immigration.
  • The #1 most deported nationality for illegal work.
  • The largest source of foreign direct investment.
  • Indonesia's largest trading partner (25-30%).
It is hard to imagine a visa program that doesn't take China into consideration. Fear hasn't beaten out greed completely.
 
Why not? They copied the Malaysia as a Second Home in most of it including the name. Why wouldn't they be thinking about targeting the same applicant poole?

The cynical side of me would ask the question, Who is more likely to give a kickback to the program director that implemented this? A bureaucrat at the banks that gets deposits or a large scale property developer hoping to sell high end apartments to foreigners? Property developers have more to gain financially from the change in this regulation than government bankers.
Indonesia has worldwide taxation. Anybody with KITAS is a tax resident by default, and no rich person will risk being exposed to Indonesian taxation (double taxation treaties do not eliminate fully the Indonesian taxes). This is not the case in Malaysia, where foreign income is not taxable.

There is no property for foreigners in Indonesia. Developers do not have these buildings built with hak pakai status, and only new properties (still nonexistent) theoretically can be purchased. So the developer will not get any foreign customers unless the market is liberalized, which will not happen in our lifetime.
 
I am well aware of the brutal history and current attitudes in Indonesia towards the Chinese. Yet...
  • They are the highest work permit applicants in Indonesia.
  • The second highest visitors to Indonesia.
  • The #1 most turned away nationality at the border for suspicions of illegal work and immigration.
  • The #1 most deported nationality for illegal work.
  • The largest source of foreign direct investment.
  • Indonesia's largest trading partner (25-30%).
It is hard to imagine a visa program that doesn't take China into consideration. Fear hasn't beaten out greed completely.

China is the land of billion people. Majority of them are not rich. But even there are only a small in percentage, but converted into actual figures, compared to the size of population of other countries the number of wealthy people are a lot .

But regarding the second home program. Are they targeting the Chinese national who were working illegally, have been deported or instead the wealthy Chinese.
Also it is public knowledge that many Chinese escorts are working in entertainment industry around Jakarta such is in Kota Indah, Kings Cross Kelapa Gading, etc. Are these people the target of these second home program ?? Common sense rule, the Chinese national who have been deported, who worked illegally are certainly not the target of this second home scheme as they can not effort to pay the deposit needed anyway. Unless there is another huge incentive, the wealthy Chinese are more attracted to seek residence in the US, AU, CA or the EU ??.
When there are a reasonable number of Chinese people working for the Chinese companies Indonesia for Infrastructure funded by the Chinese government, it is entirely different things for them to be attracted to the Indonesian Second Home via depositing money of IDR2b.

Also in Europe there are some more attractive alternatives in the EU countries, called the golden visa through investing as low as EUR300,000. They have a better social security, benefit system, not necessarily freezing cold, offer a better international mobility when they decide to take citizenship in the later date.
These are reasonable number of Chinese people who could effort the deposit needed for second home program or golden Visa through investment in Europe.

123a.JPG

This is just the mainland China, we have not included Hong Kong, Taiwan, etc.
Also regarding the brutal history in Indonesia involving Chinese descendants. Keep in mind these Indonesian Chinese are not even immigrants they are Indonesian born and paying tax in Indonesia. Many of them are the third generation of Indonesian with Chinese descendant. Even until today it is still the culture of Indonesians people, politicians, even the most educated one to still consider that they are more entitled to live in Indonesia than these Indonesian with Chinese descendants. They even openly proclaiming it in public.
As an old saying "History Doesn't Repeat Itself, but It often Rhymes". In Indonesia this history is still very relevant to be taken into consideration for the wealthy Chinese who might consider this second home application in Indonesia. In Indonesia, while many Indonesian people still see the Indonesian with Chinese descendants are not entitled to live in Indonesia with the same right, even in fact they are the third generation born in Indonesia, but it is anomaly or similar nature that if people are Arabic descendants, they do not get call out
 
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2. You are wrong. Government Regulation No. 18 of 2021 gave foreigners the right freehold ownership of apartments.

Well, I have not scrutinised them in detail, But it seems to me the article you are referring to is using the term the Hak Pengelolaan / “HPL”, HGU, HGB, HP. It is not exactly like "the freehold" the term that other people in other countries know where you own the building together with the plot of land indefinitely. Freehold in property ownership is comparable to "hak milik" that Indonesian people enjoy. You do not only rent/own the Building / flat but you also own the land, the plot of lands below and surrounding the building structure.

I am spending a few minutes searching and I found this article. This might not be the most authoritative source but at least give the impression that the foreigners still does not have the same right in property ownership e.g "Hak Milik" like Indonesian people enjoy.

I know there are a lot of people in this forum have a good knowledge of these property ownership right might want to comment or to correct it.

Also the competing scheme in the same region in term of cost, they are not just in Malaysia, there are also Thailand, Philippines, etc.
 
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a lot of social media scorn

That's not what I'm seeing online. Seems a lot of higher end digital nomads think this is a good deal (they haven't read it of course).

So just to be clear because I also haven't read it...does it allow remote work? Is there any taxes?
 

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