Locals Worry New Second Home Visa In Bali Will Lead To Overdevelopment

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It has been just a week since Indonesia announced the impending launch of the second home visa. The visa entitles those with over $130,000 in the bank to apply for a 5 or 10-year temporary residency. Yet there are already concerns being raised by local people in Bali and by government ministers that the new visa category will lead to an ‘invasion’ of investment leading to an over-saturation of the market. 

The concerns have been quashed by Minister of Law and Human Rights of the Republic of Indonesia Yasonnah Laoly, who denied the suggestion that there would be an ‘invasion’ of newcomers to areas like Bali.

There are fears from local people that the new visa will allow people to come, invest, overdevelop and leave when the market has become too busy, whether that be the property market, the hospitality industry, or any other business. 

Laoly told reporters at the opening of the Synergy and Collaboration for Optimizing Intellectual Property Ecosystem conference in Kuta on Monday 31st October, that the influx of forging investment, especially from China, won’t be an issue. He said, ‘there are critics saying, well we’ll be raided later by China and others. Malaysia was already ahead of us, the name was silver hair visa, it wasn’t invaded. We have Bali, we have other areas because they have to invest here’. 

The second home visa, along with the implementation of the Omnibus Law in 2020, now makes it easier than ever for investors, businesses, and entrepreneurs to establish a presence in Bali. The policy was considered contentious by some as it removed much of the legislation to protect Indonesian interests when it comes to buying and selling land. The policy allows foreigners to buy both land and apartments and gives them permanent ownership and the right to resell. 

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There are hopes that the new second home visa will attract a wide range of people, not simply business developers and investment tycoons. The visa is available to anyone who can show proof of funds in their bank account of USD 130,000.

The Department of Immigration has stated that this will help diversify the range of people who can come and reside in Indonesia. The visa targets high earners, retirees, and highly skilled digital nomads to invest in building a life in Indonesia. 

Laoly was steadfast that the new visa category would help increase economic growth and employment opportunities across Indonesia. He said, ‘Yesterday there were several expert doctors, Indonesian citizens who have retired from America and bought a house here, of course [buying] an apartment, of course, he needs a driver, he needs a helper’.

Yet, many people in Indonesia are concerned that the role of ‘helper’ is not the type of job opportunity that should be prioritized by the government as it looks to create new jobs. 

Many people in Indonesia, especially those with strong academic backgrounds, wish to pursue roles with a greater scope for growth and development. While the second home visa will undoubtedly create jobs in the service industries, some argue that it is condescending to the Indonesian workforce.

They argue that in a post-pandemic world, there needs to be new jobs that are not directly linked to the servitude of foreigners, as is so commonly the case in Bali. Though many in Bali are happy and grateful to be able to work in tourism, others wish to have more career choices.

Laoly further defended the second home visa as an opportunity for those who have forfeited their Indonesian citizenship in favor of stronger international passports due to work, family, or relationships and those who were born into the Indonesian diaspora. He stated that the second home visa is a way for this community to rekindle a relationship with their familial country. Though the $130,000 may be limiting for many. 

In Minister Laoly’s eyes ‘if diaspora residents retire and become Indonesian citizens, they cannot get social security. So with a second home visa, they can come to Indonesia and buy an apartment house and can stay in Indonesia for 5 or 10 years’. 

While the announcement of the second home visa was generally well received, it seems clear that the concerns around the future of the economic and physical landscape of Bali will be heavily impacted by the decision. Whether the second home visa and the omnibus law have a positive effect in the long run remains to be seen, both decisions certainly align with the government’s growth plan.