Indonesia’s strategic position in the global remote work movement: Implications for cross-border M&A

Indonesia’s position is strengthened by several key drivers. Its vast working-age population offers cost-efficient and adaptable talent for multinational companies. The government’s large-scale Ibu Kota Nusantara (IKN) project, a planned smart and sustainable capital, reflects major investments in connectivity, utilities, and green infrastructure designed to attract business and remote professionals. In addition, the introduction of the Remote Worker Visa (KITAS E33G) in 2024 has provided digital nomads with a one-year residence permit, though still less competitive compared to longer-term visas in neighbouring countries like Thailand and Malaysia.

Yet, challenges remain. Infrastructure gaps outside major cities, evolving but still limited visa options, and complex tax rules pose hurdles for both individuals and businesses. Remote workers staying over 183 days are considered tax residents, while foreign companies with remote staff in Indonesia face potential permanent establishment (PE) risks. These issues underscore the need for clearer, more business-friendly regulation to ensure Indonesia stays competitive in attracting globally mobile talent.

For investors, the rise of remote work carries direct M&A implications. Beyond traditional metrics, due diligence now includes workforce flexibility, regulatory stability, and infrastructure readiness. Bali, a top global hub for remote workers, illustrates how strong demand for co-working spaces, hospitality, and long-stay housing has fuelled investor interest. Sectors such as digital economy (e-commerce, fintech, cloud services), healthcare and wellness, renewable energy, tourism for digital nomads, and employer of record (EOR) solutions are also becoming increasingly attractive for cross-border deals.

However, uncertainties around visa rules, taxation, and infrastructure continue to pose risks that could complicate deal structuring. Companies that can demonstrate compliance and strategically align with Indonesia’s evolving policies will benefit from stronger valuations and smoother post-merger integration.

Indonesia now stands at a pivotal moment. With the right policy refinements – clearer tax guidance, more flexible visas, and improved infrastructure – Indonesia could strengthen its position as a leading hub for global talent and investment in Southeast Asia. For cross-border M&A, this means new opportunities but also highlights the need for careful navigation of the local landscape.

Read the full article on our website to explore how Indonesia’s remote work evolution is reshaping investment strategies and creating opportunities across multiple sectors.

---

At Protemus Capital, Alfira Fazriananda plays a key role in the business development team. She manages the company’s social media presence, content strategy, and online campaigns, while collaborating with stakeholders to support growth and enhance brand visibility. Her passion for communication and marketing drives her efforts to support the company’s growth.