What is the Golden Visa?
The Golden Visa is the newest policy scheme of Residency by Investment and/or Citizenship by Investment introduced by the government of Indonesia. It is basically, the agglomeration of Limited Stay Visa, Limited Stay Permit, Permanent Stay Permit, and Permit to Return for a certain period of time. It provides the holder facility-priority benefits as well as a determined longer stay period of 5-10 years. Hence, it has been marketed as a more advantageous visa option for foreigners who are willing to invest in either Indonesian government bonds, public company shares or place savings/deposits in Indonesia. A full article regarding the Golden visa can be read here.
The scheme itself has been established and introduced in two of Indonesian Ministerial regulations, namely: Peraturan Menteri Hukum dan HAM (“Regulation of the Ministry of Law and Human Rights”) 22/2023 as well as Peraturan Menteri Keuangan (“Regulation of the Ministry of Finance”) 82/2023 on August 30th 2023.
What has been regulated so far?
Factually, the existing regulations regarding the Golden Visa haven’t yet been implemented. It has been regulated for the general structure and implementation process that’s supposed to occur in 6 months (counting from the date of its application in September 2023). The existing regulations, namely: the framework of the Golden Visa scheme located in Regulation 22/2023 of the Ministry of Law and Human Rights and non-governmental tax tariff for the application of the Golden Visa located in Regulation 82/2023 of the Ministry of Finance of Indonesia.
As it is, there is no regulation specifically discussing the implementation of the visa itself to this date (17th November 2023). Causing many speculations to run rampant and not enough legal basis to back it up. In this article, we will be trying to accumulate and provide updates on the issues.
The Concerns: The Golden Visa has no implementing regulation with the status of ‘Law’
Referencing to an article published by the Indonesia’s immigration website, the president of Indonesia, Joko Widodo has mandated the Directorate General of Immigration, Silmy Karim to coordinate with relevant ministries for the creation of necessary regulations of the Golden Visa. To this date, regulations concerning the Golden Visa exist in two separate legal instruments: Permenkumham 22/2023 and Permenkeu 82/2023. As it stands, these instruments do not hold the status of Law (Undang-Undang) which in accordance with existing law and practice should hold more competence in Indonesia’s hierarchy of regulations if compared to the mentioned instruments above. This means that the legislative process of the Golden Visa has skipped altogether the needed Law as a basis for its implementation (‘absence of law’).
According to the ‘General Theory of Norm’ by Hans Kelsen, the legal system of a state consists of tiers and layers, where a lower norm is applied, sourced, and based from a higher norm. The same theory is also applied in Indonesia’s legal structure as can be seen in Article 7 and 8 of Law Number 12 of 2011 on ‘Establishment of Laws and Regulation. There are mainly seven types of regulations recognized in the legislative hierarchical structure of Indonesia, namely: The 1945 Constitution of Indonesia (UUD 1945), People Consultative Assembly’s Resolution (Ketetapan MPR), Law (Undang-Undang) or Governmental Regulation in Lieu of Law (Perpu), Governmental Regulation (Peraturan Pemerintah), Presidential Regulation (Peraturan Presiden), Provincial Regulation (Peraturan Daerah Provinsi), and Regency/Municipal Regulation (Peraturan Daerah Kabupaten/Kota). Additional to such instruments, Article 8 (1) of the same law also mentions of the existence of other regulations legislated by certain authorities that are recognized and posses legal power when either of these two requirements are fulfilled, that is whether the establishment of a regulation is: ‘ordered by a higher regulation’, or ‘ordered by competent authorities’.
In the present case, the legislation for Golden Visa has been mandated by the president through a meeting with his cabinet of ministers back on 29th May 2023. Moreover, in accordance with Regulation of the Government In Lieu of Law Number 2 of 2022 on Job Creation (“Omnibus Law”), the concept of the Golden Visa has been mentioned and ordered by several of the articles.
What is the purpose of the ‘Omnibus Law’?
According to Article 1 (1) of the Omnibus law, “Job Creation is an effort of job creation through ease, protection and empowerment efforts for micro-, small- and medium-scale businesses, improvement of investment ecosystems and ease of doing business, and Central Government’s investment and acceleration of nationally strategic projects.” The law itself amends several provisions contained in Law Number 6 of 2011 on ‘Immigration’ (“Law 6/2011”), these amended articles include: 1, 38, 39, 40, 46, 54, 63, 71.
Some changes regarding certain immigration subjects
Article 38
“Visitor visa shall be granted to Foreign Citizens who will travel to Indonesian Territory in the context of government duty, education, socio-cultural, tourism, pre-investment, business, family, journalism visits or a stopover to continue their journey to another country.”
Where previously the visitor visa only provided for the purpose of ‘business’, the newest regulation further adds ‘pre-investment’ as another reason for entry able to gain Visitor Visa.
Article 46
(4) In the event that the Foreign Citizen as referred to in paragraph (2) obtains a Limited-Stay Permit at an Immigration Checkpoint, there is no need to submit an application to the head of an Immigration Office to obtain a Limited-Stay Permit
The newest regulation provides for an additional provision where it allows a Foreign Citizen holding a Limited-Stay Permit obtained at an Immigration Checkpoint to no longer need to submit an application to the head of an Immigration Office for obtaining such permit. This can be speculated to be a complementary provision for the facility and institutional benefits that are contained in the Golden Visa regulation.
Article 54
(1) Permanent Stay Permit can be granted to:
- Foreign citizens holding a limited-stay permit as spiritualist, workers, investors, and second homes;
- Family due to mixed marriage;
- Husbands, wives, and/or children of Foreign Citizens holding a permanent stay permit; and
- Foreign citizen ex-Indonesian citizen and ex-child subject to the dual citizenship of the Republic of Indonesia
(4) Further provisions regarding Permanent Stay Permits as referred to in paragraph (1) shall be regulated under a Regulation of the Government
The late regulation of Law 6/2011 mentions that a Permanent-Stay Permit can be granted to the ‘elderly’ whereas the news regulation replace such provision to ‘second homes’ purposes, and provides for additional instruction that regulations regarding that first paragraph to be regulated in a Regulation of the Government (Regulation of the Ministry of Law and Human Rights Number 22 of 2023 on Visa and Residency Permit).
Article 64
(4) Provisions regarding guarantee does not apply to:
-
- Foreign citizens legally married to Indonesian citizens;
- Businesses with Foreign Citizenship investing capital as their investment in Indonesia as referred to in the provisions of laws and regulations regarding investment; and
- Citizens of a country that reciprocally provide insurance exemption
(6) Business Actors with Foreign Citizenship as referred to in paragraph (4) letter b shall deposit an immigration collateral as a substitute for the guarantor while in the Indonesian Territory.
(7) Further provisions regarding immigration guarantee procedures for Foreign Citizens shall be regulated under a Regulation of the Government
In Addition to Foreign Citizens that are legally married to Indonesian citizens, the newest regulation regulate for Businesses with Foreign Citizenship investing capital as the investment, and Citizens of a country that reciprocally provide insurance exemption is precluded to have a guarantee. It also provides further instructions for the plot of payment, as well as instruction for further regulations to be regulated in a Regulation of the Government.
Conclusion
As such, the Golden Visa has fulfilled the requirements needed for a recognized and possessing legal power regulation. The enactment was ordered by competent authorities (throiugh the mandate of the president of Indonesia towards the relevant ministry, in this case the Ministry of Law and Human Rights and the Ministry of Finance of Indonesia to fulfill and prepare the regulations needed for the enactment of the Golden Visa.
Source
Laws and Regulation
- Law Number 6 of 2011 on Immigration
- Law Number 12 of 2011 on Establishment of Laws and Regulation
- Government Regulation In Lieu of Law Number 2 of 2022 on Job Creation
- Regulation of the Ministry of Law and Human Rights Number 22 of 2023 on Visa and Residency Permit
- Regulation of the Ministry of Finance Number 82 of 2023
Jurisprudence
- Perkara Nomor 116/PUU-XX/2022 Mengenai Pengujian Materil Undang-Undang Nomor 12 Tahun 2011 tentang Pembentukan Peraturan Perundang-Undangan, https://www.mkri.id/public/filepermohonan/Permohonan%20diRegistrasi_3199_2592_
Permohonan%20Registrasi%20116%20PUU%20XX%202022.pdf; Putusan MK Nomor 116/PUU-XX/2022, https://www.mkri.id/public/content/persidangan/putusan/putusan_mkri_8845_1675141737.pdf
Publication
- General Theory of Norm, Hans Kelsen, New York : Oxford Univesity Press, 1991
- Maria Farida, Ilmu Perundang-Undangan Dasar-Dasar dan Pembentukannya, Yogyakarta: Kanikus, 2006
Media
- Golden Visa: Keuntungan, Kerugian, dan Kemungkinan Penerapannya di Indonesia’, 2 April 2023, Lusia Novita Sari, https://setkab.go.id/golden-visa-keuntungan-kerugian-dan-kemungkinan-penerapannya-di-indonesia/
- La Vida Golden Visas, https://www.goldenvisas.com/
- ‘Jokowi Minta Aturan Golden Visa Selesai Juni Ini’ , June 12 2023, https://news.detik.com/berita/d-6769011/jokowi-minta-aturan-golden-visa-bagi-wna-selesai-juni-ini
‘Aturan Hukum Golden Visa Disahkan, Tarik Investor Asing Berkualitas Untuk Investasi’, September 2 2023, https://www.imigrasi.go.id/id/2023/09/02/aturan-hukum-golden-visa-disahkan-tarik-orang-asing-berkualitas-untuk-berinvestasi/
