How to start a Bali Lifestyle Business 

Despite Bali’s relaxed atmosphere, starting and running a lifestyle business involves serious and complex processes: local regulations and securing business permits that comply with building codes, environmental impact, and community safety. ​If you are looking to start a lifestyle business in Bali, this article will guide you through key legal requirements and local insights.

5 Bali Lifestyle Businesses to Start in 2024

Bali lifestyle businesses are an increasingly competitive niche market. As such, you must thoroughly research and prepare your market entry to increase your chances of success. Due to the island’s reputation as a lifestyle and wellness tourism destination, several types of businesses in Bali are recommended for foreign investors in 2024:

Tourism and Hospitality	Luxury villas, bungalows, and boutique hotelsTravel agency and tour operation
Recreational Activities	Surfing, diving, and golf clubs or courses
Creative and Artistic Ventures	Photography, videography, clothing and jewelry design, and handicrafts
Wellness and Health	Yoga retreats, top yoga studios, and meditation classesSpas offering holistic wellness and massage therapy
Food and Beverage	Café, restaurants, trendy bars, or cooking classes providing diverse dining experiences

Key steps for setting up a Bali Lifestyle Business 

Setting up a PT PMA foreign investment company 

For foreigners to conduct business in Bali, they must first set up an Indonesian legal entity. The PT PMA, which is a local term for a limited liability company, is the most common business type for foreign investors, as it allows up to 100% foreign ownership, as long as you meet the following requirements:

• You must have at least two shareholders;
  • You must also have a commissioner and a director, which can be each of the shareholders if you only have two;
• Minimum paid-up capital of IDR 2.5 Billion / ∼USD 150,000
• You must have a registered address in Indonesia (or a virtual address provided by Emerhub)
• You must apply for industry-specific permits/licenses

Emerhub can help you set up a PT PMA in Bali in just 1 to 2 working days via our comprehensive company registration service. Our local experts can also assist you in determining which types of licenses you may need depending on the specific type of Bali lifestyle business you plan on operating.

Obtaining a Spatial and Zoning Approval (KKPR)

The KKPR (Kesesuaian Kegiatan Pemanfaatan Ruang) refers to the mandatory spatial and zoning approval for your business. This digital permit confirms that your business, be it a café, boutique shop, wellness center, or co-working space, follows Bali’s regional land-use regulations. It serves as the official verification that your business is located in a designated commercial or tourism zone and meets all spatial requirements.

The KKPR is also important for foreign businesses as it provides legal protection in the event of conflicts with surrounding businesses or projects, which can occur in Bali. It demonstrates that your business has been vetted by the central government and has the legal right to operate on that specific plot of land. Operating without a valid KKPR can lead to administrative sanctions, fines, or business closure.

Emerhub can help you apply for the KKPR in Bali through our building permit application service. Once you have secured a SITU for your business, it is valid for 3 years and can be renewed upon reaching the end of the term.

Securing your Building approval Permit (PBG)

Are you considering building or renovating a property? Then you’ll need a Perizinan Bangunan Gedung (PBG), also known as a building approval permit. The PBG confirms that your planned construction or renovation aligns with Bali’s urban planning and zoning requirements. It also confirms that your project does not pose risks to the surrounding community.

The building approval permit is also necessary for demonstrating that the building is safe for customers and employees, which is especially important for public-facing lifestyle businesses. We should note that the PBG replaced the previous IMB (Izin Mendirikan Bangunan) and simplified the building permit process for foreigners. 

In some cases, you may also need to apply for a Sertifikat Laik Fungsi (SLF) which is a certificate of building function. This permit is necessary for residential and business buildings before accommodating occupants. To learn more about which building permits you need, take a look at our article on how to apply for the SLF and PBG certificates in Bali.

Overview of the most common business licenses required for Bali lifestyle businesses

To kickstart your foreign-owned Bali lifestyle business, you’ll need to get your business licenses. Having these licenses is crucial for operating legally and ensuring compliance with local regulations on the island. Below you will find the most common licenses for lifestyle companies operating in Bali, which Emerhub can help you apply for:

• Restaurant License: Necessary if you are operating a restaurant, café, or any establishment serving food and beverages. Also ensures that your business meets health, safety, and operational standards. You’ll need the correct restaurant business classification, known as KBLI-5610.
• Alcohol license: Allows your business to legally sell or serve alcoholic drinks. There are different types of alcohol licenses depending on the kind of alcoholic beverages you plan to serve:
  • SIUP MB (Surat Izin Usaha Perdagangan Minuman Beralkohol): Required if you sell alcoholic beverages.
  • IUTM-B (Izin Usaha Tempat Menjual Minuman Beralkohol): If you serve alcohol on your premises.
• Pondok Wisata: Also known as the homestay license, it allows you to legally rent out property to tourists in Bali. It is required for running a villa or guest house accommodation within a tourism zone. As a foreigner, you cannot directly apply for the Pondok Wisata but can obtain it through a local partner or under a PT PMA structure with specific conditions. It’s also an essential safeguard in Bali’s current regulatory climate for rental businesses.
• BPOM license: If your business involves food production or distribution, you will need to register with the BPOM (the Indonesian Food and Drug Control Authority). This license ensures that your products meet quality and safety standards in Bali.
• Import license: It is not uncommon for foreign-owned lifestyle businesses to want to import certain goods to Indonesia. The import license is essential for passing customs clearance as well as ensuring compliance with international trade regulations. 

Challenges and misconceptions of starting a Bali lifestyle business

Myths of doing a lifestyle business in Bali

Due to its popularity as a lifestyle hub, it is not surprising that over the years several myths have emerged about setting up a business in Bali. Below we’ve summarized the most common misconceptions about starting a Bali lifestyle business:

1. It’s Cheap and Easy: Although Bali is more affordable than many Western countries, starting a lifestyle business can add up significant costs, including real estate, permits, and operational expenses. It also requires dealing with local bureaucracy. 
2. Local Companies Pay Lower Taxes: The tax rates for businesses in Bali are the same regardless of whether you are locally owned or have foreign ownership. Corporate tax rates range from 11% to 22%. Additionally, lifestyle businesses like tourism, may have to pay specific taxes beyond the standard corporate tax​. 
3. Limited Market Potential: Bali’s market is diverse, and includes locals and a large expatriate community. The strong tourism sector offers many opportunities for innovative lifestyle businesses. 
4. A Foreigner Cannot Be a Director of a Local Company: There is no law prohibiting foreigners from being directors of local companies in Bali. A local business must have at least one director who is an Indonesian citizen, but other directors can be foreigners.
5. Local Companies Cannot Sponsor Work Permits for Foreigners: Local companies in Bali can sponsor work KITAS for foreigners. Sponsorship depends primarily on a company’s capital. Generally, the more capital your company has, the more work permits it can sponsor. 
6.  It’s Easy to Find Reliable Staff: Finding reliable staff can be challenging, especially in the hospitality and service sectors, which often experience high turnover rates. We recommend investing in training programs and creating a positive work environment.

While starting a business can be intimidating, with the right partner the process can be straightforward. Emerhub has local experts in all the key sectors in Bali. By partnering with us, you’ll have the means and experience to navigate all the complexities of business setup.

Navigating visa restrictions

Bali has strict visa regulations. The correct visa is important for opening and operating your business. Depending on the visa and the type of company you are setting up, you may need a work permit to start working. For long stays, you will need to apply for a KITAS (residence permit). These are generally issued for specific reasons, such as work, investment, or retirement.

If you are still in the preliminary phase of setting up a Bali lifestyle business, it is important to note that Bali does allow prospective investors to stay within the region for up to 180 days through the pre-investment visa. Through this stay permit, you can conduct market research as well as undertake certain preparation activities for your planned investment in Bali.

Emerhub can help you determine the right type of stay permit needed for setting up your Bali lifestyle business. Our local experts can also manage the application process in your stead to ensure that your visa is ready for when you intend to visit the country. We will also help you pay the Bali tourist tax before you come to the islands.

Language barriers and cultural differences

While English is widely spoken in tourist areas, Balinese is the local language. Communication can therefore be challenging for certain Bali lifestyle businesses. Balinese culture also has unique customs, traditions, and beliefs. As a foreigner, adjusting to these cultural differences can take time especially, if you plan on working in the service sector.

Emerhub has local advisors who understand the culture in Bali and can support you with all of your business needs. Whether you are setting up a property leasehold agreement, or navigating local taxation requirements for businesses, our team is ready to help you. By partnering with our experts, you can gain valuable insight into local practices and avoid potential pitfalls.

Want to set up a lifestyle business in Bali? Contact Emerhub via the form below and we’ll put you in touch with one of our local advisors to get you started!