Business Opportunities in Bali: New Positive Investment List

The new positive investment list in Indonesia opens up several new business lines to 100% foreign ownership that are especially attractive to foreigners looking to business in Bali.

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business lines in Bali

A new Positive Investment List was published by the Indonesian government in February 2021 opening up new business opportunities in Bali that are especially attractive to foreign investors. 

Businesses in trade, hospitality and tourism in particular play a major part in Bali’s expatriate and tourist led economy. Several of these business lines were reserved for 100% local ownership and in some cases allowed only partial foreign ownership in Bali. Many of these business lines are now open to 100% foreign ownership. Read on to find out which business lines have been affected and how the latest legislation has changed company set up requirements in Indonesia. 

Business opportunities in the hospitality industry

As a tropical paradise island with a large population of expats, Bali holds profitable business opportunities in the hospitality industry all year round.

Business Classification with Foreign Ownership in BaliOld regulation – Allowed % of foreign ownershipNew regulation – Allowed % of foreign ownership
Spa51%100%
Golf course67% or 70% (ASEAN)100%
Art Gallery67% or 70% (ASEAN)100%
Performing Arts Activities67% or 70% (ASEAN)100%
Table showing the hospitality based business lines that are now open to 100% foreign ownership.

Business opportunities in the trade industry

Trade and distribution were heavily restricted before the pandemic. The new positive investment list has opened up business lines, some that were previously completely banned from foreign investment, to 100% foreign ownership in Bali.

Foreigners now have the opportunity to import goods and distribute them in their own shops in Bali with full ownership. These changes will have a significant impact on the retail industry opening up more commercial shopping businesses to foreign investors.

Business Classification with Foreign Ownership in BaliOld regulation – Allowed % of foreign ownershipNew regulation – Allowed % of foreign ownership
Department Store (47191)0% or maximum 67% if a special license from the Ministry of Trade is issued100%
Supermarket (47111)0% 100%
Distributor67% 100%
Warehousing (52101)67%100%
Property Broker (68200)0% 100%
Commission Agent (46100)0% 100%
Retail Store, unless specifically limited categories0% 100%
Table showing the trade based business lines that had restrictions on foreign ownership but are now open to 100% foreign ownership.

Business opportunities in the tourism industry 

The main contributor to Bali’s GDP is tourism. Several business lines in this industry were reserved for locals, but the latest update to the positive investment list opens up more opportunties to foreign investment. 

Business Classification with Foreign Ownership in Bali Old regulation – Allowed % of foreign ownershipNew regulation – Allowed % of foreign ownership
Travel Bureau67% or 70% (ASEAN)100%
Catering and Catering Services67% or 70% (ASEAN)100%
Two-star hotel67% or 70% (ASEAN)100%
Exploitation of natural tourism objects outside of conservation areas67% 100%
Advertising51% (ASEAN)100%
Organizing Meetings, Incentives, Conferences, and Events (MICE)67% or 70% (ASEAN)100%
Table showing the tourism-based business lines that had restrictions on foreign ownership but are now open to 100% foreign ownership.

Changes to accommodation business lines in Bali 

Not all the changes made to Indonesia’s investment laws have been favourable to foreign investment. Business opportunities in Bali’s accomodation lines are now more restrictive.

These changes restrict small accommodation based business lines (Usaha Mikro Kecil Menengah, UMKM) to Indonesian individuals meaning both Indonesian and foreign-owned limited liability companies can no longer register these businesses in Bali. 

Business Classifications with new limitations to foreign ownershipOld regulation – Allowed % of foreign ownershipNew regulation 
One-Star Hotel67%Reserved for micro-, small- and medium- sized Indonesian enterprises
Non-Star Hotel/Hotel Melati67%Reserved for micro-, small- and medium- sized Indonesian enterprises
Motel/Guest House70% (ASEAN only) or 67% Reserved for micro-, small- and medium- sized Indonesian enterprises
Villa100%Reserved for micro-, small- and medium- sized Indonesian enterprises
Table showing the accommodation business lines that now have restrictions on foreign and company ownership.

If you want to start a business running small accommodation rentals in Bali, there are alternative classifications that can be used. To find out how foreigners can run an accommodation business with a villa, non-star hotel, motel or guest house, read  A Guide to Renting out Villas in Bali as a Foreigner. 

Requirements for setting up a business in Bali 

The process for setting up a company in Bali remains mostly the same. There have been no changes to the capital requirements for opening a company or to the company structure of businesses with foreign ownership in Bali. 

Here are a few resources on company setup that remains largely unchanged by the latest legislation. 

Depending on the business classification, there may be additional licenses required to open your business. The licensing office in Bali is in the process of implementing the local regulations on which business classifications require additional licenses and the requirements for each license. 

Requirements for investor and work permits (KITAS) 

One change to company set up requirements lies in the need for a location permit. Most business lines now no longer require a location permit otherwise known as a company domicile (Surat Keterangan Domisili Usaha, SKTU) to set up a company. This licence is now only required if your company wants to apply for working stay permits for its employees. 

The sponsorship of investor work permits (investor KITAS) does not require a location permit. However, you will still need to register your company to an address that has the building permits required for your business functions. Depending on the business activities, a virtual office is sufficient for setting up a company and acquiring an investor work permit (KITAS). 

Want to take advantage of the new investment opportunities in Bali? Get in touch with one of our consultants. 

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