From Portugal to Indonesia – tax residency questions (HK vs PT PMA)

Tax and legal
1

Hi everyone,

I’d love to get your thoughts on my situation.

In 2024 I quit my job in Portugal and moved to Indonesia. Since then, I’ve been working remotely with Portuguese companies as a freelancer (through “recibos verdes” in PT). I ended up spending more than a year here, signed a yearly rental contract, and also started working in Bali with a Freelancer KITAS VISA (important detail for later).

As you know, taxes in Portugal are heavy, and since I no longer live there it doesn’t make much sense. It’s not about avoiding taxes, but about optimizing my setup.

From what I understand, I now have two main options — and I’d love to hear your opinions (or alternative suggestions). Note: I plan to continue living in Indonesia for now.

1. Incorporate in Hong Kong

  • Create an HK company under the offshore regime (0% tax).
  • Leave Portuguese tax residency, and instead claim Indonesian tax residency (KITAS, rental contract, flight records as proof) - in order to leave one residency, do I really need to officially become tax resident elsewhere?
  • All income goes into the company. I could either pay myself dividends or just leave profits inside.
  • Concern: since I’d be physically working from Indonesia as the company director, Indonesia could argue the company has a permanent establishment here → meaning I’d still owe personal tax, which would defeat the purpose. How likely is this risk in practice?
  • My thinking: this setup feels more global/flexible, since I’m not sure how long I’ll actually stay in Indonesia.

2. Incorporate in Indonesia (PT PMA)

  • Another option is to set up a PT PMA locally. The interesting part: there’s a regime where you pay only 0.5% tax on turnover for the first 3 years, which is very attractive.
  • It would be fully legal and aligned with my actual residence.
  • What I don’t fully understand: I currently have a Freelancer KITAS VISA. Would I need a different KITAS to be a director/shareholder of the PT PMA? That part confuses me. Also, I’m not sure how complex it is to manage an Indonesian company day to day.

Would love to hear your advice:
– Which option seems more viable in the long run?
– How real is the risk of Indonesia going after an HK company managed from here?
– And any other setups or tips you think I should consider?

Thanks in advance :folded_hands: