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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
As an expat, leaving Bali includes more than buying a flight ticket and notifying your landlord. However, if you plan to ever return (and most likely you will), not wrapping things up correctly can cause issues in the future.
For instance, if you have not canceled your temporary stay permit (KITAS) when returning to Indonesia, the immigration may refuse your future entrances to Indonesia.
That is just one example of not canceling your KITAS. This article will cover the four things expats need to do before leaving Bali.
#1 Close your company or temporarily suspend its activities
Suppose you have previously registered a company. And, now you want to leave the company and Bali behind.
Closing your company for good before you leave Bali
Assuming you want to end your company’s business activities, the company’s legal status is not automatically terminated. All of your company licenses must be revoked to liquidate the company.
The company licenses include the articles of association, ministry of the law and human rights approval, company tax, and its operational licenses.
Suspending your company’s activities temporarily before you leave Bali
Assuming you leave behind your company in Bali for a year or two, you must ensure that its dormant status has been taken care of.
Taking care of the dormant status involves de-registering all the employees and ensuring that the company has a resident director. It can be a foreigner with a valid KITAS or an Indonesian.
Also, you must do annual tax reporting and employment tax reporting by December of the running calendar year. And quarterly investment reporting.
Issues for not liquidating your company or temporarily suspending company activities in Bali
The officials will pursue you for not complying
If you leave your company in Bali with no activities, you must still take care of compliance.
Namely, you need to file a zero investment activity report (LPKM). Foreign-owned companies (PT PMA) must file LPKM quarterly, whereas local companies must file it twice a year.
Besides LPKM, you must also file zero tax reports. The Indonesian tax office will send out reminders to do so.
As the company director is accountable for reporting and ensuring the company’s compliance, the tax office and Investment Coordinating Board (BKPM) can find the director for the reports if not filed.
You will get a tax audit and a late reporting penalty
If you forget to file for the zero reports, there is a risk that the company will get a tax or an investment audit. The Indonesian tax office and BKPM have the right to audit and give late reporting penalties.
Your company will eventually file the zero tax reports and pay the late reporting penalties. The late reporting penalty for the company’s annual report is IDR 1.000.000 per year plus late reporting and payment (if applicable) interest.
Immigration will consider you as an illegal worker
If you are the director or commissioner in an inactive company with no KITAS anymore, you can get in trouble with immigration.
For instance, if you are returning to Indonesia but have forgotten that you are in the company’s documents. Immigration can say that you are working illegally.
It is since you are physically in Bali and listed in a company’s documents with no KITAS. You should always have a KITAS when you are the director or commissioner in a company, regardless of whether it is operating or not.
You will lose legal rights of company assets
To illustrate, if your company’s licenses are longer valid, your company will not have legal rights to hold the land under the company’s name.
Only companies with valid licenses can legally own the right to build (HGB) certificates. You will have one year to update and validate your company’s licenses, or you are obliged to transfer or sell the land.
More issues can arise when the HGB certificate needs to be renewed, or you want to sell the land. If the company has been dormant for several years and shareholders or board members have vanished, it can become an impossible task to do.
#2 Cancel your KITAS and remove yourself from the company’s documents as director or commissioner
Even if your KITAS has expired, you will still need to cancel KITAS before you leave Bali. But, it is possible to cancel your KITAS after leaving Indonesia if you are not planning to return.
If you have resigned from a director or commissioner position in a company, you must make sure you are no longer on the company’s documents. You can check that independently by ordering the company profile.
It is beneficial if the company has not provided you with the documents proving that you have been removed from the director or commissioner position from the company documents.
Otherwise, immigration can consider you as an illegal worker when returning with a visit visa. The official consequence for that is IDR 500 million fine or five years of imprisonment.
Getting sponsored for investor KITAS without a company registration
There are agents who sell investor KITAS in Bali with no company registration required. However, it is not possible to get an investor KITAS without being a shareholder in a company.
You will be able to get a visa. But, they will place you as a shareholder in a random company with strangers. Getting an investor KITAS is perfectly fine when you have your own company.
Risk of getting an investor KITAS without registering your own company
If you don’t have your own company, it can be a dangerous practice which we do not recommend. It is so because it is hard to cancel KITAS and remove yourself from company documents when you don’t know other people involved in the company.
Moreover, agents often appoint the shareholders as a director or commissioner to qualify for lower capital requirements compared to just being a shareholder. As a director, you will be liable for all of the company’s activities even without your actual involvement.
For instance, when you only buy an investor KITAS, you most probably don’t have any idea about the activities and operations of the company. Nonetheless, you will still be responsible for that.
#3 Revoke your personal NPWP and BPJS before you leave Bali
If you have had KITAS, presumably, you also have an Indonesian tax card (NPWP). And possibly Indonesian issuance and social security (BPJS). You must revoke both cards before leaving Bali.
Revoking your tax card
If you don’t revoke your NPWP, you will still be considered as an Indonesian tax resident. It means you must still report and pay your taxes to Indonesia.
When revoking the NPWP, the Indonesian tax office will check that all your personal annual tax reports have been filled. If you have not done that, you must file the reports retroactively and pay late reporting fines.
If it comes up ten years later after you have forgotten to revoke it, there will be a lot of retroactive reporting and late reporting fees to pay. Currently, the late reporting penalty for personal annual reports is IDR 500.000 per year plus interest.
Revoking your insurance and social security
If you have canceled your KITAS when revoking your BPJS, you can claim the retirement money that the company has paid on your behalf during the validity of your KITAS as the BPJS contribution.
#4 Make your Indonesian bank account accessible online before you leave Bali
If you still plan on accessing your Indonesian bank account even though you are abroad, make sure that it can be easily accessible.
You will need to do this before leaving Bali, as many Indonesian banks will still need you to meet their customer service in the bank or go to their ATMs to register. Also, banks will require your Indonesian cellular number for authentication when registering.
Make sure that you register for online banking instead of mobile banking. Mobile banking will still need your cellular number for doing transactions.
It can be an issue if you will not be able to use your Indonesian cellular number abroad.
Planning your transactions
There are many limitations for international transfers in Indonesia. If you have a lot of funds in Indonesia, consider planning ahead to transfer all your needed funds before leaving Bali.
Do you have any inquiries about leaving Bali as an expat? Don’t hesitate to reach out to our professional consultants for answers by filling out the form below. Or, email us at bali@emerhub.com.
