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Exa: pramiindriyani.id
Exa: pramiindriyani.id
Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppIndonesia's investment framework mandates that foreign nationals who wish to own and operate a business in the country do so through a PT PMA — Perser
Indonesia's investment framework mandates that foreign nationals who wish to own and operate a business in the country do so through a PT PMA — Perseroan Terbatas Penanaman Modal Asing — a foreign direct investment company established under Indonesian law. This structure is governed primarily by Law No. 25 of 2007 on Investment, Government Regulation No. 5 of 2021 on Risk-Based Business Licensing, and overseen by the Investment Coordinating Board, known as BKPM (Badan Koordinasi Penanaman Modal), now integrated into the Ministry of Investment.
For the hospitality sector in Bali, the PT PMA is the standard and legally recognized vehicle for foreign participation. This includes businesses operating under KBLI 2025 classifications covering hotels (55101–55105, split by star rating, plus 55106 for non-star hotels), villa accommodation (55203 — recoded from the old KBLI 2020 code 55193), restaurants (56101), and tourism services. Note that the legacy KBLI 2020 codes 55110 (star hotels) and 55120 (Hotel Melati) have been superseded under Peraturan BPS 7/2025; the national switch to KBLI 2025 had a deadline of 18 June 2026, so any NIB still carrying 2020-era codes should be reconciled. Investors are required to identify the correct KBLI business activity codes at registration, as these determine which licenses are required and what percentage of foreign ownership is permitted under Indonesia's Positive Investment List (Daftar Positif Investasi).
The minimum investment threshold for establishing a PT PMA is generally set at IDR 10 billion (approximately USD 650,000) in total project value, excluding land and buildings. Paid-up capital requirements have been revised under OSS (Online Single Submission) regulations, with a minimum of IDR 2.5 billion for most sectors. However, specific hospitality sub-sectors may carry additional requirements or restrictions depending on the region and business scale.
The establishment process involves registration through the OSS system — Indonesia's integrated online licensing platform — followed by obtaining a NIB (Nomor Induk Berusaha, or Business Identification Number), sector-specific licenses, and local permits including the IMB (building permit) or its successor PBG, and environmental clearances (UKL-UPL or AMDAL depending on scale). In Bali, Zoning regulations under local spatial planning (RTRW and RDTR) add a further layer of compliance, particularly given restrictions on development in designated green zones and sacred buffer areas.
Foreign shareholders in a PT PMA must also comply with the Indonesian Company Law (Law No. 40 of 2007), which requires a minimum of two shareholders, a board of directors, and a board of commissioners. Nominee arrangements — where Indonesian nationals hold shares on behalf of foreigners — are explicitly prohibited under Indonesian law and carry significant legal and financial risk.
The PT PMA remains the only legitimate pathway for foreign investors who want genuine control over a hospitality business in Bali. We see a persistent pattern among new investors who attempt to sidest
ep this structure — using nominee agreements, lease-only models dressed up as business ownership, or informal arrangements with local partners — and nearly all of them encounter serious problems withi
n two to five years. Indonesian authorities have sharpened enforcement significantly since 2022, and Bali's regional government has been active in auditing unlicensed or improperly licensed hospitality operations.
What many investors underestimate is the complexity layered beneath the company registration itself. Selecting the right KBLI codes at incorporation is not an administrative formality — it determines your licensing pathway, your foreign ownership cap, and your tax classification. Getting this wrong at the start creates costly corrections down the line, sometimes requiring full dissolution and re-establishment of the entity.
The good news is that the OSS system has genuinely improved processing times for compliant applications. A well-prepared PT PMA setup, with correct documentation and the right KBLI codes, can now be completed in four to eight weeks. The complexity is manageable — but only with proper legal and regulatory guidance from the outset.
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