With Brian Greco
With an eye to the changing world order, Brian Greco explores how individuals can get and keep global access.
The Golden Visa landscape is experiencing a major void period in its ever-volatile product market: Programs have been closing for what seems like forever, or at least becoming way less inviting and more restrictive. It feels like ages since a legendary investment program has opened in the category of what I would call “places to actually live”—that is, residencies that are not simply for paper use cases but for actual second homes or home bases for the world’s rich and mass-affluent.
Southeast Asia is a region that has consistently attracted inbound foreign money not only for hard investment returns for frontier market speculators but more importantly for its attractive lifestyle proposition. The region is renowned for its solid price-value ratio, warm climate, top-notch hospitality, and overall welcoming multicultural setting.
Sustained interest in Southeast Asian tourism has kept these countries as receivers of large quantities of FDI despite not always having the most investor-friendly business environments. Whether due to restrictions on foreign ownership, land use, capital controls, or other strange protectionist policies and mobility restrictions, the region generated a de-facto reliance on low-level visa paper-pushing (Vietnam), business visas-as-residency (Cambodia), social visit visas-as-residency (I’m looking at you, Bali), or outright visa runs (the old Hong Kong–Macau ferry run or even the flexibility of Malaysian immigration pre-covid).
Many in this space have been living and investing between the lines in these markets because the destination was compelling enough for them. Periodic ad-hoc property ownership schemes or locally-sponsored company activities were often enough for the digital nomad crowd or globally mobile elite to establish their landing pad in Southeast Asia.
Southeast Asian Long-Stay Visa Comparison Chart
Over time, a more formally codified suite of residence by investment products came into being in the region. See the above table for a summary of current offerings.
Malaysia’s MM2H was a crowd favorite for many years—the world’s most applied-to Golden Visa until 2019, a fact unbeknownst to many eurocentric analysts. It offered the ideal stimulus for a Malaysian property market rich in newly-built stock and linked that value proposition to a near-first-world lifestyle and pro-business urban environment for investors.
But as is often the case in the world of RCBI, all good things come to an end—usually by abrupt and indefinite suspensions that are later followed by dreadful program restructuring and “relaunch” efforts. Almost without fail, these changes are poorly conceived by consultants and other government influencers who establish arbitrarily high requirements that flagrantly ignore what the private sector investor is looking for.
For example, the MM2H program’s uncompetitive redesign in 2021 with its ridiculous thresholds and minimums could safely be assumed to signal a drive toward a mass exodus of foreigners. Whether or not that attitude was “intentional” remains up for discussion.
A beautiful loophole in the federative governmental system of Malaysia permitted grounds for Sarawak and Sabah, two states on Malaysian Borneo responsible for their own immigration affairs but still part of Malaysia, to open their own customized versions of MM2H with lower thresholds. Asking nearly 80% lower minimum bank and income thresholds and only 30 days per year of physical presence, the Sarawak-specific MM2H program unsurprisingly saw a 2800% increase in approvals. Sabah’s program enjoyed similar interest.
It’s almost as if making a program more attractive results in more investment.
Then there’s Malaysia’s Premium Visa Program (PViP), announced in late 2022, which attempted to provide an additional pathway into Malaysia in the wake of MM2H’s discombobulation. The program’s announcement raised eyebrows but remains open and attractive to a certain subset primarily of East and South Asian rich looking for an actual live-in program for the country.
Thailand’s Elite Visa (essentially a glorified and overpriced renewable tourist visa for a country with zero chance at citizenship or permanent status) and the Philippines’ relatively affordable investment and retirement residency programs can be discussed at a later point, but also provide context to Southeast Asia’s ecosystem of RCBI vehicles.
So, what about Indonesia?
But today we are not here to discuss Malaysia but, rather, its larger neighbor, Indonesia. I want to give a proper framework of why I think the country is worth noting before going into the details of its recent Golden Visa program announcement.
Indonesia has a lot going for it. The country has the world’s fourth-largest population: Some 275 million people. It is also the world’s largest Muslim-majority country, representing major soft power connectivity into a global Muslim population of over 1.8 billion people and significant regional distribution across Africa, the Middle East, and South Asia.
The country has one of the world’s true up-and-coming middle-class consumer bases with enviable potential to solidify itself as a non-aligned superpower with major economic prowess. After all, Indonesia is already the world’s 7th largest economy by GDP (PPP) and on track to enter the global top 5 this century.
Its economy shows consistent resilience, often exceeding 5% YoY GDP growth and withstanding many of the shocks that COVID-19 and the 2022 geopolitical conflict wrought on more sensitive economies.
Reforms have been moving in the right direction: Indonesia’s property market opened to the foreign buyer in a bigger way earlier this summer, allowing the expansion of property ownership to non-resident foreigners with relatively manageable minimum thresholds in a market where, previously, foreign ownership was focused more on select touristic development projects or large-scale corporate holdings.
Indonesia’s tourism continues to grow with a recent target of 7 million international arrivals and the sector has enjoyed an excellent rebound post-COVID with ongoing crowd favorites including Bali, Yogyakarta, and many other destinations across its 6,000+ inhabited islands.
I have long admired Indonesia for its pragmatic and extensive visa-free policy framework which had achieved a visa-free status for nationals of over 150 countries countries by the end of 2015, a year of rapid internationalization and liberalization for Indonesia that can arguably be earmarked as the day the country opened its doors to the world.
Greater Jakarta is the world’s second-largest urban agglomeration after Tokyo, and it keeps growing. Previously nicknamed the “Big Durian” for its notorious noxious odor and endless traffic, it is one of the world’s “most improved” in the category of transport due to priorities to ease congestion and enhance infrastructure, including the launch of its brand new metro system in 2019. Many areas of the city aesthetically rival the first-world status of nearby Singapore, and at scale.
I expect Indonesia to continue to blossom with the construction of its new capital Nusantara and with the investment into new airports. Most importantly, Indonesia has shown stamina in resisting excessive external control in the new Cold War, siding neither exclusively with the US-EU-Nato bloc nor entirely with the Sino-Russian entente—a future-proofed investor’s dream.
How the new Golden Visa program works
So, what is the news for the RCBI industry? Well, just this week, Indonesia finally officially announced its Golden Visa program, and all the news in Asia is covering it. Here’s how it works:
- For a five-year visa (yes, only five years), an investment of USD $350,000 into shares of public companies, savings or deposit accounts, or government bonds will qualify you. USD $700,000 in investment grants you ten years.
- Alternatively, you can set up a company with US$2.5 million to get your five years, or (get this amazing bulk deal math) US$5 million for ten years.
- Corporate incentives are established for directors of firms establishing themselves in the country: US$25 million for five years, or US$50 million for ten years.
Indonesia Director General of Immigration Silmy Karim was quoted saying, “because we are targeting quality investors, the requirements are more thorough.”
But herein lies the fallacy.
What’s wrong with Indonesia’s new golden visa?
Instead of just laughing hysterically and closing the news article, I will take a few minutes to explain why this is a horrible “incentive” to attract your quality investors, dear Indonesian Government.
The big three reasons boil down to:
- too expensive
- not permanent
- not uniquely necessary.
Let’s explore each of the three.
- Too expensive
The program is just too expensive. Let’s first be clear about what we are getting for the money: Five-year residency. Not permanent (we’ll get there), and not citizenship, since Indonesia is not a citizenship country—and anyone who tells you otherwise is lying. Indonesia has an extremely restrictive citizenship law, with no dual citizenship for naturalized citizens.
The passport is rarely given to non-Indonesians and may only be done so in cases of marriage or other extraordinary integration into society. It’s a shame because it’s a great citizenship, but that’s not what’s on offer here. So it’s a residency.
- Not permanent
Next, this is not even permanent residency. This is a five- or ten-year investor visa parading around as a pseudo-renewable residency, one that could easily be subject to change or expiry. Anyone with experience in the region knows that there is really no such thing as true permanent residency outside of a certain basket of mostly Western countries. I think COVID-19 taught us enough about what Asian governments think of foreigners.
For that kind of money, you can go and achieve a more permanent residency status in many European countries such as Latvia, Greece, or Portugal, or even in neighboring Philippines or South Korea (one of the most underrated programs in the world). You could also head to Mexico, Colombia, or Brazil and enjoy high-growth, non-aligned markets in the Americas.
- Not uniquely necessary
The least sense-making element of this program announcement is that the program provides no net-new mobility optionality into the country.
Indonesia has already had a typical confusing potpourri of de-facto investor residency visas through its KITAS investor visa pathways and KITAP permanent residency status after a long stay in the country.
Moreover, in 2022, the country initiated its own Second Home program, with relatively reasonable (although still somewhat overpriced) minimums of around US$130,000 deposits for a 10-year renewable visa. Am I missing something or is that program actually better? Will it now close?
There had also been constant talk of a true digital nomad visa being launched for the Bali-adjacent crowd. Yet, in practice, many visa fixers across the country could get you endlessly renewable “social visit” or “business research” visas that allowed people who wanted physical presence in the country to achieve it. So, let’s be clear: Nothing here is new.
How could Indonesia’s golden visa be better?
My recommendation for how to improve the program maps along the precise inverse of my gripes with it. It needs to be less expensive, permanent, and uniquely necessary to be attractive.
- Less expensive
Sure, Indonesia is an attractive market and a great country, but RCBI products have global market value considerations. Lower the threshold to an absolute maximum of US$250,000 of ultimately-refundable investments or holdings and/or US$100,000 or less of non-refundable ones. Inflation in product is real, but it still has to make sense.
- More permanent
I am a fan of at least 20-year renewable residency products for Asia, because they appease government concerns about “permanent status of non-citizen foreigners”, yet de-facto provide the security of an ongoing immigration status that investors want for the confidence of planning out their assets and families coming to the country.
Besides, who can even be bothered speculating what their own personal immigration whereabouts will look like after 20 years? It almost offers an easy exit option on expiry and can sometimes offer a more flexible tax status.
- Uniquely necessary or attractive
Indonesia could do so much with its destination-attraction policies. Make a new program but even simpler and easier. Make it more digital. Make it faster. Replace old programs with a suite of better ones. Offer special incentives at airports, banks, or with real estate. Do something! Anything but this.
Governments often think they can sit back and rest on their laurels. Their monopoly on power and, in this case, the keys to properly entering a major rising world economy and lifestyle destination, may lead them to believe that they can set any rule they come up with and it will work. Thinking like this is a logical fallacy in the path towards RCBI success.
Just because that’s the way something has always been done or the way some government bureaucrat said it should be done, does not make it so. It does not make it the only way to attract investment nor by far the best potential way. Investors have choices, and no country can succeed just because of a short-term lack of product in the marketplace or already-existing needs to do business in a given country.
This program design reminds me of my core mantra with regards to residency and citizenship by investment: The purpose of an RCBI program is to attract investment that would otherwise not come to your shores were it not for the incentive of the program. It is not to naturalize existing immigrants, process existing investments, or wrap up normal, corporate-level FDI in fancy terms and call it a Golden Visa.
Golden Visas give individuals and companies a reason to come to your country where they otherwise wouldn’t have selected it, thought much of it, or even heard of it (hello, dear Vanuatu back in the glory days).
They give the right people an irresistible incentive and a red carpet on which to walk in and establish their lives, livelihoods, and legacies. It’s the win-win-win of globalization, and it really isn’t rocket science, yet so few countries get it right. And since the model has been proven repeatedly, no country has an excuse to remain poor in today’s world of globally mobile capital and people.
The bottom line: Who will be the first to launch the next big thing?
Why can no country in Asia seem to properly streamline its residency and citizenship regime? Is it because of long-standing ethnic and religious hangups regarding citizenship? Is it just because of the usual misinformation, corruption, and gridlock that plague governments?
Let’s see how it all unfolds with Indonesia’s Golden Visa. I won’t hold my breath for this one. And let it be known that it’s not because I think the country has nothing to offer or isn’t “worth it”, but because the new policy will not make even the slightest drop in the bucket towards what net-inbound abundance could be achieved if it were properly designed.
Brian Greco is a traveler, cultural explorer, and advocate of free movement and the investment migration industry based in Istanbul, Turkey. Originally from the USA, Brian has a background in globalization studies at New York University and experience living in Asia, the Middle East, Eastern Europe and traveling solo to more than 75 countries. He focuses on investigating and promoting new possibilities for expanding lifestyles in global cities, especially in frontier markets. Brian is a believer in the power of discovering the lesser-known path in life and using travel as a tool for personal growth.