When you arrive in Bali and apply for your first visa (usually for long-term stays, it's the V211 visa – more details HERE – https://bali-legal.com/en/visa-bali-en), you'll likely start seeing ads on your Instagram promoting very cheap residency permits (KITAS) with offers like this:
"KITAS for an Easy Life"
"Simply KITAS for a Simple Life"
"Get a KITAS and Live Easily"
I’ve already written about the consequences that await those who seek this so-called "easy life" in my investigation into immigration checks, where clients were hit with a total fine of $8,000 and faced the threat of deportation for the entire family of three, all because of such a KITAS.
Learn more about how people get caught in immigration checks here: https://bali-legal.com/en/deportaciya-na-bali-en.
More about the fines and how the issue was resolved here: https://bali-legal.com/en/proverka-immigracii-en.
I reached out to several providers of these services to understand how they managed to offer such low prices for a KITAS for a "simple life." After all, Indonesian law is clear: "AN INVESTOR KITAS CAN ONLY BE ISSUED TO THE FOUNDER OF A COMPANY WITHIN INDONESIA, HOLDING AT LEAST 10% OF THE COMPANY’S SHARE CAPITAL".
The legal procedure is straightforward and reliable:
1 - Start a company - the market price is 18 - 20,000,000 IDR (some Indonesians might ask for up to 45,000,000 IDR because you're a foreigner). Companies typically make about 4 - 5,000,000 IDR from this.
2 - Obtain a C314 visa (based on being an investor in your own company) – the market price is 15 - 20,000,000 IDR (usually around 17 - 18,000,000 IDR). Companies make around 3 - 4,000,000 IDR from each KITAS.
3 - Since the company requires at least two people, a second co-founder is needed, so the total market cost is around 54 - 60,000,000 IDR.
4 - Convert the C314 visa into a KITAS upon arrival.
Companies earn about 7 - 15,000,000 IDR from the entire process.
Our profit is around 8,000,000 IDR, for example. This covers organizing, verifying company documents, fraud insurance, working directly with a Russian-speaking manager, office selection, handling unique situations, preparing a complete set of documents, and more. This is the service where companies make their earnings.
In total, the cost of a KITAS for the client is around 27 - 30,000,000 IDR per person.
AS A RESULT OF THE LEGAL PROCEDURE, YOU WILL HAVE A COMPANY WITH TWO (OR MORE) FOUNDERS, TWO KITAS PER FAMILY OR BUSINESS PARTNERS, AND YOU WILL BE ABLE TO OPERATE LEGALLY IN INDONESIA.
For more information on what a KITAS provides and how to properly legalize your stay in Bali, you can read more here: https://bali-legal.com/en/legalizaciya-na-bali-en.
Start a business in Indonesia at the best price
The lowest price on the market for 2 KITAS + company. Leave your request, and our manager will contact you shortly!
Submit a request
How can you do the same thing, but for only 18,000,000 IDR per person??? What is the ease of the procedure and life?
This is what one of the local agencies told me.
This is where the desire to offer the best deal on the market and sell more services comes into play. Some businesses came up with the idea of creating a nominal company.
Since the founder only needs to own 10% of the company's capital, up to 10 people can obtain a KITAS from the same company.
The result? A nominal company can be created—a company that doesn’t actually operate, doesn’t have a legal registered address, and is solely open for investors to obtain the C314 visa, and eventually the KITAS.
Now, let's break down the cost calculation for businesses using nominal companies:
Company registration – 10,000,000 - 12,000,000 IDR (without an office, legal address, data coordination, business licenses, tax number, etc.). Just a registration document with stamps.
KITAS on a nominal company – 14,000,000 IDR.
Closing the company after 2 years to cover the tracks – 10,000,000 IDR.
Closing the KITAS (paid separately by the client) – 1 - 2,000,000 IDR.
The final selling price for this type of KITAS is around 18 - 25,000,000 IDR.
From the whole process, companies earn around 20,000,000 to 80,000,000 IDR for issuing 10 KITAS.
Of course, this is much more profitable, especially considering that the entire process is done “in bulk,” which means they don’t need to:
Coordinate specific business codes with clients;
Carefully check every document letter by letter (since the nominal company is irrelevant and will stay in the notary's drawer). In Indonesia, notaries often make a ton of mistakes;
Look for office space, as you can even list your cat’s home address (in Indonesia, no one checks the registered address when opening a company).
But nobody will question a company for making more money. The real question is: Is this actually legal?
Is it really just “A Simple KITAS for a Simple Life,” without breaking any laws?
No, it’s not. Here’s why:
During my meetings with local entrepreneurs, the most common request I get is, “I want to do everything legally so no one can come after me.”
I always reassure them with one simple observation.
NOW THERE ARE THREE LAYERS OF MASS ILLEGAL IMMIGRANTS ON THE ISLAND, WHICH ARE DIVIDED INTO CATEGORIES:
1 - Illegal immigrants with a visa on arrival: These individuals lack sufficient funds to open a legal business and try to establish themselves on the island, often seeking jobs. For example, they may use the protection scheme. You can read about it HERE https://bali-legal.com/en/legal-bali-second-en.
2 - Illegal immigrants with a B211 visa: These are people who have lived on the island for quite some time, and many have even been here for years, simply renewing their visa while engaging in activities like subletting homes, working as self-employed hairstylists, trainers, etc. I have discussed this in detail HERE https://bali-legal.com/en/zarabotat-na-bali-en.
3 - Nominal shareholders in companies: Companies can have up to 10 nominal shareholders. To prove that a company is a sham, you only need to ask 4 questions:
Where is the company’s office located?
Who are the other co-founders?
How is the main activity conducted (including the structure and types of activities)?
Where are the original documents? (Most, if not all, do not even have copies).
Any inspection, even a random one, can easily lead to deportation from the island for you as a nominal shareholder or result in a hefty fine along with the cancellation of your KITAS, and you may be required to "turn in" all participants in the scheme.
And all of this happens for one simple reason. If you have a company and violate reporting rules, fail to report all your profits, make mistakes with your documents, incorrectly state your office address, or forget to submit a report, this falls under ADMINISTRATIVE LIABILITY.
However, if you deceive the state, which aims to attract money and entrepreneurs to the island, and become part of a group that exploits this opportunity, it is considered CRIMINAL ACTIVITY in Indonesia. This is why there are large bribes and deportations from the island.
Here is a photo of the response in English regarding the fact that the procedure is ILLEGAL.
Such “entrepreneurs” do not pay taxes, do not contribute to the authorized capital (0 investments), and do not improve the local business climate; they do not build cafes, new restaurants, or hotels. These are UNWANTED TOURISTS FOR INDONESIA. This was clearly stated in one of the recent speeches by the governor of Bali in March 2023.
And it doesn’t matter whether you understand this or not.
The guys in my example in the article https://bali-legal.com/en/proverka-immigracii-en wrote: “WE DID NOTHING ILLEGAL”.
They thought this way simply because they did not fully realize that their visa agent was leading them down a false path..
Often, visa agents themselves do not understand that this path is very slippery and believe they are creating an excellent solution for their clients. The problem is that such companies can be easily traced at a general level, and if you take just one, ANY, co-founder of such a nominal business, the entire structure will collapse like a house of cards.
Don’t wait for that moment. MAKE THE ENTIRE PROCESS LEGAL and rid yourself of the constant feeling of anxiety about being caught or suspected of fraud. Moreover, the Indonesian side is currently not even trying to prove anything. Now, if they see that your KITAS is registered to a company with 10 people, it is an automatic accusation and a summons to the immigration office for questioning.
People often come up with new schemes (maybe it’s how our brains are wired) and take on much more risk than they can ultimately handle. And often this risk extends to their clients with assurances that there is no danger.
But more and more cases are now proving otherwise. The Indonesian mentality is different from ours, and if we want to be treated with respect, let’s respect local laws.
WE STILL ONLY SUPPORT LEGAL WAYS TO LIVE AND DO BUSINESS IN BALI.
IF YOU WANT TO LEGALIZE YOUR LONG-TERM STAY, BUSINESS, PURCHASE, OR LAND LEASE ON THE ISLAND - CONTACT US via TELEGRAM OR WHATSAPP for quick communication.
Together, we will make life on the island comfortable.
