How to Start a Business in Bali – A Complete Legal Guide for Foreign Entrepreneurs
Set Up Your Dream Business in Bali with Confidence
Bali is one of the most attractive destinations in Southeast Asia for foreign entrepreneurs. Its thriving tourism sector, growing digital economy, and vibrant culture make it a prime location to launch a business. Whether you’re looking to open a café, start a travel company, establish a wellness retreat, or launch a tech startup, understanding how to start a business in Bali legally is essential.
At The Bali Lawyer, we are a Bali-based law service helping foreign individuals and companies navigate the legal process of starting a business in Indonesia. We guide you through every step—from business registration to licensing—ensuring full compliance with Indonesian laws.
Why Bali Is a Top Destination for Business
Bali offers a unique blend of opportunity and lifestyle. Entrepreneurs are drawn to the island for several reasons:
High tourist traffic all year round
Affordable cost of living and business operation
Booming hospitality, wellness, and creative industries
Growing infrastructure for digital and remote work
Friendly business climate for international investment
Despite its advantages, setting up a business in Bali involves strict legal procedures and foreign investment regulations. Without proper legal support, you risk non-compliance, delays, or operational setbacks.
Understanding the Legal Landscape for Foreign Business Owners in Indonesia
Foreigners are not allowed to open a business in Bali as individuals under their personal name. To operate legally, foreign investors must establish a recognized legal entity. The most common and secure option is forming a PT PMA (Foreign-Owned Company). This structure allows foreign nationals to have shares in the company and operate within a regulated framework.
What Is a PT PMA (Foreign-Owned Company)?
A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the official legal entity through which foreign investors can start and run a business in Indonesia. It is regulated by the Indonesian Investment Coordinating Board (BKPM) and allows you to:
Legally conduct business activities in Bali
Own shares in the company
Sponsor foreign employees (including yourself)
Apply for a business visa or work KITAS
Lease property in the company’s name
Open an Indonesian bank account
Establishing a PT PMA is the only legitimate way for foreign entrepreneurs to run a business independently in Indonesia. Other options, such as using nominee arrangements, may carry significant legal risks and are not recommended.
Steps to Start a Business in Bali Legally
Starting a business in Bali requires following a structured legal process. Our legal team at The Bali Lawyer offers complete assistance throughout each of the following steps:
1. Business Consultation and Planning
We begin by helping you define the type of business you want to establish. We assess whether your business category is open to foreign investment and help you choose a legal business classification that aligns with your goals.
2. Company Name and Legal Structure
You must choose a unique name for your company and confirm its availability. Our team will then register your company under the PT PMA structure, preparing all necessary legal documents.
3. Deed of Establishment
The next step is drafting and notarizing the Deed of Establishment, which includes the company’s Articles of Association. This must be approved by a local notary and submitted to the Ministry of Law and Human Rights.
4. Company Domicile Letter
You must provide proof of a physical address for your business. This can be a commercial office or registered business space. We help you obtain the official domicile letter from local authorities.
5. Tax Registration (NPWP)
Every company in Indonesia must have a Tax Identification Number (NPWP). We handle the registration process and ensure your business is set up to comply with local tax obligations.
6. Business Identification Number (NIB)
Your company must be registered with the Online Single Submission (OSS) system to receive an NIB, which serves as the company’s business license and registration number.
7. Sector-Specific Licenses (if required)
Depending on your business activity (e.g., hospitality, tourism, import/export), you may need additional operational permits. Our legal team assists in obtaining all required sector-specific licenses to ensure your business is fully authorized to operate.
8. Work Permits and Visas
Once your PT PMA is established, you can sponsor your own KITAS (limited stay permit) and those of foreign staff. We handle the work permit application, ensuring you and your team can live and work in Bali legally.
Business Sectors Open to Foreign Investment in Bali
Indonesia regulates which sectors are open to full or partial foreign ownership. While many industries are accessible, certain business categories have ownership limits or special requirements. Common sectors open to foreign investment in Bali include:
Tourism and hospitality (hotels, villas, travel agencies)
Food and beverage (restaurants, cafés, bars)
Wellness and fitness (spas, yoga studios, retreat centers)
Creative and digital industries (marketing, tech, e-commerce)
Education and training centers
Import/export and trading businesses
We conduct due diligence on your chosen business activity to ensure it meets current foreign investment regulations and qualifies under BKPM guidelines.
Benefits of Setting Up a PT PMA in Bali
Setting up a PT PMA gives you a legal and professional presence in Indonesia. Key advantages include:
Legal Ownership: You can directly own shares and control your business.
Business Stability: Operating under the correct structure protects your business from legal complications.
Investment Protection: Your rights as a foreign investor are legally recognized.
Visa Sponsorship: You can sponsor yourself and your employees for long-term legal stay permits.
Access to Services: You can open a business bank account, sign contracts, lease property, and register for utilities in the company’s name.
Common Mistakes Foreigners Make When Starting a Business in Bali
Many foreign entrepreneurs try to bypass the legal requirements by using local nominees, opening businesses under friends’ names, or working on tourist visas. These shortcuts often result in serious legal consequences, including:
Loss of control over business assets
Exposure to legal disputes
Inability to obtain valid work or stay permits
Business closure or fines from immigration and tax authorities
To avoid these issues, always work with a registered legal team that ensures your business is fully compliant with Indonesian law.
Ongoing Legal Responsibilities After Setup
After establishing your PT PMA, your business must continue to comply with Indonesian regulations. These include:
Submitting annual tax reports and financial statements
Maintaining up-to-date licenses and business permits
Renewing stay permits and work authorizations
Meeting labor law and employment standards
Keeping proper corporate records
At The Bali Lawyer, we provide ongoing legal support and corporate advisory services to ensure your business stays compliant, protected, and ready to grow.
Why Choose The Bali Lawyer?
We are a trusted law service based in Bali, committed to helping foreign investors launch and manage their businesses legally in Indonesia. Our services are built on transparency, legal accuracy, and personalized support. We combine local expertise with international business insight to help entrepreneurs succeed in Bali’s dynamic environment.
With The Bali Lawyer, you receive:
Professional legal consultation
Complete business registration services
Immigration and licensing support
Timely updates on regulatory changes
Reliable legal representation in Bali
Make Your Business Dream in Bali a Reality
Starting a business in Bali is an exciting journey, but it requires careful planning and legal precision. Don’t risk your investment by cutting corners or relying on unverified advice. Work with experienced legal professionals who understand the process and can protect your business from the start.
Let The Bali Lawyer guide you through every step of starting your business in Bali—from initial planning to final approvals. We provide all the legal services you need to establish, operate, and grow your business legally and successfully.
Get in Touch with The Bali Lawyer Today
If you’re ready to start a business in Bali or need expert legal advice, contact The Bali Lawyer. Our legal team is here to help you make your business vision a reality in Indonesia.