The E23 “Freelance KITAS” in Bali: What the Law Actually Says and Why It Can Be a Trap

The short version: There is no such thing as a “Freelance KITAS” in Indonesian law. The E23 is an employment permit – you get hired by a local company. You become an employee. It ties you to one specific company, one job title, and one location. Foreigners operating as “freelancers” on an E23 KITAS put themselves – and not necessarily the company or agent – at risk of deportation, blacklisting, and fines up to IDR 500,000,000.

This article explains exactly how it works, what the law says, and what your legitimate options are. If you are thinking about, or already operating as, a freelancer with an E23 KITAS, spend some time on this page.

What the E23 KITAS actually is

The E23 is an official index code within the Indonesian immigration system. It represents an Employment KITAS – Kartu Izin Tinggal Terbatas, or Limited Stay Permit – issued under Law of the Republic of Indonesia Number 6 of 2011 concerning Immigration.

An E23 KITAS is, by definition, a permit for an employment relationship – with an employer in Indonesia. To obtain one, two specific documents from the Ministry of Manpower are required, which agencies and employers will need to provide to actually apply for an E23 KITAS.

• RPTKA (Rencana Penggunaan Tenaga Kerja Asing) – the Foreign Worker Utilisation Plan. A company must justify to the Ministry of Manpower why they need a foreign worker, and list the specific job title, location, and salary. This is why applicants need to provide CVs and proof of expertise in some cases.
• IMTA (Izin Menggunakan Tenaga Kerja Asing) – the Work Permit itself, issued for that specific individual in that specific role.

Without both documents, no legal working KITAS exists.

What the E23 is not

The Indonesian Directorate General of Immigration has no category called a “Freelance KITAS” or “Self-Employed KITAS.” It does not exist. The E23 is not:

• A business licence for independent service work of any kind
• A permit to invoice multiple Indonesian clients or companies
• An exemption from labour law restrictions
• A right to work in locations not listed on the RPTKA
• A solution for digital nomads to work for anyone, anywhere in Indonesia, or to run their own business – including yoga retreats

The permit is location-specific and role-specific. If the RPTKA says you are a Senior Consultant for XYZ Agency in Jakarta, that is what you are – legally. Working as a DJ at a Kuta beach club is a different job in a different location. When immigration officers check, they look at the RPTKA, not your actual day-to-day work.

What actually happens when you get a “Freelance KITAS”

An E23 requires a corporate sponsor – the company that hires you – and a specific job. The “Freelance KITAS” ads you might see on Instagram are typically handled through a structure known as an umbrella company arrangement.

You might get the impression that you will have full legal status for independent work. That is not the case.

When you pay the agency to process your permit, the RPTKA they submit to the Ministry of Manpower classifies you as a formal, full-time employee of that agency – tied to their location and their job description. On paper, you work for them. We would be surprised if the word “freelance” appears anywhere in the legal documents. Either way, check the contract between the agency, the employer, and you before signing anything.

This umbrella company arrangement then suggests – or leaves you to assume – that you can invoice clients, perform at venues, run retreats, or photograph events once the KITAS is in hand. Many people operate this way for months without any issues. But the risk is real. Immigration and fiscal violations are exactly what this arrangement tends to trigger eventually.

What happens when immigration checks

Indonesian Immigration runs regular enforcement operations, including the ongoing Operation Jagratara – a national programme targeting foreigners who work outside their permit conditions. In 2024 alone, one four-day operation across 270 locations in Indonesia detained 687 foreign nationals. The operation specifically targets yoga instructors, photographers, tattoo artists, diving instructors, breathworkers, villa agents and resellers, and other creative and service workers operating without the correct permits.

If an officer finds you performing at a beach club in Seminyak, or running a retreat in Ubud, and your RPTKA says you are a consultant based in Jakarta, you are in violation – regardless of whether your KITAS card is in your wallet. And that is just the immigration violation. The tax side is a separate problem.

The immigration consequences

Under Article 122(a) of Indonesian Immigration Law No. 6 of 2011:

Any foreigner who deliberately abuses or commits activities that are inconsistent with the intent and purpose of the Stay Permit granted to them shall be punished with imprisonment for a maximum of 5 years and a fine of up to IDR 500,000,000.

In practice, criminal prosecution is less common than administrative action – immigration authorities tend to favour deportation because it is faster. But the legal exposure is real, the consequences are serious, and the process can be genuinely intimidating:

• Immediate detention at the point of enforcement
• Deportation from Indonesia
• Blacklisting (Tangkal) – under 2024 amendments to the Immigration Law, entry bans can now extend up to 10 years, or in serious cases be permanent
• Fines

Enforcement is increasing, not easing

By end of September 2024, Bali had already surpassed its total deportation count for all of 2023. The Ministry of Immigration and Corrections has publicly stated that operations will continue to intensify. In August 2025, a 100-officer Immigration Patrol Task Force was deployed in Bali, supported by police, military, and Satpol PP, operating with body cameras and the authority to temporarily seize passports.

The regulatory environment in Bali is tightening. That is the direction of travel. And even though plenty of digital nomads, life coaches, and yoga teachers in Bali are running on an E23 KITAS without being caught, that does not make the arrangement legally clean.

And, not to forget – the tax and social security obligations nobody tells you about

The immigration risk is one part of the problem. The fiscal obligations attached to a legitimate E23 are the other – and these are rarely explained properly when you apply for a “Freelance KITAS” that does not legally exist.

If your E23 were being operated correctly and legally, here is what that actually means in practice.

The billing problem if you think you are a freelancer

This is where the “Freelance KITAS” structure most visibly breaks down. Under a legitimate E23, you cannot send invoices. You are an employee. The company you are registered under invoices the client, collects the revenue, and pays you a salary – running it through their accounting system, paying corporate tax, registering VAT where applicable, and handling all employer obligations. That is what should happen.

If you are on a “Freelance KITAS” and sending your own invoices directly to venues, retreat organisers, or brands – you are operating outside the structure your permit was issued under. The income is not declared. The tax is not paid. The BPJS contributions are not being made. And you have no legal basis to be receiving that income in the first place.

The gap between what you think you can do as a “freelancer” and what the law requires is significant. The immigration risk gets most of the attention, but the tax exposure is just as real – and just as much your problem.

NPWP – tax registration number

Any foreign national holding a KITAS and staying in Indonesia for more than 183 days in a 12-month period becomes a tax resident. As a tax resident, you are required to obtain an NPWP – Nomor Pokok Wajib Pajak – Indonesia’s taxpayer identification number. This is registered through your employer or directly at the local tax office.

Without an NPWP, your employer must withhold tax at a rate 20% higher than the standard rate. You also cannot file a tax return, and you may encounter difficulties with visa renewals and local bank accounts.

PPh21 – monthly income tax withholding

Once registered, your employer is legally required to deduct and remit PPh21 – Indonesia’s payroll income tax – from your salary every month. Indonesia uses a progressive tax rate structure. The rate starts at 5% for the lowest bracket and rises to 35% for income above IDR 500 million per year.

Critically: the umbrella agency that holds your KITAS is legally your employer. They are the entity responsible for calculating, deducting, and paying your PPh21. Your income has to run through their books. You cannot invoice clients directly – legally, the agency invoices clients, collects the money, and pays you a salary. In practice, most umbrella agencies offering “Freelance KITAS” arrangements do not do this. Which means the tax is not being paid, and you are exposed.

By 31 March each year, all tax residents must file an annual tax return (SPT Tahunan) through the Directorate General of Taxes online portal, declaring all income.

BPJS – mandatory social security and health insurance

Indonesia’s social security system, administered by BPJS (Badan Penyelenggara Jaminan Sosial), is mandatory for all employees – including foreign workers employed for six months or more. This is not optional and is not waived for foreigners on a KITAS.

There are two programmes your employer must register you for:

• BPJS Kesehatan – health insurance. Employer contributes 4% of salary, you contribute 1%.
• BPJS Ketenagakerjaan (formerly Jamsostek) – employment social security covering workplace accidents, death benefit, old age savings, and pension. Employer contributions range from approximately 6% to 8% of salary depending on risk category; employees contribute around 3%.

In addition, employers pay a DPKK levy of USD 100 per month per foreign employee – a government skills development fund – which must be paid before the work permit is issued. Most agencies charge you this in a lump sum and pay the levy on your behalf. That part is usually done correctly.

If the umbrella agency holding your KITAS has not registered you for BPJS, your employment arrangement is not legally compliant – regardless of whether you hold a KITAS card.

What legitimate options exist

PT PMA – foreign-owned company

Setting up a Perseroan Terbatas Penanaman Modal Asing (PT PMA) allows you to operate your own business in Indonesia. Once established, you can apply for an Investor KITAS (E28A), which does not require a separate work permit. The company invoices clients, runs revenue through proper accounting, pays corporate tax and VAT where applicable, and pays you a salary or dividend. This is the correct legal structure for self-employed professionals who want to work independently in Bali. It involves setup costs and ongoing compliance obligations, but it accurately reflects your situation.

True remote work

If you work exclusively for clients based entirely outside Indonesia, with income deposited in a foreign bank account, you are in a different situation – broadly tolerated as a regulatory grey area. This is fundamentally different from working for Indonesian clients or being paid by Indonesian entities.

E33G Remote Worker Visa

Indonesia introduced the Remote Worker Visa (E33G) for foreign nationals employed by companies based entirely outside Indonesia. It does not permit taking local Indonesian clients or receiving income from Indonesian sources. It is designed for people working remotely for foreign employers – not for independent professionals running a business in Bali.

Standard E23 through a legitimate employer

If you are genuinely employed by an Indonesian company in a specific role, the E23 is the correct permit. The company takes on legal responsibility, the documentation reflects your actual work, and the arrangement is fully compliant – including NPWP registration, PPh21 payroll tax, and BPJS contributions – as long as you work only in the role and location stated on the RPTKA.

Frequently asked questions

E23 Freelance KITAS - questions answered

About this article

This article is for general information only and is not legal or tax advice. Indonesian immigration and tax law changes, and individual circumstances vary. Speak with a licensed Indonesian immigration lawyer and a registered tax consultant before making decisions about your visa, permit, or tax status in Indonesia. We are not a legal or immigration service – we are sharing information based on what we have researched and experienced here in Bali.

Sources: Law of the Republic of Indonesia No. 6 of 2011 concerning Immigration (official translation); Ministry of Manpower regulations on RPTKA and IMTA; Directorate General of Taxes – pajak.go.id; BPJS Ketenagakerjaan official contribution schedules – bpjsketenagakerjaan.go.id; Hukumonline legal analysis on Article 122 (March 2023); The Bali Sun and The Bali Times reporting on Operation Jagratara (2024–2025).

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