Foreign Direct Investment in Bali: A Practical Guide
Key Takeaways
Foreigners must operate in Indonesia through a PT PMA — a foreign-owned limited liability company. There is no legal alternative for most commercial activities.
Minimum paid-up capital is IDR 2.5 billion, and total investment must exceed IDR 10 billion (excluding land and building).
Every business must register under a specific KBLI code. Choosing the wrong one carries real consequences, especially in Bali where certain codes (68111, 70209) face heightened scrutiny.
All businesses must transition from KBLI 2020 to KBLI 2025 codes by 18 June 2026.
Nominee arrangements, using an Indonesian to hold shares on a foreigner's behalf are explicitly prohibited and legally void.
The Bali Governor has formally closed virtual office registrations for foreign investment in the province, requiring foreign-owned PT PMAs in Bali to maintain a physical business address.
A PT PMA carries multiple recurring compliance obligations across tax, social security, and investment reporting. Falling behind triggers sanctions and blocks corporate actions.
Where Every Foreign Business in Bali Starts
Whether you're opening a beach club, running a villa management company, or launching a wellness brand, every foreign investor in Bali starts at the same place: setting up a properly structured Indonesian company. Get this wrong and everything that follows from property, licensing, banking, hiring. It becomes far harder than it needs to be.
This article walks through the essentials: what kind of company you need, how much capital is required, how to classify your business, what the OSS risk-based licensing system requires, and the ongoing compliance load you'll need to maintain.
Investing in Bali: The Basic Structure
You need a PT PMA
Any foreigner wishing to conduct business in Indonesia including operating a villa or rental property must do so through a PT PMA, a foreign-owned limited liability company registered under Indonesian law. There is no legal alternative for most commercial activities.
| Requirement |
Threshold |
|---|---|
| Minimum paid-up capital | IDR 2.500.000.000 |
| Minimum total investment | More than IDR 10.000.000.000 (excluding land & building) |
| Minimum shareholding | IDR 10.000.000 / shareholder |
Bali-specific restriction: no virtual offices
In December 2025, the Bali Governor issued Letter B.27.000/5753/PM/DPMPTSP formally closing virtual office registrations for foreign investment in the province. A subsequent letter in January 2026 (B.27.000/642/PM/DPMPTSP) extended this by also closing foreign investments in business fields with low and medium-low risk levels.
In practical terms, this means a foreign-owned PT PMA based in Bali must maintain a physical business address and co-working spaces and virtual office services that were previously used as registered addresses are no longer accepted. New PT PMAs being formed in Bali, and existing PT PMAs currently registered at virtual office addresses, need to plan for this.
KBLI codes: Understanding Business Classification
Every business in Indonesia must be registered under a KBLI code, a five-digit classification that defines what your company is legally permitted to do. For accommodation businesses, the relevant codes are:
● 55110 — Star Hotel
● 55120 — Non-Star Hotel
● 55130 — Homestay
● 55193 — Villa (restricted: for cooperatives and MSMEs only — not open to 100% foreign ownership)
● 55194 — Apartment Hotel
● 55199 — Other Short-Term Accommodation
Choosing the wrong KBLI is a common and costly mistake. It can result in administrative sanctions and, in Bali specifically, there is heightened scrutiny over certain codes (particularly KBLI 68111 and 70209).
Indonesia is updating its business classification system from the 2020 to the 2025 standard. All existing businesses must update their registered KBLI codes through the OSS platform by 18 June 2026. Failing to transition leaves your business with outdated registrations, which can block licensing actions and trigger sanctions.
If you have an existing PT PMA, this is a near-term action item. If you're setting up a new PT PMA in 2026, ensure your founding documents reference the 2025 KBLI codes from the start.
OSS Risk-Based Business Licensing
Every business in Indonesia is licensed through the Online Single Submission (OSS) system, which categorises businesses by risk level. The risk level: Low, Medium-Low, Medium-High, or High determines what basic requirements, business licenses, and supporting licenses you need.
| Risk Level | What's Required |
|---|---|
| Low | Zoning approval, environmental approval, building approval, building worthiness certificate, NIB. No certificate standard or license required. |
| Medium-Low | All of the above, plus a self-declared Certificate Standard (SS). |
| Medium-High |
All of the above, with a verified Certificate Standard. |
| High | All of the above, plus a formal License (IZ) and any applicable supporting licenses. |
All risk levels require the same four basic requirements: Zoning Approval (PKKPR/KKKPR), Environmental Approval (SPPL, UKL-UPL, or AMDAL depending on impact), Building Approval (PBG), and Building Worthiness Certificate (SLF). Supporting licenses (PBUMKU) apply across all risk levels as relevant to the specific business.
Note: as of January 2026, the Bali Governor has closed foreign investment in business fields classified as Low and Medium-Low risk in the province, further restricting the activities foreign-owned PT PMAs can undertake locally.
Ongoing Compliance Obligations
| Obligation | Frequency |
|---|---|
| Capital Investment Activity Report (LKPM) | Quarterly |
| Annual General Meeting of Shareholders | Annually |
| Beneficial Owners information update |
Annually / on change |
| Manpower Mandatory Report (WLKP) | Annually |
| BPJS (health & social security) | Monthly |
| Tax reporting | Monthly & Annually |
Most established investors handle these obligations through a corporate secretary, a tax consultant, and an accountant, either in-house or outsourced. Trying to manage them informally, or letting them lapse, is one of the most common reasons foreign-owned businesses in Bali run into regulatory trouble.
Practical Issues
Capital conversion problems: converting from a domestic company (PMDN) to a foreign investment company (PMA) without first confirming the business field is open to foreign ownership and meeting the capital and investment value thresholds.
Inappropriate KBLI selection: registering under a KBLI code that doesn't match the company's actual activities, exposing the operator to administrative sanctions. In Bali specifically, KBLI 68111 and 70209 face heightened scrutiny.
Incomplete OSS licensing: operating without the full set of required basic requirements (zoning, environmental, building, building worthiness) for the relevant risk tier, leaving the business exposed to enforcement action.
Reporting failures: missing periodic obligations (LKPM, BPJS, tax) triggering warning letters, administrative sanctions, and the inability to process corporate actions.
Virtual office addresses: using a virtual office for a foreign investment in Bali, no longer permitted under the Bali Governor's December 2025 directive.
Nominee arrangements: holding shares through an Indonesian nominee, legally void under Indonesian law, with ownership subject to legal challenge.
Speak to Our Team
If you're unsure whether your current structure, KBLI registration, or compliance posture is on solid ground, please do not hesitate to reach out to us at Bali Corporate Services. Our team is here to guide you through every step of the process.
