Bali's Low and Medium-Low Risk Tiers Are Now Closed to New Foreign-Owned PT PMAs
Key Takeaways
The closure now in force in Bali is not limited to seven KBLI codes. It applies to the entire low-risk and medium-low-risk tier of the OSS Risk-Based Approach system for foreign-owned PT PMAs registered in the province.
The operational basis is a letter from Governor Wayan Koster to the Minister of Investment and Head of BKPM dated 28 January 2026, now used inside OSS as the working instruction for automatic rejections.
The seven KBLI codes that have dominated public commentary originate from the DPMPTSP as illustrative examples of the misuse the policy targets. They are not the boundary of the policy but rather a subset of the closure in force.
Registering a PT PMA in Jakarta to operate in Bali no longer functions as a workaround. OSS licensing now takes account of operational location, and the address shapes the outcome.
Three parallel interventions accompany the tier-wide closure: a virtual office prohibition, mandatory verification of the IDR 10 billion total investment threshold, and pre-operational compliance documentation.
The KBLI 2025 transition deadline of 18 June 2026 forces every PT PMA in Bali into an OSS filing that is now an active compliance event.
What Is Actually Happening Inside OSS Right Now
The dominant narrative in commentary published since February 2026 has been that Bali has proposed the closure of seven KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) categories to foreign-owned PT PMAs (Perseroan Terbatas Penanaman Modal Asing). That narrative is accurate as far as it goes, but it understates the scope of what is now operationally in force. The seven categories named by the DPMPTSP (Dinas Penanaman Modal dan Pelayanan Terpadu Satu Pintu) in its February submission are examples, not limits. The closure that OSS (Online Single Submission) now applies in practice covers the entire low-risk and medium-low-risk tier of the Risk-Based Approach licensing system, for any PT PMA with a Bali address.
This is the central point investors need to understand. A PT PMA proposing to operate in Bali under any KBLI classified as Risiko Rendah or Risiko Menengah Rendah faces an automatic rejection at the OSS submission stage, regardless of whether the specific code appears on the publicly circulated list of seven.
January 2026: The Month the Policy Began
The policy did not begin with the DPMPTSP's February submission. On 22 January 2026, the Bali Provincial Government and the Ministry of Investment signed a Memorandum of Understanding on investment control in Denpasar. At that signing, ministry officials publicly identified specific violations: companies registered under KBLI 68111 operating short-term tourist accommodations, and foreign capital entering SME-dominated sectors including motorcycle rentals, photography services, and retail trade.
Six days later, on 28 January 2026, Governor Wayan Koster sent an official letter to the Minister of Investment and Head of BKPM (Badan Koordinasi Penanaman Modal), formally requesting restrictions on PT PMA business activity registrations in Bali across the low-risk and medium-low-risk classifications. The letter referenced several KBLI codes by name as illustrative examples and has since been used within the OSS system as the working basis for blocking new applications, ahead of any formal ministerial decree.
This is the unusual feature of the present situation. Practice is running ahead of formal regulation. The DPMPTSP's narrowing of the proposed list to seven codes is a subset of the broader closure the Governor's letter set in motion, not its full extent. An investor reading the seven-code list as the limit of the policy is reading a subset of what OSS now enforces.
The Risk Tiers and Why They Matter
Under Government Regulation No. 28 of 2025 (PP 28/2025), every KBLI is assigned a risk classification that determines the licensing requirements:
| Risk Tier | Requirements |
|---|---|
| Low Risk (Risiko Rendah) | Business Identification Number (NIB, Nomor Induk Berusaha) |
| Medium-Low Risk (Risiko Menengah Rendah) | NIB and Standard Certificate (Sertifikat Standar) |
| Medium-High Risk (Risiko Menengah Tinggi) |
NIB and a Standard Certificate subject to government verification. |
| High Risk (Risiko Tinggi) | NIB and a full Business License (Izin) granted by the central or regional government. |
For more than a decade, the two lower tiers have been the structural entry point for foreign capital into Bali. The reason is straightforward. Low-risk and medium-low-risk codes require minimal documentation, no verification of operational substance, and no central government licensing approval. They have therefore been used not only by PT PMAs whose business genuinely sits in those tiers, but also by PT PMAs whose actual activity belongs in a higher tier but for whom a lower-tier code offered faster incorporation and a route to KITAS.
The Governor's letter and the DPMPTSP's submission both target this structural mismatch. The policy logic is that if low-risk classifications are being used as workarounds, the response is to close them at the tier level for foreign capital in Bali, not to police each code individually.
The scale of foreign investment that has flowed into Bali through this structural entry point is significant. Bali recorded IDR 25.60 trillion in realised foreign direct investment in 2025, within a total investment realisation including domestic capital of IDR 42.81 trillion, according to the Bali DPMPTSP. The compliance correction now in force is a response to the volume of capital that has entered through the lower tiers, not a rejection of foreign investment itself.
The Seven KBLI Codes
The seven KBLI codes that have received most attention are KBLI 68111 (real estate activities), KBLI 70209 (management consulting), KBLI 79110 (travel agency activities), KBLI 77100 (rental of cars, buses, and trucks), KBLI 56100 (restaurants and food service), KBLI 93290 (other amusement and recreation), and KBLI 93130 (fitness and physical activities).
Of these, only KBLI 70209 has received ministerial approval as a formal closure. The remaining six sit within the broader DPMPTSP proposal, which is itself under national review. The practical position, however, is that all seven are being refused at the OSS submission stage for new applications from PT PMAs with a Bali address, alongside the rest of the low-risk and medium-low-risk tier.
The codes were named because they illustrate the misuse pattern most visibly. Real estate codes operating short-term accommodation, consultancy codes acquiring property, vehicle rental codes serving the tourist economy in sectors dominated by local MSMEs. The point of naming them was diagnostic. The closure itself is broader.
The Jakarta Workaround Has Closed
A practice that emerged in late 2025 and persisted into early 2026 was the registration of a PT PMA at a Jakarta address while operating in Bali. This was treated, by some incorporation agents, as a route around the Bali-specific restrictions while they were still being formalised.
In practice, OSS licensing now appears to take account of the operational location of the activity, not only the registration address. A PT PMA registered in Jakarta but seeking to license activity in Bali is treated, for the purposes of this policy, as a Bali application. The workaround has closed in practice even where it has not been formally announced. Investors relying on Jakarta registration for Bali operations should expect either rejection at the OSS licensing stage or compliance scrutiny at the LKPM reporting and KITAS renewal stages.
Three Parallel Interventions
The tier-wide closure does not operate alone. Three further interventions are now visible in OSS enforcement and in DPMPTSP communications:
The virtual office prohibition. PT PMAs in Bali can no longer use virtual offices as their registered business address. The operational presence standard requires a physical address that matches the declared KBLI and is consistent with the zoning classification (RTRW) of the property. Applications using virtual office addresses are being refused at OSS, with KBLI 70209 applications the most visibly affected to date.
Verification of the IDR 10 billion total investment threshold. Under BKPM Regulation No. 5 of 2025, the IDR 10 billion figure is the total investment plan per KBLI per location, not paid-up capital, which is separately set at IDR 2.5 billion and must be deposited in full and locked up for at least twelve months, save for permitted uses such as asset purchase, construction, and operations. Where competing commentary has conflated these two figures, the position in regulation is clear. The verification now being applied focuses on whether the total investment is realistic and supported by the company's capital structure, not on a higher paid-up capital figure.
Pre-operational compliance documentation. PT PMAs are increasingly required to demonstrate compliance with location, environmental, building approval (PBG), and building functionality (SLF) requirements before commercial operations begin. The Commercial Operational License is no longer treated as a formality that follows the NIB. Its issuance is now contingent on documented compliance at the property level.
What This Means for Existing PT PMAs
Existing licences are not retroactively cancelled. A PT PMA holding a valid NIB under a low-risk or medium-low-risk KBLI in Bali may continue operating. The position is preserved for the activity as registered.
The qualification is important. Any new OSS filing under the affected tier, whether to add a KBLI, modify the NIB, change the address, or transition to KBLI 2025, is now an active compliance event. The DPMPTSP and OSS now examine, on each such filing, whether the company's actual activities match the registered code, whether the registered address meets the operational presence standard, and whether the company's LKPM reporting is consistent with the declared activity.
For PT PMAs whose registered KBLI accurately reflects what they do and whose address meets the operational standard, the exposure is limited. The compliance environment is more demanding but the position is defensible. For PT PMAs whose actual operations diverge from the registered code, which the DPMPTSP has identified as the dominant pattern, the position is materially worse. The closure removes the simplest corrective option, which was to add a more accurate KBLI through a routine NIB amendment.
What This Means for New Incorporations
Now, PT PMAs cannot be incorporated in Bali for an activity classified as low risk or medium-low risk. The structural options narrow significantly across tourism, hospitality, food and beverage, recreation, wellness, retail, and small-scale service sectors that have historically been the entry point for foreign capital in the province. In practical terms, the structural entry point that defined foreign investment in Bali for the last decade has closed. Incorporation now sits with higher-risk classifications that carry real licensing and operational-substance requirements from the outset, and a Bali-facing commercial reality cannot be papered over with an out-of-province registration.
The national transition to KBLI 2025 has also introduced specific accommodation classifications now in force which sit at higher risk tiers than the codes historically used for the same activities. This reflects how the classification landscape itself has shifted for the accommodation sector.
The KBLI 2025 Compounding Effect
The closures intersect with the national transition from KBLI 2020 to KBLI 2025 under BPS Regulation No. 7 of 2025. All PT PMAs must align their codes with the new classification framework by 18 June 2026.
For PT PMAs registered elsewhere in Indonesia, this is procedural. For PT PMAs in Bali whose current KBLI sits in the low-risk or medium-low-risk tier, it is not. The OSS filing required for the KBLI 2025 transition is the same filing that now triggers tier-wide compliance review under the closure. The choice of equivalent KBLI 2025 code, the timing of submission, the supporting documentation, and the alignment with the company's actual activity all require assessment before submission. A poorly sequenced transition filing can convert a routine procedural update into a compliance event with material consequences.
The Bigger Picture
The wider point is that the regulatory environment for foreign investment in Bali has shifted from latitude to alignment. The framework that allowed a structural gap between registered KBLI and actual activity is closing, not at the level of individual codes but at the level of the licensing tier those codes occupy.
Speak to Our Team
If your PT PMA holds a KBLI in the low-risk or medium-low-risk tier, or you are planning a new incorporation in Bali, the issues raised here are best addressed through a structured review before any OSS filing is submitted. Please reach out to us at Bali Corporate Services.
