Finance and Investment

-Bali-

"Pelan-pelan" - (SLOWLY, SLOWLY)

Bali expat guide to banking, investment, and legal income generation Finance options for expats in Bali covering currency exchange and local businesses

Banking and Money Management

Setting Up Bank Accounts:
Expats in Bali can open a local bank account at major Indonesian banks such as Bank Central Asia (BCA), Mandiri, or BNI. To open an account, expats will typically need:

  • A valid passport.

  • KITAS/KITAP (residency permits for expats).

  • Proof of local address (rental agreement or utility bill).

Accessing Financial Services:
Expats in Bali can access various financial services, including:

  • Online banking and mobile banking apps for managing accounts and bill payments.

  • International transfers through SWIFT, with fees depending on the bank.

  • ATMs are widely available, but withdrawal fees for foreign cards can be high.

Currency Exchange and Fee Management:
To manage currency exchange and avoid high fees:

  • Use licensed currency exchange services or major banks for better rates than informal exchange shops.

  • Consider opening a multi-currency account if you deal frequently with foreign currencies.

  • Use ATMs from your bank’s network to avoid excessive withdrawal fees and foreign transaction costs.

For more detailed guidance on banking and financial management in Bali, [click here].

Investing in Local Markets

Real Estate Investment:
Foreigners cannot own land in Bali directly, but they can invest in real estate through long-term leases (Hak Sewa) or by setting up an Indonesian company (PT PMA) that can own property. Popular investment options include villas, commercial properties, and vacation rentals, which offer strong potential for rental income.

  • Foreigners can lease land for up to 80 years through initial contracts of 25-30 years, with options for renewal.

Stocks and Businesses:
Foreigners can invest in the Indonesian Stock Exchange (IDX) via local brokers, with opportunities in sectors like banking, telecommunications, and consumer goods. Foreigners can also start businesses in Bali through a PT PMA, which allows for up to 100% foreign ownership in certain sectors, though restrictions apply in protected industries like media and education.

Foreign Ownership Restrictions:

  • Foreigners cannot own land directly in Bali but can own buildings through long-term leases.

  • Certain industries limit foreign ownership to protect local businesses, such as retail, agriculture, and small-scale enterprises. Setting up a PT PMA allows for foreign ownership with government approval for specific industries.

Local Investment Opportunities and Returns:
There are growing investment opportunities in Bali, especially in tourism, hospitality, eco-friendly developments, and sustainable agriculture. Real estate investments, particularly in luxury villas and vacation rentals, offer attractive rental yields of up to 8-12% annually in popular areas.

For detailed investment strategies and legal considerations for investing in Bali, [click here].

Income Opportunities

Generating Income Legally:
Expats can generate income in Bali through remote work, freelancing, or by setting up local businesses. It’s essential to follow local regulations, including having the correct visa and work permits to work legally.

Remote Work and Freelancing:
Bali is a popular destination for digital nomads and remote workers due to its affordable lifestyle and thriving expat community. Expats often work remotely for foreign companies in fields like IT, design, marketing, and consulting.

  • Working remotely on a tourist visa is technically not allowed if the work is for local clients, but many expats work for foreign clients while in Bali.

  • Platforms like Upwork and Freelancer are popular options for expats looking to offer services globally while based in Bali.

Setting Up Local Businesses:
Starting a business in Bali is an option for expats, particularly in the tourism and hospitality sectors. To legally own a business, expats can set up a PT PMA (Foreign Investment Company), which allows for foreign ownership in certain industries.

  • Key business opportunities include opening restaurants, guesthouses, or eco-tourism ventures.

  • A local sponsor or business partner may be needed, depending on the type of business.

Legal and Tax Implications:

  • Expats must obtain a business visa or work permit to legally work or run a business in Bali.

  • Income is subject to Indonesian tax laws, with tax rates ranging from 5% to 35% depending on income. Foreign income earned while residing in Bali may also be taxed if not covered under double taxation agreements.

For a complete guide on legal income generation and tax strategies in Bali, [click here].