Things to consider before starting a digital agency in Bali

The number of active social media users in Indonesia has grown by 20% in the last year, reaching 260 million users in 2022. This growth in social media users presents opportunities for businesses to engage in social media marketing to gain new customers, which in turn increases the demand for digital agencies.

This article offers comprehensive insights into establishing a digital agency in Bali, including competitor analysis, common myths, and an overview of the legal requirements involved.

Services offered by digital agencies in Bali

Bali is a social island. As opposed to other parts of Indonesia, the people in Bali focus more on socializing and using social media platforms when making business decisions. As a result, it is a prime market for companies to use social media platforms to win business.

Digital agencies in Bali offer a range of services to help businesses increase their online presence and gain customers. Some of the most common services provided by these agencies include social media marketing, SEO, PPC, content marketing, website design, and influencer marketing.

• Social media marketing This service involves developing social media strategies and content to drive engagement and sales on various social media platforms such as Facebook, Instagram, Twitter, LinkedIn, etc. 
• Search engine optimization (SEO) This service includes creating and optimizing a website’s content to improve its ranking in search engines like Google.
• Pay-per-click advertising (PPC) This includes managing paid advertising on platforms (such as Google Search) where companies are charged per click.
• Content marketing This service involves creating and sharing valuable content such as blog posts, videos, and podcasts to attract the target audience. 
• Website design and development This service involves creating and designing websites that are user-friendly, and optimized for search engines.
• Influencer marketing This is a form of marketing where brands collaborate with influencers to promote their products or services. 

Common myths about starting a digital agency in Bali

There are some myths related to the process of starting and operating a digital agency in Bali. These myths can cause confusion and uncertainty for investors planning to establish their own agency. Here are a few of them:

Myth #1: Foreigners can not fully own a digital agency in Bali

Foreigners can fully own and operate a digital marketing agency in Bali by establishing a foreign-owned company (PT PMA). The Indonesian government’s regulation No. 4 of 2016 allows foreigners to do so without any legal barrier. In particular, the business classification code for digital marketing agencies in Bali is KBLI 7310, which is explicitly listed as open to 100% foreign ownership. 

Myth #2: Foreigners must have local ownership to get business licenses and permits

To legally operate a digital agency in Bali, a business must obtain the necessary licenses and permits from the Indonesian government. 

The requirements for obtaining these licenses and permits vary depending on the type and location of the business. However, there is no requirement for the business to have local ownership to obtain these licenses and permits. Both local and foreign-owned companies can obtain the necessary licenses and permits to legally operate in Bali as long as they meet the requirements set by the Indonesian government.

Myth #3: Setting up a digital marketing agency in Bali is inexpensive

While it’s true that Bali has a lower cost of living compared to other major cities in Southeast Asia, setting up a digital marketing agency in Bali is still costly. Investors need to consider factors such as office space, equipment, salaries, and taxes. Additionally, foreign-owned companies are required to invest a minimum of USD 650,000 (IDR 10 billion) to establish their business in Indonesia. 

Myth #4: Having a local consultant to help set up an agency is not productive

While it’s not a legal requirement to have a local consultant to register your business, it is beneficial to have someone with local knowledge and connections to help navigate the bureaucracy and cultural nuances. A consultant like Emerhub assists with setting up your company, applying for the right visas for you and your team, finding an office space, hiring local staff, and understanding local business practices.

Myth #5: Foreign-owned digital agencies in Bali are exempt from paying taxes

While foreigners can establish a fully-owned digital marketing agency in Bali, they are still subject to Indonesian tax laws. As a foreign-owned company, investors are subjected to corporate income tax, value-added tax (VAT), and other taxes, such as employee social security contributions. 

Myth #6: Registering a company in Bali is enough to start making money

While it’s true that registering your business is an essential step in starting your digital marketing agency, it’s important to note that there are additional legal requirements before you start operating. You need to obtain the necessary licenses and permits, such as a business license and a work permit for any foreign employees. Failure to obtain these permits can result in fines, legal issues, and even deportation.

Emerhub assists you in starting a digital marketing agency in Bali by complying with all the regulations set by the government. 

Legal considerations for starting a digital agency in Bali

Starting a digital agency in Bali requires compliance with Indonesian law, including company registration and obtaining the necessary licenses. Investors need to determine the appropriate legal entity for their business, obtain a business identification number (NIB) through the Online Single Submission (OSS) system, and secure the necessary licenses to operate the agency.

Then, the investors, with the help of local consultants such as Emerhub, prepare the required documents, which include the company establishment deed and a tax registration certificate, and submit an application to the Ministry of Law and Human Rights for review. Upon approval, the MOLHR issues a certificate of incorporation, indicating that the digital agency is legally recognized and authorized to operate in Indonesia.

Start your digital agency with Emerhub

Emerhub provides a one-stop solution for investors looking to start a digital agency in Bali. Our experts help businesses comply with all the necessary regulations and obtain the required licenses and permits to operate legally in Indonesia.

Our team of experienced consultants also assists with business registration, tax compliance, accounting, and other administrative tasks. With our support, investors focus on developing their business strategies and serving their clients.

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