How to Establish A Bali Tech Startup

Are you ready to tap into Bali’s growing tech ecosystem? Bali offers startup entrepreneurs access to a rapidly growing digital market, a dynamic talent pool, and cost-effective operations and incentives—all set against a unique cultural backdrop. This guide breaks down the essential steps to establishing your Bali tech startup, from understanding governmental initiatives and tax incentives to choosing the right visas.

Overview of the Tech Industry in Bali

As Indonesia’s digital economy heads toward a projected $130 billion by 2025, Bali is carving out a significant role in high-growth sectors like tourism technology, fintechs, and creative digital services. Thus, the island is emerging as a hub for startup growth, driven by a thriving community of tech entrepreneurs, digital nomads, and innovators. 

The region is comprised of ample infrastructure allowing your startup to maximize its resources. This includes a network of coworking spaces designed to foster productivity, collaboration, and access to mentorship programs that can provide valuable guidance for scaling your business. Bali’s dynamic startup community also opens doors to partnerships and innovation in some of the fastest-growing sub-industries, including:

• Sustainable Tourism
• AgriTech and Organic Farming
• Property Technology (PropTech)
• Clean Energy
• Food and Beverage Innovation

Initiatives and Benefits for Setting Up A Bali Tech Startup

Benefits of using Bali as a Launchpad for Your Tech Startup

The Indonesian government has introduced a range of initiatives to promote tech startups and attract foreign investment in Bali. Key benefits and incentives for startup companies operating in the region include:

• Bali Tech Park: The government is developing a state-of-the-art tech park, offering modern infrastructure, coworking spaces, and other incentives to attract and support tech companies in Bali. This makes it easier for you to set up and grow your businesses with access to cutting-edge resources.

• Cost-Effective Operations: Compared to major startup hubs, Bali offers a significantly lower cost of living and business operations, enabling you to maximize your capital and direct resources toward innovation and growth rather than overhead.
• Modern Co-Working Ecosystem: Bali’s network of modern co-working spaces brings together tech founders, digital nomads, and innovators, creating a collaborative environment to share ideas and drive innovation.
• Increased Access to Top Talent & Strategic Networking: With regular tech events, industry conferences, and a strong local community, Bali offers opportunities to connect with experts, investors, and potential partners who can accelerate your startup’s growth.

Governmental Startup Incubation Programs

In collaboration with the private sector, these programs offer funding, mentorship, and networking opportunities to help tech startups succeed. The funding initiatives include:

• Startup Studio Indonesia (SSI): Backed by the Indonesian Ministry of Communication and Informatics, SSI is an accelerator program that has helped its alumni raise USD 65.8 million in funding. SSI targets startups in the pre-Series A funding stage or earlier, with at least six months of traction and a consistent month-on-month growth rate of 5% or more.
• Startup4Industry: This initiative by the Indonesian Ministry of Industry aims to accelerate startups as technological solution providers. The program organizes a competition to implement technological solutions in the manufacturing and services industry. It offers funding to 20 finalist startups up to IDR 800,000,000. The top 5 startups receive IDR 100,000,000 for project implementation.

Available Tax Incentives for A Bali Tech Startup

If you want to start a tech startup in Bali, the Indonesian government offers various tax incentives. These benefits are designed to help your business reduce costs and thrive in Bali’s growing tech ecosystem. The key tax incentives are:

• Reduced income tax rate of 0.5% on gross revenue for the first 3 years of operation, provided annual revenue doesn't exceed IDR 4.8 billion.
• 50% corporate income tax reduction for investments between IDR 100 billion and IDR 500 billion for 5 years.
• 100% corporate income tax reduction for investments over IDR 500 billion for 5-20 years.
• Value Added Tax (VAT) exemptions for small businesses with annual revenue below IDR 4.8 billion

Emerhub’s local tax experts can help you ensure compliance with local regulations for your startup. We’ll handle tax registrations, monthly filings, and financial reporting while helping you identify and take advantage of available tax benefits. By optimizing your returns and managing the details, we allow your startup to focus on growth and success.

How to Set Up A Bali Tech Startup

Establishing Your Startup’s Legal Entity in Bali

Setting up a tech startup in Bali requires careful planning and adherence to local regulations to fully benefit from available incentives and succeed in the region's competitive tech industry. Emerhub’s team of local experts are here to guide you through every step of the process:

1. Establish A PT PMA (Limited Liability Company) 

The first step in establishing a PT PMA (Foreign-Owned Limited Liability Company) in Indonesia is to reserve a business name. In addition to the name reservation, it is necessary to prepare the required documents for incorporation. These documents typically include:

• Business Plan – outlining your company’s objectives and operations.
• Articles of Association – detailing the company’s structure and operational rules.
• Director and Shareholder Identification – copies of passports for foreign directors and shareholders.
• Proof of Address – for both directors and shareholders.

1. Register Through the Online Single Submission System (OSS) 

After gathering all the required documents, the application is submitted through the Online Single Submission (OSS) system. This platform allows businesses to obtain a Business Identification Number (NIB) and the required operational licenses. Our experts will ensure all documents are correctly submitted and compliant with Indonesian regulations.

1. Open A Corporate Bank Account

Once your company is registered, the next step is to open a corporate bank account. This is essential for managing your financial transactions and ensuring compliance with tax obligations. We will assist you in selecting a suitable local bank and completing the necessary paperwork.

1. Secure Office Space

To establish a physical presence in Indonesia, it is necessary to secure an office space. This can be done through leasing or by utilizing coworking spaces, which are popular with tech entrepreneurs for their flexibility and networking opportunities. We will assist you in finding and securing the right office space to suit your needs.

Choosing The Right Visa for Your Startup Activities in Bali

After planning your startup registration in Bali, the next step is to decide on the best approach to relocate and work within the startup sector in Indonesia. As such, you will need to acquire an appropriate visa or a KITAS (stay permit) based on your planned business activities on the island:

• Business Visa: This is for tech entrepreneurs in the early stages of exploring business opportunities by attending meetings and networking with others. It is valid for 60 days and is extendable but it does not allow you to generate income in Indonesia.
• Investor KITAS (E28A): For tech entrepreneurs planning to invest and start a business in Bali. This KITAS does not require a separate work permit but has a minimum investment requirement of IDR 10 billion (~USD 70,000).

Emerhub simplifies the visa application process for tech entrepreneurs looking to establish their tech startups in Indonesia. We guide you through selecting the right visa, handling all necessary documentation, and ensuring compliance with local immigration laws, enabling you to start your business with confidence.

Looking to start your tech startup in Bali? Simply complete the contact form, and our business advisors will connect with you to help get things moving.