Top Mistakes of Expats in Indonesia and How to Avoid Them

More people are now leaving their home countries and settling down not just in Bali, but all across Indonesia, either getting married to an Indonesian or starting a business in Indonesia.

While expats can enjoy the steady business income in this emerging market and marvel at the views and scenery that Indonesia offers, leaving their countries and setting in Indonesia is still one of the most challenging decisions to make in life.

Here at Cekindo Business Center, we will tell you the top mistakes of expats in indonesia make when they first move here.

  1. Wrong Visa in Indonesia

If you are interested in getting a job in Indonesia, it is crucial for you to obtain a work permit – the only way for you to work legally in Indonesia. Bear in mind that a work permit is not the same as a business visa, and don’t even try to work on other types of visa just because an employer offers you a job.

On top of that, immigration law is particularly strict in Bali. In Bali, due to the rapid growth of both legal and illegal tourists and expats, a special immigration force is in place to take the illegals out. So, don’t risk it and get the right visa!

  1. Not Aware of Visa’s Validity in Indonesia

As an expat, you should always be highly alert and check the expiration date of your visa. It seems like an easy task but most expats tend to overlook, resulting in overstaying in Indonesia.

There is no mercy for anyone who overstays in Indonesia, and the sanctions are heavy fine and imprisonment. You might be even deported afterwards without being able to come back to Indonesia again.

  1. Lack of Preparation for Indonesian Paperwork

Most expats had learned the hard way that it is expensive and cumbersome to get all the required paperwork done, when they arrived in Indonesia empty-handed, unprepared without proper research.

We also can’t emphasize enough that it’s vital to have all your original documents with you to prove your legal status in Indonesia, such as company sponsorship documents. Besides, you should at least have three photocopies of the original document in the events of missing documents.

  1. No Tax ID and Tax Filing Error

Taxes and tax filing in a foreign country can become quite a pain for expats. In Indonesia, according to its Income Tax Law, a foreigner residing and working in Indonesia with a taxable income needs to apply for tax ID (NPWP) and file their tax on time.

Expats tend to forget to register for tax IDs and report their tax when they have not been in Indonesia for very long. This often leads to an interest penalty of 2% per month on late payments, and a whopping 48% at the highest penalty bracket!

Remember to get a tax ID immediately after you receive the work and stay permit (KITAS) and hire a professional to help you with the tax filing to prevent any errors and delay.

  1. No Registered Office

A domicile letter, a letter to state the location of your office, is compulsory for registering and setting up a company in Indonesia. This also means that you need to have a legit physical office location for PT PMA registration.

Many expats thought that they would be able to register a company and perform all the business transactions online anywhere in the world. You can definitely do that, but law is law and you have an option to obtain an office address with Cekindo Business Center’s virtual office or co-working office solutions.

Facing all the common mistakes that we have just listed as an expat? Cekindo Business Center welcomes all your questions and feedback. Talk to us now.

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