A Foreigner’s Guide to Setting Up a Company in Bali

Over the last few years, the business landscape in Bali has matured significantly. We are seeing a move away from small-scale lifestyle ventures toward more structured commercial operations in hospitality, real estate development, and professional services.

While market opportunities in Bali are abundant, the real barrier to entry is regulatory compliance. Indonesia has specific frameworks for foreign ownership (PT PMA) and business classifications (KBLI). If you are unaware of how to structure your business or the accurate KBLI as per your business plan, this can lead to operational delays or legal issues down the line.

In this article, we will walk you through the essentials of setting up a company in Bali as a foreigner. Mainly, we will cover the foreign ownership regulations, key requirements, and step-by-step process to help you set up and manage your business in compliance with local laws.

Understanding Foreign Ownership Limitations in Bali

Foreign ownership rules in Bali depend on how Indonesia’s KBLI system classifies your business activities. Each activity carries a category under the Positive Investment List, which defines whether foreign investors can fully own, partially own, or cannot enter that sector at all.

Misclassification is common: two services that look similar can fall under separate KBLI codes with very different ownership limits and licensing obligations.

The tourism services sector is a good example of that. A PT PMA can operate a licensed travel bureau, but activities such as guiding tours or managing small tourism vehicles fall under MSME-reserved classifications. These activities look related, but the KBLI system classifies them separately and applies different legal rules to each.

Below is a general view of how foreign ownership applies across Bali’s most common sectors:

Sectors Fully Open to Foreign Ownership	Regulated Industries	Restricted Industries
– Consulting, education, software, digital marketing – E-commerce and select online services – Property leasing and management firms. – Telecommunications and logistics (select activities)	– Restaurants, cafés, boutique hotels, wellness retreats – Construction consulting (high-tech/large projects) – Financial services, media, broadcasting – Travel agencies, telecom tower operations – Transportation services (domestic shipping, yachts, charters) – Postal and courier activities	– Basic travel agent/ticketing services. – Domestic passenger transport. – Gambling, narcotics, mining concessions – Forestry, weapons, and traditional herbal medicine – Activities involving coral, endangered species, or protected flora/fauna

Emerhub experts can help you identify the KBLI codes that best reflect your business activities. We’ll flag any limitations and ensure your PT PMA is set up without costly reclassifications down the line.

Preparations Before Registering A Foreign-Owned Business in Bali

A. Appropriate Legal Entity Structures in Bali for Foreigners

Before registering a business in Bali, it’s important to understand the main legal structures available to foreign investors. Indonesia recognises several entity types under the Indonesian Company Law (Law No. 40/2007 on Limited Liability Companies), the Investment Law (Law No. 25/2007), and sector-specific regulations issued by the Ministry of Investment (BKPM).

Several notable options include representative offices (KPPA, KP3A, and KPPA Migas) and nonprofit foundations (Yayasan), but they are generally limited in scope. They are typically used for market research, promotional activities, or social programs, and cannot generate revenue or sign commercial agreements. Because of these restrictions, they are rarely used for long-term business operations and serve more as temporary or purpose-specific setups.

In practice, foreign entrepreneurs who intend to operate commercially will establish a PT PMA (foreign-owned private limited company). It allows foreign shareholding and gives you the legal capacity to run a business: issuing invoices, signing contracts, leasing property, and hiring or sponsoring foreign staff. It is also the only entity structure designed to support full operational activity under Indonesia’s current investment framework.

B. Key Requirements for Setting Up Your PT PMA in Bali

To legally operate a business in Bali as a foreigner, you must establish a Perseroan Terbatas Penanaman Modal Asing (PT PMA). This structure allows you to own and manage up to 100% of a business in Indonesia while limiting your personal liability to the amount of capital you have invested in the company.

Here’s what you’ll need to set up a PT PMA in Bali:

• Shareholders and Company Structure: Must have at least two shareholders (who can be individuals or corporations), at least one resident director, and one commissioner as per Indonesian company law. The required resident director can be an Indonesian citizen or a foreigner holding the appropriate work and stay permits (KITAS).
• Minimum Capital: To qualify for a PT PMA license, a company needs a paid-up capital of at least IDR 2.5 billion (approximately US$150,000).
• Business Address: Must have a registered office address in Bali for tax compliance and business registration. Alternatively, Emerhub can provide you with a virtual office. Keep in mind that some types of businesses do not allow for virtual office addresses.
• Business Classification Number / KBLI: This is especially crucial. Each code ties to the maximum percentage of foreign ownership your business is allowed. It also assigns any additional requirements to activate your NIB if it is not a Low-Risk Business classification.

Emerhub offers comprehensive support in setting up a PT PMA in Bali. With a deep understanding of local regulations and requirements, our local team simplifies the process by handling all the legalities, paperwork, and compliance needed for your business.

Process of Setting up a Company in Bali

Setting up a PT PMA involves a series of legal and administrative steps that must be done in the correct order. The Online Single Submission (OSS) system has simplified much of the licensing process. However, you will still need to manage documents, classifications, tax registrations, and sector approvals across different government bodies.

Emerhub acts as your licensed local partner throughout this process, from name reservation to managing your filings and on-ground coordination with notaries and local authorities. 

The following overview outlines each stage of the company setup process and what you can expect at every step.

Step 1: Reserve Your Company Name in Bali and Determine Your KBLI Codes

Your setup begins with confirming the structure of your business: shareholders, directors, capital, and the specific KBLI activities you plan to carry out. Once these are defined, Emerhub will run a name check for your preferred company name and reserve it with the Ministry of Law and Human Rights (MOLHR). 

At this stage, your KBLI selection must be finalised, as it determines your foreign ownership eligibility and the sector approvals you will need to secure after incorporation.

Step 2: Incorporate Your Legal Entity with MOLHR

After your name and KBLI codes are confirmed, our experts can assist with the preparation of your Deed of Establishment. This document outlines your Articles of Association (AoA), shareholder structure, capital commitment, and full activity scope aligned with your chosen KBLIs. 

A public notary then formalises the Deed and submits it to the MOLHR for approval. Once approved, MOLHR issues your Decree of Establishment (SK Kemenkumham). This decree formally recognizes your PT PMA as a legal entity in Indonesia, allowing you to proceed with obtaining your business license (NIB).

Step 3: Register for a Corporate NPWM (Tax ID)

With your PT PMA incorporated, your company must register with the Directorate General of Taxes (DGT / Direktorat Jenderal Pajak) to obtain its corporate NPWP. 

The NPWP is issued through your assigned local tax office (Kantor Pajak), and this registration must be completed before your NIB can function as an active business licence. It confirms your company’s status in Indonesia’s tax system, required for banking, payroll, BPJS registration, and most operational filings. 

Step 4: Acquire Your Business Identification Number (NIB)

Once the DGT issues your NPWP, you can now proceed to obtain your NIB (Business Identification Number) through the OSS system. The NIB is a unique number that identifies your company profile in Indonesia. It also serves as:

• Primary business license (for low-risk KBLI companies)
• Your import license
• Customs Identification Number (NIK)
• Your business registry number 

To process the NIB, you’ll need to provide your MOLHR decree, notarised Deed of Establishment, shareholder IDs, and your corporate NPWP. Once issued, your PT PMA can officially: 

• Open a corporate bank account
• Sign contracts and issue invoices,
• Hire employees and register them with BPJS
• Access customs, if your activities involve imports
• Begin preparing your physical or operational setup.

At this point, most service-based PT PMAs, such as consulting, digital services, software development, branding, and other non-regulated sectors, can generally begin operating. These activities typically don’t require additional licences beyond the NIB.

Step 5: Secure Sector-Specific and Operational Licences

If your business operates in a regulated sector, you’ll have to complete additional operational licensing before opening to the public or hiring customer-facing staff. These licences confirm that your premises, zoning, and activity scope comply with Indonesian regulations. Depending on your sector, this may involve:

• PBG/SLF building-use compliance to ensure your premises are approved for commercial or tourism activity
• Zoning validation confirming your business is located in an area that permits your operations
• Hygiene and sanitation approvals for food, beverage, and wellness businesses
• Tourism classification or feasibility assessment for hotels, villas, cafés, tour operators, and retreats
• Environmental clearances (UKL-UPL or AMDAL) for companies with land, waste, or operational impact

To process these, you’ll generally need to prepare your NIB, NPWP, lease or office address, PBG/SLF documents (if applicable), zoning information, and sector-specific supporting documents.

How to Legally Work and Conduct Business in Bali

Registering your company does not automatically grant you the right to live or work in Bali. If you plan to reside in Bali and manage operations on the ground, you’ll need a valid stay permit and, in some cases, a work permit depending on your level of involvement.

The most common route for foreign business owners is the Investor KITAS. It allows you to live in Indonesia long-term and actively run your business, without needing a separate work permit. Other visa types, such as a Work KITAS or Remote Worker visa, may also be more suitable depending on your involvement and residency plans. 

For a deeper breakdown of available stay permits, see our Complete Guide to Work Permits in Bali.

Note that you cannot apply for an Investor KITAS if your PT PMA is not yet established. In this case, most investors use a Business Visa (B211A) while preparing their company setup, or they choose to incorporate the PT PMA remotely and apply for the Investor KITAS once the company is ready to sponsor them.

Emerhub’s relocation specialists can assess your eligibility and coordinate the full application process with the Ministry of Manpower, Immigration, and related government offices.

Most Popular Industries for Foreign Investors Setting up Business in Bali

Bali continues to welcome a flood of foreign investors, but the types of businesses that genuinely thrive here are shifting. Tourism-heavy sectors remain popular, yet they’re also the most saturated. New cafés, basic yoga studios, and villa rentals now compete with thousands of similar offerings— and many face stricter requirements for building-use permits (PBG/SLF), wastewater systems, and tourism classification. 

This doesn’t make lifestyle ventures impossible, but it does mean new entrants need a clearer concept and stronger compliance footing than before. Today, most investors see more traction in specialised, skills-based sectors, such as:

1. Digital & Consulting Services: Digital-focused businesses remain one of the easiest ways for foreigners to enter the Bali market. Fields like UX design, branding, software development, e-learning, and consulting typically allow full foreign ownership and don’t require a physical office. They also bridge a real gap in the local market, where many cafés, boutique hotels, and SMEs struggle to find consistent digital and creative support.
2. Eco-Tourism & Sustainability-Led Ventures: Interest in regenerative stays and conservation-led tourism has shifted toward regions outside South Bali. Tabanan and North Bali, for example, attract investors seeking larger land plots, calmer landscapes, and zoning that still supports nature-based tourism. Ubud and its surrounding villages remain an established hub for wellness concepts, though land availability and community oversight are much stricter today.
3. Property Investment: Bali’s property sector is still one of the most active entry points for foreign investors. Regions with growing infrastructure and steady tourism offer reliable rental performance, while Indonesia’s land-use system gives foreigners workable routes to participate. Most investors secure sites through long-term leases, and Right to Use (Hak Pakai) titles through PT PMA setup. These mechanisms give operational control and long-term security without crossing Indonesia’s freehold ownership restrictions.
4. Property Management: With more foreigners leasing villas or commercial spaces, most owners rely on management companies to manage the property on their behalf. These firms handle general maintenance work, tenants and housekeeping, and compliance tasks such as PBG/SLF checks and Banjar coordination. It’s especially common for short-term rental villas which require continuous maintenance and upkeep.
5. F&B and Wellness: These sectors remain viable but highly competitive, with closer regulatory scrutiny. Operators with niche concepts, regional cuisines, performance-based wellness, chef-driven dining, or hybrid cafés still find traction. And this is provided if your licensing, hygiene standards, and village-level permissions are handled correctly.

Streamline Your Company Setup and Compliance in Bali with Emerhub

Once your PT PMA is established, your compliance becomes an ongoing responsibility. You’ll have to manage monthly tax filings, BPJS registrations, payroll reporting, and keep your operational permits up to date. 

Emerhub experts in Bali offer end-to-end support to handle these obligations on your behalf. We’ll assist with your incorporation and remain involved throughout your operations in Bali, keeping your reporting, licensing, payroll, and tax obligations on track.

Speak with advisors who specialize in foreign company set ups in Bali today. Simply fill out the form below and we’ll put you in touch!