Bali Tightens Rules for Foreign Businesses: What Investors Should Prepare For
A serious discussion has begun in Bali regarding the revision of operating conditions for foreign companies. The provincial authorities have submitted a proposal to the Ministry of Investment to restrict PT PMA access to several business activities that are currently widely used by expatriates.
If approved, Bali will become the first region in Indonesia where certain types of activities are formally closed to foreign capital.
Behind the public statements lies a much more systemic process — and it goes far beyond motorbike rentals or villa leasing.
Which Business Sectors Are Affected
The focus is on limiting the use of certain KBLI codes (classification of economic activities) for foreign investors. Among the discussed are:
KBLI 68111 — previously widely used for villa-related activities (currently already banned);
KBLI related to motorcycle rentals;
KBLI 70209 — other management consulting services;
a number of other areas, including services traditionally associated with small tourism businesses.
If the changes are approved at the Ministry of Investment level, the OSS (Online Single Submission) system will simply stop registering new licenses for these codes for PT PMA in Bali. This applies specifically to companies with foreign capital (PT PMA). For local companies (PMDN), such areas may remain open.
What Is Behind the Reform
From a formal perspective, the state speaks of 'investment quality.' In practice, the main focus now is fighting fictitious structures and nominal schemes.
This week, a Legal Indonesia specialist participated in an explanatory program at BKPM (Badan Koordinasi Penanaman Modal) — the central body overseeing investment and licensing. According to her, the tone of the meeting was extremely clear:
"The main attention is now paid to companies that are formally registered but do not actually operate. This especially concerns PT PMA with virtual offices and investments below the established minimum — 10 billion IDR per KBLI. Such structures are under heightened scrutiny."
Control is initiated at the Jakarta level, and Bali is considered the region with the highest concentration of such companies.
Virtual Offices: What Is Changing
The issue of registration addresses was discussed separately. The state clearly outlined its position: a virtual office cannot be used as a permanent business location without actual activity. Its permissible function is as a mailing address for correspondence.
If a company has a real project — even a land plot without development — this address must be registered in the OSS system as the place of activity.
It was emphasized at the meeting that discrepancies between the registered address and actual activity will be checked.
Minimum Investment Requirements and Risks for PT PMA
Let's recall that there is a requirement for PT PMA: at least 10 billion IDR investments per declared activity code. In practice, situations where:
multiple KBLI are declared,
investments are distributed formally,
confirmation of actual investment is absent,
activity in the declared direction is not conducted.
According to information voiced at the meeting, a database of companies is now being formed where declared indicators do not meet the requirements. Possible consequences include official warnings, suspension of licenses, and in some cases, the transfer of information about investors to immigration authorities. This is no longer a theoretical scenario but a working process that has been launched.
Why Bali Is a Special Case
Bali remains one of the most attractive regions for foreign investment, especially in tourism and real estate. Last year's total investments on the island exceeded 40 trillion rupiah. The majority of monetary investments are concentrated in the southern areas — Denpasar, Badung, Gianyar, Tabanan — with a significant portion in real estate and tourism services.
In these areas, schemes with nominal owners, capital splitting, and registration 'for projects' that were never implemented were most actively used.
Now, control is being systematically strengthened. Checks cover not only the existence of an OSS license but also the compliance of declared data with the actual situation: capital, business address, actual investments.
What This Means for Entrepreneurs
For entrepreneurs, this is not a complete ban on working in Bali. It is a transition to stricter compliance checks.
It makes sense to audit the company's structure now if your company has:
several KBLI without confirmed investment volume,
a virtual office used as the sole address,
actual activities differ from declared ones.
Not only the presence of an OSS license is important, but also the compliance of declared data with the real situation: capital, business location, investment volume, and permitted activity type.
We do not recommend waiting for the official approval of restrictions. In a situation where control is centrally strengthened from Jakarta, a reactive position may be too late.
Conclusion
The situation around KBLI and foreign business in Bali is not a targeted ban on motorcycle or villa rentals. It is a broader reform aimed at clearing the market of fictitious structures and bringing investment activities in line with established requirements.
In 2026, those who will succeed will not be those who registered a company faster, but those who structured it correctly from the start.
If you have an existing PT PMA or are planning to enter the Bali market, we recommend assessing risks in advance and checking the compliance of your structure with current regulatory requirements. Under current conditions, this is not over-caution — it is a necessity.
