Working from Indonesia as a Germany resident

At a glance

Rule coverage

What the rules say about Indonesia

The rules below are the ones most likely to shape a stay in Indonesia, in plain words and with the source behind each one. Your own report tells you which of them apply to you.

1. Significant issueImmigration and visa

   Stays past 180 days require a residence permit (KITAS)

   Visit routes are exhausted at 180 days. Staying longer needs a limited-stay permit - for remote workers that is the E33G Remote Worker KITAS. Overstaying instead costs IDR 1,000,000 per day (PP 28/2019), and past 60 days of overstay means detention, deportation and a re-entry ban.

2. Significant issuePermanent establishment risk

   Contract authority or management from Indonesia creates real PE risk

   Habitually concluding contracts or exercising management functions from Indonesia is what dependent-agent and management PE doctrines target (UU PPh Pasal 2(5)). A deemed BUT is taxed like a resident company: 22% corporate income tax plus 20% branch profits tax, and it becomes a withholding agent for payroll. One favourable point for the Netherlands specifically: the MLI's widened agency test (Article 12, the 'principal role leading to conclusion of contracts' standard) was not applied to the Netherlands-Indonesia treaty, so the agency PE test here stays at the narrower, pre-BEPS standard - actually concluding contracts in the enterprise's name, or habitually filling orders from a maintained stock. An employee who negotiates but does not sign in the employer's name sits outside this article in this corridor, where in many other corridors they would not.

3. Significant issueTax residency

   Past 183 days you become an Indonesian tax resident

   More than 183 days of presence in any rolling 12-month period - continuous or broken, and any part of a day counts as a whole day under PMK 18/2021 Pasal 2(3) - makes you an Indonesian tax resident (SPDN): worldwide income taxed at progressive rates of 5-35%, NPWP registration and an annual tax return (SPT). The window is not the calendar year - it slides with your travel pattern, so a stay split across a New Year does not reset the count. Immigration and tax data are now synced (PER-23/PJ/2025), so long stays are visible to the tax office. The 'no tax on foreign income' marketing around nomad visas does not survive contact with the law - the 4-year foreign-income exemption is for qualifying skilled positions with a DGT application, not remote workers, and even where granted it does not shelter Indonesian-performed work paid abroad (PMK 18/2021 Pasal 7(3)).

4. Significant issueRight to work

   Local business activity without a work permit is a criminal offense

   Working for Indonesian clients or performing local business activity without a work KITAS violates Article 122 of the Immigration Law (UU 6/2011): up to 5 years imprisonment and fines up to IDR 500,000,000, with sponsor liability. In practice most cases end in detention, deportation and a re-entry ban. The E33G explicitly excludes local clients and Indonesian-source income.

5. Significant issueLocal registrations

   Nominee land arrangements are void from the outset, and now criminalised in Bali

   Articles 21 and 26(2) of the Basic Agrarian Law (UUPA, UU 5/1960) prohibit direct or indirect transfer of hak milik (freehold) to a foreign national. A nominee arrangement, where an Indonesian national holds freehold title on a foreigner's behalf, conflicts with this and is batal demi hukum, void from the outset with no court cancellation required, and the land reverts to the state - the price paid is not recovered through the title system. In Bali specifically, Perda Provinsi Bali No. 4 Tahun 2026, signed 24 February 2026, adds a criminal dimension: Pasal 14 prohibits anyone from acting as intermediary or facilitator enabling a foreign national to control land by nominee, with sanctions extending to civil servants who assist. Lawful alternatives exist: hak pakai (right to use) for a foreign individual with a valid stay permit, hak guna bangunan held by a PT PMA, strata title in qualifying apartment buildings, and long leases (hak sewa).

6. Significant issueMoving your company

   CFC rules catch a founder who leaves a foreign holding company behind

   A foreign entity becomes a controlled foreign company where it is at least 50 percent owned by one Indonesian taxpayer, or 50 percent collectively by Indonesian taxpayers, measured at the end of the Indonesian taxpayer's fiscal year on paid-up capital or voting-right capital. Deemed-dividend income attributed to you covers dividends, interest, rentals, royalties and gains on sale or transfer of assets, and the same test extends to indirectly owned CFCs. The one exception is shares listed on a recognised stock exchange. This is exactly the trap for a founder who relocates to Indonesia and leaves a wholly-owned foreign holding company running as before. Separately, foreign-source income including PE income and active business income from abroad may be exempt where reinvested or used for business in Indonesia within a set period, though that period is not stated.

What tends to surprise people here

• Frequent visa policy changes
• Working on tourist entry
• 183-day tax residency

Tax treaty between Germany and Indonesia