- Osome Blog
- Digital Nomad Tax in Bali
Digital Nomad Founders in Bali: Personal and Company Tax in 2026
- Published: 9 November 2026
- 13 min read
- Taxes & Compliance, Running a Business
Ruth Dsouza
Author
Ruth Dsouza Prabhu is a content developer with a passion for turning ideas into clear, engaging narratives. Drawing on her experience in marketing communications and lifestyle writing, she simplifies complex business topics for entrepreneurs. Her work spans strategy, storytelling, and thought leadership, delivering content that is credible, practical, and impactful.
Deepti Laddha
Reviewer
Deepti Laddha is Head of Corporate Operations at Osome and an expert contributor to our content. With more than a decade of experience in corporate services, she brings deep operational knowledge and practical business insights. Deepti helps translate complex concepts into clear, actionable guidance, enabling entrepreneurs to better understand business requirements and focus on growth.
Digital nomad founders in Bali face two separate tax questions in 2026: what they owe personally in Indonesia, and where their company pays corporate tax. Many arrive assuming overseas clients keep both answers simple, yet the visa they hold and the way they run the business decide each one. This guide sets out both questions so a founder can choose a setup that holds up.
Key Takeaways
- A founder residing in Indonesia for over 183 days in 12 months generally becomes a tax resident, taxed on worldwide income at 5% to 35%, subject to applicable exemptions and tax treaties.
- A company is generally taxed where it is incorporated and where its key decisions are made, so running a Singapore company entirely from Bali can weaken its Singapore residency.
- Singapore's Start-Up Tax Exemption cuts the effective rate on the first SGD 200,000 of chargeable income to about 6.4% in each of a new company's first three years.
- BKPM Regulation No. 5 of 2025 lowered the minimum paid-up capital for a foreign-owned Indonesian company to IDR 2.5 billion, easing investment through a Singapore holding company.
The Two Tax Questions for Nomad Founders in Bali
A founder living in Bali has two separate questions to answer: where they are personally tax resident, and where their business is established and managed. Personal income tax depends on where the founder lives and for how long, which for most readers means Indonesia. Corporate tax only comes into play once there is a company, and it depends on where that company is incorporated and managed, which may be Singapore, Hong Kong, the United States (US), or Indonesia.
The two questions interact. A founder who is an Indonesian tax resident pays personal tax on salary and dividends drawn from the company, wherever that company is registered. Managing an overseas company from Bali can also raise tax questions for the business itself, depending on how and where key activities and decisions take place. A structure that works while the business is small can become more complicated as revenue, clients and investment grow.
Personal tax treatment depends on the domestic law, controlled foreign company rules, and treaty interpretation of the founder’s country of residence, so each founder should get tax advice for their own situation. For founders still deciding where to place the business itself, Indonesia vs Singapore compares the two countries as a place to start a business.
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Indonesian Tax Residency for Foreigners on a Visa
A foreign founder becomes an Indonesian tax resident by meeting any one of three tests, and the visa they hold often decides which test applies first. The Directorate General of Taxes (DGT) set out how it applies these tests in regulation PER-23/PJ/2025, which took effect on 9 December 2025.
The three residency tests
Under Indonesia's Income Tax Law, a foreign individual is resident if one of the following applies:
- They are present in Indonesia for more than 183 days in any 12-month period
- They are in Indonesia during a tax year and intend to reside there
- They have a settled home in Indonesia or carry out most of their personal and economic life there
Days are added up across the 12 months, so short trips abroad pause the count without resetting it. Residency is decided by facts on the ground, and a founder cannot opt out of it by keeping a home address elsewhere.
Stay permits and intention to reside
PER-23/PJ/2025 lists the evidence the DGT considers when deciding intention to reside. It includes a Limited Stay Permit (ITAS, widely called a KITAS) valid for more than 183 days, a Permanent Stay Permit (KITAP), a lease of more than 183 days, and documents showing a family has moved to Indonesia.
Holding a remote worker KITAS (E33G) may therefore lead to Indonesian tax residency, depending on how long the founder stays and their circumstances. In general, residency follows more than 183 days of residing in Indonesia in a 12-month period. Founders should confirm their position with an Indonesian tax adviser soon after arrival.
Personal tax rates for residents and non-residents
Residency changes both what is taxed and the rate. A resident is taxed on worldwide income at progressive rates, while a non-resident pays 20% withholding on Indonesian-sourced income only, which a tax treaty may reduce.
The table compares the three positions most Bali founders weigh in 2026.
Tax position | Income taxed | Rates in 2026 |
|---|---|---|
| Indonesian tax resident | Worldwide income, including overseas client fees, salary and dividends, subject to applicable exemptions and tax treaties | 5% to 35%, progressive |
| Indonesian non-resident | Indonesian-sourced income only | 20% withholding, reducible under a tax treaty |
| Singapore tax resident | Income earned in Singapore; foreign-sourced income received by individuals is generally exempt, unless it is connected to Singapore employment or a Singapore business, or received through a Singapore partnership | 0% to 24%, progressive |
In August 2026, Indonesia's Directorate General of Immigration said it is reviewing work visas and studying tax rules for foreign remote workers with the DGT, citing their growing presence in Bali. Policy changes will follow the study.
Corporate Tax Residency for a Company Run from Bali
A company pays corporate tax where it is tax resident, and in most countries that depends on where it is managed as well as where it is incorporated. For a founder in Bali, where decisions are made can matter as much as the registration certificate.
Singapore treats a company as resident when its control and management, meaning the strategic decisions of its board, are exercised in Singapore. A Singapore company whose sole director decides everything from Bali may struggle to show this, and could lose access to Singapore's tax treaties and the start-up exemption.
Indonesia can also tax a foreign company through a permanent establishment (PE). Under domestic law, providing services in Indonesia for more than 60 days in any 12-month period can create one. For a Singapore company, the Indonesia-Singapore tax treaty sets the threshold at more than 90 days in any 12-month period. PE profits are taxed at 22%, plus a 20% branch profits tax on profits sent abroad unless a treaty lowers it.
A Singapore company needs at least one director who lives in Singapore. Osome's nominee director service meets that requirement from day one, so a foreign founder can incorporate without relocating. Keep board minutes that show where strategic decisions are taken.
Signs a Bali-Based Founder Needs a Company
A founder can invoice as an individual while income is modest, clients are few, and there are no plans to hire or raise money. In that case, the company question can wait, and personal tax residency is the main issue to manage.
A company starts to make sense once the business needs to exist separately from the founder. These are the usual signs:
- Clients ask for invoices from a registered business or for a tax certificate
- Profits are left in the business instead of being spent each month
- The founder plans to hire, take on partners, or raise investment
- Contracts carry liability the founder does not want to hold personally
- Payment platforms or banks start asking for business documents
Many freelancers in Bali already hold a US limited liability company (LLC). Singapore vs Delaware explains how the US and Singapore compare for founders who plan to raise money.
Comprehensive company incorporation
Incorporate your company and get an Osome corporate secretary to ensure you comply with laws and regulations from the get-go.
Singapore as a Base for Founders Building for Asia
Singapore suits founders whose clients, partners, or investors are in Asia. Its headline corporate tax rate is 17%, and it has a wide network of tax treaties, including one with Indonesia that lowers withholding tax on dividends, interest, and royalties.
Investor familiarity matters most for founders planning to raise money. Many regional investors are used to investing through Singapore private limited companies, so a business that starts there can avoid a restructuring before its first round. Singapore also generally does not tax capital gains, which helps when shares are later sold.
A founder who plans to raise money or work with clients in Asia should set up where the economics work for both the founders and their investors, from tax to the ease of investing. Starting in Singapore saves a restructuring later, when the business already has contracts, staff, and a structure built to grow.
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Singapore Start-Up Incentives for Foreign-Owned Companies
A new Singapore company pays well below the 17% headline rate in its early years. The Start-Up Tax Exemption (SUTE) covers its first three Years of Assessment (YAs), the Partial Tax Exemption (PTE) applies from the fourth, and a separate set of grants supports specific projects.
Start-up tax exemption terms
Under SUTE, 75% of the first SGD 100,000 of chargeable income and 50% of the next SGD 100,000 are exempt from tax, a saving of up to SGD 21,250 a year. A company qualifies if it is tax resident in Singapore, has 20 or fewer shareholders, and has at least one individual shareholder with 10% or more of its shares.
Investment holding and property development companies are excluded. The residency condition links back to where the company is managed, so a Singapore company controlled and managed from Bali will usually qualify only for the Partial Tax Exemption. For more worked figures, see how much tax you can save by incorporating in Singapore.
Partial tax exemption from the fourth year
From its fourth YA, a company moves to PTE, which exempts 75% of the first SGD 10,000 and 50% of the next SGD 190,000. For YA 2026, every company with tax payable also receives a 50% corporate income tax (CIT) rebate, calculated after the exemption.
The table shows the tax on SGD 150,000 of chargeable income under each regime.
Item | No exemption, amount in SGD | SUTE, amount in SGD | PTE, amount in SGD |
|---|---|---|---|
| Chargeable income | 150,000 | 150,000 | 150,000 |
| Exempt amount | 0 | 100,000 | 77,500 |
| Taxable income | 150,000 | 50,000 | 72,500 |
| Tax at 17% | 25,500 | 8,500 | 12,325 |
| Tax after the YA 2026 rebate | 12,750 | 4,250 | 6,163 |
Figures are illustrative and rounded to the nearest dollar. The YA 2026 rebate and its cash grant are capped at SGD 40,000 per company combined, and the rebate applies to YA 2026 only.
Start-up grants for foreign-owned companies
Most Singapore grants, including Startup SG Founder, Startup SG Tech, the Enterprise Development Grant and the Productivity Solutions Grant, require at least 30% local shareholding. A company owned entirely by foreigners usually qualifies only once a Singapore citizen or permanent resident holds that share.
A few schemes, such as Startup SG Equity and T-Up, do not list a local shareholding threshold, although each has its own conditions. Singapore Startup Grants lists the main schemes and their eligibility rules.
SUTE is claimed through the company's Estimated Chargeable Income (ECI) and annual tax return, with no separate application. Osome's accounting services prepare both filings and apply the exemption bands, so the company does not overpay in its first three years.
Holding an Indonesian PT PMA Through a Singapore Company
Founders who invest in a Bali business, such as a villa operator or a restaurant, do so through a foreign-owned Indonesian company called a PT PMA (Perseroan Terbatas Penanaman Modal Asing). Holding its shares through a Singapore company keeps the investment in a structure that investors and buyers already understand.
BKPM Regulation No. 5 of 2025, issued by Indonesia's Investment Coordinating Board (BKPM) on 2 October 2025, lowered the minimum paid-up capital for a PT PMA from IDR 10 billion to IDR 2.5 billion per business activity. The minimum total investment remains IDR 10 billion per activity, and part of it can be made in qualifying assets instead of cash.
A Singapore holding company gives a Bali investment these practical advantages:
- Dividends paid to a Singapore company holding at least 25% are taxed at 10% under the Indonesia-Singapore Tax Treaty, compared with 20% without a treaty, provided the shares have been held for 365 days under Minister of Finance Regulation PMK 112/2025
- Investors can come in at holding level without changes to the Indonesian company's register
- One parent can own several Indonesian companies or other regional subsidiaries
- A future sale can happen at holding level, subject to tax rules in both countries
The treaty rate applies only if the Singapore company is tax resident and the beneficial owner of the dividends. A shell company with no real operations in Singapore will not get treaty benefits, because the treaty’s anti-abuse rules look through it.
How Osome Can Help
Founders in Bali often run their business from a laptop while their company is registered in another country, which makes annual filings and evidence of where the company is managed easy to neglect. Osome incorporates Singapore companies for foreign founders and provides the nominee director, registered address, and company secretary each company needs.
Osome's accountants handle bookkeeping, ECI, and annual tax returns, including Start-Up Tax Exemption claims, and packages for foreigners can include an Employment Pass application for founders who later relocate. Freelancers, agency owners, and start-up founders get one team for set-up and ongoing compliance, with everything handled online so the work fits around life in Bali. Through the Osome MCP, founders can also connect Claude, or a paid plan of ChatGPT or Gemini, to their books and check invoices or profit and loss from a chat window.
Summary
The order of decisions matters. Settle personal tax residency first, because the visa and length of stay decide whether Indonesia taxes worldwide income. Then choose where the company sits based on where clients and investors are, and make sure it is managed where it is incorporated.
A founder who records board decisions, keeps personal and company money apart, and files on time in each country will find most structures workable. Review the setup once a year, since Indonesia is studying new rules for foreign remote workers and Singapore's rebates change with each Budget.
Ruth Dsouza Prabhu is a content developer with a passion for turning ideas into clear, engaging narratives. Drawing on her experience in marketing communications and lifestyle writing, she simplifies complex business topics for entrepreneurs. Her work spans strategy, storytelling, and thought leadership, delivering content that is credible, practical, and impactful.
