Why an Inactive Company in Indonesia Is a Risk
A young entrepreneur from Europe moved to Bali with the idea of “settling down.” He didn’t have a real business or a solid plan — but he did have friends who had already obtained a KITAS by setting up a PT PMA and claimed it was easy.
He registered a company, deposited the minimum "investment" capital into the account, submitted the documents for the visa, and received the coveted investor KITAS. But the business never actually got off the ground.
No office was opened
No employees were hired
No activity under the declared KBLI codes
Zero reports filed
No BPJS insurance
No taxes paid
“It’s just a way to stay on the island,” he thought of his company.
An Inspection Reveals the Risks
A few months later, the immigration and labor authorities took notice. It was a routine check targeting fake investor visas — a type of immigration raid that has become increasingly common over the past year.
The inspection revealed:
No actual business activity
No tax or insurance payments
No business correspondence, invoices, or orders
Zero financial reporting for several quarters
This gave grounds to declare the company fake — and the KITAS issued on its basis invalid.
What Happened Next
The company was declared fraudulent
All licenses were revoked, and the KITAS was canceled
The entrepreneur was questioned, deported, and banned from reentering the country
In recent years, Indonesia’s immigration and tax authorities have intensified scrutiny of companies opened by foreigners. Special attention is given to those with no financial turnover, no employees, no activity under declared KBLI codes, and repeated zero reporting.
A “formal setup” can lead to real problems. Even if your visa is approved, it doesn’t mean no one will check how your company actually operates.
What to Do Instead
Today, there are legal and simpler ways to stay in Indonesia without creating fake entities:
Digital Nomad KITAS — an official 1-year residence permit with no renewals or visa runs
D12 Visa — available for 1 or 2 years
Family KITAS — for spouses and children
An investor KITAS only makes sense if you’re truly planning to run a business in Indonesia: hiring staff, submitting reports, paying taxes, and following regulations.
Otherwise, it’s better to choose another legal, clear, and safe route.
We can help not only with legal and secure visa solutions but also with:
Closing inactive or unprofitable companies
Switching from investor KITAS to Digital Nomad KITAS
Not sure if your current status is right for you?
Message us — we’ll help you avoid problems and find the best path forward.
