Last reviewed: August 2026  |  Reflects the May 2026 Bali restrictions, the 2025 capital reduction, and the new business classification system.

How to Start a Business in Bali in 2026

Almost every guide to this online is now out of date, and not by a little. Between October 2025 and June 2026 the rules changed four separate times, and one of those changes closed most popular Bali business categories to foreign investors entirely.

If you have been quoted a plan based on Rp 10 billion paid-up capital, a low-risk registration issued in days, or the 0.5% small business tax rate, that advice describes a system that no longer exists.

Start here: is your business still open to foreigners in Bali?

In May 2026, at the Bali provincial government's request, 64 business classification codes were blocked to foreign investment companies in Bali and hardcoded into the national licensing system. This applies to Bali only. No expiry date has been set.

The blocked categories, grouped into the eighteen sectors named in the Governor's announcement:

• Star hotels under 6,000 m² building area
• Budget hotels (hotel melati)
• Owned or leased real estate
• Management consulting and industrial management consulting
• Car, bus and truck rental; motorbike rental
• Clothing, textile and food retail; mobile agricultural produce retail
• Other accommodation provision
• Drinking houses and cafés
• Traditional medicine shops; bespoke tailoring
• Stadium facilities, fitness centres, sports event promotion

Reportedly still open, because they sit in higher risk categories: restaurants and bars, medical spa, property brokerage, and hotels above 6,000 m². These now require verification by the central ministry in Jakarta, a physical site inspection, written procedures, competency certificates and an environmental undertaking. A process measured in months with no fixed timeline.

If you already have a company with an active code at your registered Bali location, you are unaffected. You cannot activate the same blocked code at a new Bali location.

The stated reasoning is worth knowing, because it tells you how applications are now being read. Bali took roughly 40% of all foreign investment company registrations nationally between 2021 and 2025, and close to half were registered under low-risk categories that bypassed review. The government concluded these were being used mainly as cheap visa-sponsorship vehicles and as cover for nominee arrangements, often with a virtual office address and actual activity that did not match the registered code.

The capital requirements, and why two numbers confuse everyone

The paid-up capital is your money, not a fee. It stays in the company. Since 2025 it must remain in the company account for twelve months, though it can be spent on fixed assets, construction, or operating costs consistent with the investment plan you filed. It does not have to sit idle.

The Rp 10 billion investment figure did not change, and the "per code, per location" detail catches people out. Three business activities across two locations multiplies the commitment accordingly.

One carve-out matters in Bali: for property development, sale and leasing, and for accommodation, the Rp 10 billion test includes land and buildings where the asset is a whole building or integrated complex. A single substantial property can satisfy it on its own.

Shareholders, directors and the company itself

• Minimum two shareholders. Individuals or companies. Both may be foreign, no Indonesian shareholder is required in sectors open to full foreign ownership.
• Minimum one director and one commissioner. Both may be foreign nationals, though in practice you need someone resident with a tax number to handle banking and filings.
• The single-shareholder company form is not available to foreign investment companies.

Licensing: what you actually apply for

Indonesia licenses by risk. Your classification code and business scale determine which tier you fall into:

The governing regulation was replaced in June 2025. Two changes are useful to know: if the authority misses its own service deadline, the licence is deemed approved; and environmental approval now runs in parallel with technical approval rather than after it.

Working against that, automatic issuance has been tightened. In Bali, applications now require verification by the regional authority, and a registration can be cancelled if it conflicts with spatial planning.

The classification codes were replaced in June 2026

Indonesia's business classification system was rebuilt at the end of 2025 and went live in the licensing and company registries on 15 June 2026, with migration completed by 18 June. Existing codes were converted automatically.

Practical consequence: any guide quoting the old codes is now wrong. Accommodation is a good example. The single hotel code was split by star rating, and villa and homestay now sit under different numbers than before.

Check your intended code in the current system before relying on any published list, including ours. The conversion table is published, but the mapping is not always intuitive.

Villa and accommodation: the structural trap

This deserves its own warning because it is the most expensive mistake in Bali.

Homestay (pondok wisata) is reserved for Indonesian citizens and small local businesses. A foreign investment company cannot hold it. Villa accommodation sits in the same reserved group.

So a PT PMA can lawfully own and lease property, but it cannot be the licensed short-stay operator. Structures that work separate the property-owning company from the licensed operator, or use a management-for-fee arrangement. Anyone who tells you a PT PMA can simply obtain a villa rental licence is describing something that does not exist, and since May 2026, owned and leased real estate is itself blocked to foreign companies in Bali.

Nominee companies: void, not merely risky

Holding shares through an Indonesian nominee is prohibited outright. The investment law forbids any agreement or statement that shares are held for and on behalf of another party, and declares such agreements void by operation of law, void from the outset, with no court action needed. The company law separately requires shares to be issued in the name of their actual owner.

The consequence is that you have no enforceable claim to the shares or to what they own. The provincial authority stated explicitly that the 64-code block was intended partly to make nominee schemes harder by closing the categories they most commonly used.

We look at the property side of this in more detail in our guide to leasehold and freehold in Bali.

Visas: the work permit system changed

The old work permit no longer exists. It was abolished under the Job Creation Law and replaced with a notification system. The sequence now is: file the foreign worker utilisation plan with the Ministry of Manpower, get approval, pay the compensation fund, notification issues, then the visa and stay permit.

The compensation fund is US$100 per position per month, paid in advance for the whole approved period.

The investor permit is widely reported to require shares worth Rp 10 billion held personally and recorded in the company deed. We could not confirm that figure against a primary immigration regulation, so treat it as the working assumption everyone applies rather than a verified rule, and note the obvious tension with a company that now needs only Rp 2.5 billion paid up. Confirm the current requirement before you structure around it.

Tax: the 0.5% rate is gone for companies

From 22 April 2026, ordinary companies, including foreign investment companies, lost access to the 0.5% final tax on turnover. It now applies only to individuals, single-shareholder companies and cooperatives. Businesses already registered under it may finish their remaining term.

What a company pays instead:

The stated reason for the change was businesses splitting themselves into multiple small entities to stay under the threshold. The new rules also aggregate an individual's turnover with that of their single-shareholder companies when testing it.

Dividends to non-resident shareholders are withheld at 20%, commonly reduced to 10-15% by treaty on filing the correct residence certificate.

Staying compliant after you launch

This is where foreign-owned companies in Bali most often come unstuck, and it is now the basis for revocations.

• Quarterly investment activity reports. A company meeting the Rp 10 billion threshold counts as large, so quarterly filing applies. Deadlines moved to the 15th of April, July, October and January.
• Monthly tax filings, instalments, employee withholding, withholding on services and rent.
• Annual corporate return by 30 April.
• VAT registration once turnover passes Rp 4.8 billion.
• Full bookkeeping, in Indonesian, in rupiah, retained in Indonesia for ten years. Mandatory regardless of size.
• Social security registration for both health and employment schemes once you have staff. Employer contributions to the employment scheme run roughly 6.2%-7.7% of wages depending on industry risk.

Sanctions for missed investment reports used to be warnings. Since June 2025 they include administrative fines, escalating to suspension and revocation. Hundreds of Bali companies had their registration revoked in 2025 for failing their investment commitments.

Realistic cost and timeline

Professional and government fees for a straightforward incorporation typically run in the region of Rp 30-50 million, with packages quoted anywhere from around US$1,700 to US$8,000 depending on sector and licensing complexity. Treat published figures cautiously. They come from firms selling the service and vary widely.

Two to four weeks was the standard timeline. That no longer holds in Bali. The remaining open sectors require central ministry verification and physical inspection, which takes months.

Our page on the cost of starting a business in Bali goes into the individual line items, and PT PMA setup costs covers the company formation side specifically.

Common questions

Can a foreigner own 100% of a company in Indonesia?

Yes, in sectors open to full foreign ownership, which is the default unless a sector is specifically restricted. You need at least two shareholders, but both may be foreign.

What is the minimum capital for a PT PMA in 2026?

Rp 2.5 billion paid-up, reduced from Rp 10 billion in October 2025, and it must stay in the company account for twelve months. Separately there is an investment commitment of more than Rp 10 billion per classification code per location, excluding land and buildings.

Can I still open a café or small hotel in Bali as a foreigner?

Not through a foreign investment company as of May 2026. Drinking houses and cafés, budget hotels and star hotels under 6,000 m² are among the 64 codes blocked in Bali. Restaurants and bars are reportedly still open but now require central verification and site inspection.

Does a PT PMA still get the 0.5% tax rate?

No. From 22 April 2026 ordinary companies lost eligibility. A company pays 22% corporate tax on net profit, with an effective 11% on the portion of profit attributable to the first Rp 4.8 billion of turnover.

How long does it take to set up now?

Two to four weeks was normal before 2026. In Bali, the sectors still open to foreign investment need central ministry verification and a physical inspection, so plan in months rather than weeks.

Where to get this checked

The single most valuable thing to do before spending anything is to confirm that your intended activity is still available to a foreign company at your intended Bali location, under the current classification system. That one check has saved several of our clients from committing capital to a structure that could not be licensed.

We advise on company formation, classification and licensing, investor and work permits, and ongoing compliance in Bali. If you are at the planning stage, tell us what you want to do and we will tell you whether it can be done.

General information on Indonesian law as at August 2026, not legal advice. This area changed four times between October 2025 and June 2026 and continues to move. A replacement regulation on investment business fields is in the government's legislative programme. Verify current requirements before acting.

Sources

• Permen Investasi/BKPM No. 5/2025, capital requirements, twelve-month lock-up, reporting deadlines
• PP No. 28/2025, risk-based business licensing (replaced PP 5/2021)
• Peraturan BPS No. 7/2025, the 2025 business classification system
• Perpres No. 10/2021 as amended by Perpres No. 49/2021, investment business fields
• Bali Provincial Government announcement, July 2026, 18 sectors closed to foreign investment
• PP No. 20/2026, removal of the 0.5% final turnover tax for companies
• UU No. 25/2007: Article 33 (nominee share arrangements void)
• UU No. 40/2007. Articles 7, 48 (shareholders and share registration)
• PP No. 34/2021, replacement of the foreign worker permit with notification