Golden Visa Gets Negative Connotation Abroad, Are You Sure You Can Bring Investment?

President Joko Widodo delivered a speech at the launch of Golden Visa in Jakarta, Thursday (25/7/2024). (ANTARA/HO-Ditjen Immigration)

JAKARTA Executive Director of the Center of Economic and Law Studies (Celios) Bhima Yudhistira suspects that Golden Visa's policy is closely related to the Family Office discourse in Indonesia. According to him, it is not certain that this Golden Visa will bring in large investments from abroad.

The government recently released the Golden Visa Indonesia policy. This service is expected to be a bait to attract more foreign nationals to invest in Indonesia.

In simple terms, Golden Visa can be interpreted as a privilege given to foreign nationals in the form of limited stay visas within a certain period of time if they are willing to invest in Indonesia.

President Joko Widodo claims that Indonesia has great potential as a global investment destination, because it has good economic growth, maintained political stability, and abundant demographic bonuses and natural resources.

Jokowi said that Indonesia would become a promising country for global investors and talents.

"All of that will provide great electoral players for the country, ranging from capital gains, job opportunities, technology transfers, improving the quality of human resources (human resources), and others," said the President at the Ritz Carlton Hotel, Jakarta, Thursday (25/07).

But on the other hand, Jokowi does not want this Golden Visa to be given to people carelessly. He only wants this facility to be given to good quality travelers, so it is really selective. Jokowi does not want Golden Visa to even pass people who endanger the security of the country.

Although the government is very optimistic that it will be able to attract foreign investors through Golden Visa, this is not the case with a number of economic observers.

Executive Director of Celios Bhima Yudhistira even said that this visa goal was closely related to the Family Office, which the government had touted.

Citing Investopedia, Family Office is an advisory firm for the management of private assets that serves super-rich or ultra-high-net-worth individuals. By forming a Family Office, the government hopes that Paracrazy Rich will place its funds in Indonesia.

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan even flew to Abu Dhabi, United Arab Emirates to study Family Office.

Seeing the government's coolness in opening the Family Office in Indonesia, Bhima suspects that the Golden Visa policy is closely related to the plan.

"It cannot be separated between Golden Visa and Family Office because in various countries where the Family Office is based, many super-rich people ask for special immigration treatment," Bhima said when contacted by VOI.

However, Bhima warned that Golden Visa would not necessarily attract investment into Indonesia in the near future. There are several things that Bhima highlighted regarding this matter.

First, the government's transition period is considered as a crucial period so that some potential investors are active and familiar. In addition, Bhima assessed that Golden Visa was only a sweetener to attract investment.

"Who is the finance minister, or the Prabowo government's economic team is an important consideration because it affects investment policy certainty," explained Bhima.

In the end, investors will consider infrastructure readiness, financial market depth, industrial competitiveness and complexity levels of the bureaucracy. Here lies the intense competition with countries such as Singapore, Thailand and Malaysia," he added.

The last problem is related to personal data protection and financial transaction data which is also a concern. Bhima is worried that the leakage case at the National Data Center some time ago will be a record for potential recipients of Golden Visa to move their assets to Indonesia. Finally, he also asked the government to be careful because investment worth at least IDR 5.3 billion could be only portfolio assets.

When investors have got Golden Visa, how can the government supervise if there is a portfolio withdrawal? Because assets such as debt securities investment and very liquid shares can come out at any time," he said.

"The point is that there are many considerations, yes, and Golden Visa is not the only way to encourage investment to enter," said Bhima, adding.

Golden Visa is nothing new for other countries. Economy observer from the Bright Institute, Muhammad Andri Perdana said there were more than 60 countries imposing this policy in 2022.

Saint Kitts &Nevis, a small country with two islands in the Caribbean region that first implemented Golden Visa in 1984. This scheme was followed by Canada, the United States, and other European countries.

However, according to Andri, Golden Visa has begun to be abandoned by a number of countries such as Australia, Portugal, Spain, and Bulgaria because it is considered ineffective. In addition, there is the potential to be used as a medium of crime such as money laundering, tax evaders, or hiding illicit money.

Investments that enter countries that apply Golden Visa are also mostly only used to buy property or just deposits.

"It's rare and no one even invests directly like setting up a company," said Andri

"In Greece, for example, Golden Visa is used by investors to buy property in tourist attractions, as a result, it will increase property prices to be very significant," he added.

Andri still said, the IMF report stated that investors from China made the countries that gave Golden Visa a safe paradise or a safe place to clean and even hide their dirty funds.

This negative image of Golden Visa is also the cause of developed countries stopping the policy.

If the government really wants to withdraw foreign investors' funds, what needs to be done is to clean up several things including eliminating illegal levies that burden entrepreneurs, creating clean bureaucracy, and simplify licensing.