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Exa: villabalisale.com
Exa: villabalisale.com
Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppEstablishing a business in Bali as a foreigner in 2026 continues to require navigating Indonesia's layered regulatory framework, which distinguishes s
Establishing a business in Bali as a foreigner in 2026 continues to require navigating Indonesia's layered regulatory framework, which distinguishes sharply between domestic and foreign-owned entities. The primary vehicle for foreign business ownership remains the PT PMA — Perseroan Terbatas Penanaman Modal Asing — a foreign-owned limited liability company regulated under the Indonesian Investment Law (Law No. 25 of 2007) and its subsequent implementing regulations under the OSS (Online Single Submission) system.
The Negative Investment List, formally replaced by the Positive Investment List under Presidential Regulation No. 10 of 2021, defines which business sectors are open to foreign ownership and at what percentage. Some sectors permit 100% foreign ownership, while others require Indonesian partnership at varying equity thresholds. Certain sectors — including small-scale retail, tour guiding, and traditional craft production — remain closed to foreign investors entirely.
Minimum investment requirements for a PT PMA remain a common point of confusion. While the Government Regulation requires a minimum total investment of IDR 10 billion (approximately USD 625,000) for most foreign-owned companies, the paid-up capital requirement is set at IDR 2.5 billion. These figures are often cited incorrectly in informal guides, leading to costly misunderstandings at the incorporation stage.
Alternative paths exist for smaller operators. The PT Lokal — a locally owned Indonesian limited liability company — can be used by foreigners in partnership with an Indonesian national, though nominee arrangements carry significant legal risk under Indonesian law and are not formally recognized. The CV (Commanditaire Vennootschap), a limited partnership structure, is available only to Indonesian citizens.
For professionals and solo operators, the increasingly popular KITAS (Temporary Stay Permit) tied to an investor visa — specifically the Retirement KITAS or the Investor KITAS under the second home visa category introduced in 2022 — provides a legal basis to reside in Indonesia without formal business incorporation. However, this does not grant the right to earn income locally.
The 2026 landscape for foreign business setup in Bali is more navigable than it was five years ago, but it remains unforgiving for those who rely on outdated information or informal advice. The OSS sy
stem has genuinely streamlined the registration process for compliant PT PMA structures, but the paperwork burden and regulatory interpretation requirements are still substantial. We see clients regul
arly arrive with misconceptions — particularly around nominee shareholding, which remains a legal grey zone that Indonesian courts have ruled against in multiple cases.
The most significant shift we are tracking in 2026 is the increased enforcement posture of the BPKM (now reorganized under BKPM/Indonesia Investment Coordinating Board) combined with immigration authorities cross-referencing business registration data. Operating a business activity under a tourist visa or without the correct KITAS category is a risk that has materially increased, not decreased.
For serious investors, the PT PMA remains the gold standard — transparent, enforceable, and internationally recognized. The minimum investment threshold is high, but the legal certainty it provides is worth the commitment for any business with real long-term ambitions in Bali.
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