How to Open a Business Legally in Bali: Step-by-Step Guide for Foreigners

Bali is a dream destination not only for tourists but also for entrepreneurs. Its growing economy, vibrant culture, and supportive community make it an attractive place for foreign investors. Whether you’re planning to open a café in Ubud, start a digital agency in Canggu, or launch a retreat center in Uluwatu, understanding the legal process is crucial. Operating a business in Bali as a foreigner comes with its own set of rules, and doing it the right way helps you avoid fines, closures, or legal disputes.

This guide explains how to legally open a business in Bali, covering each step clearly. As a trusted legal service based in Bali, The Bali Lawyer has helped countless foreign investors start businesses safely and successfully. Let us help you do it right from the beginning.

Why Start a Business in Bali?

Bali offers a unique blend of tropical lifestyle and entrepreneurial opportunities. Here’s why many foreigners choose to start businesses here:

  • Growing market for tourism, wellness, hospitality, and digital services

  • Affordable startup costs

  • Access to skilled local talent

  • High demand for new concepts and international expertise

  • Strong community of entrepreneurs and digital nomads

But while the opportunities are exciting, starting a business in Bali without the proper legal foundation can lead to serious complications. Understanding Indonesian regulations and choosing the right structure is critical.

Can Foreigners Open a Business in Bali?

Yes, foreigners can legally open a business in Bali under Indonesian law. However, they cannot operate a business under a personal name or as a sole trader like in some Western countries. To legally run a business, foreigners must follow certain regulations and establish one of the following legal entities:

  • Foreign-Owned Company (PT PMA)

  • Representative Office

  • Local Nominee Structure (Not recommended due to legal risks)

Among these, the most secure and widely accepted structure for foreigners is a PT PMA, which stands for Penanaman Modal Asing (Foreign Investment Company). This structure allows full or partial foreign ownership, depending on the business sector.

Step-by-Step Guide to Legally Open a Business in Bali

1. Choose the Right Business Structure

The first and most important step is selecting the proper legal entity. For most foreigners, a PT PMA is the safest and most recommended structure.

Advantages of PT PMA:

  • Legal ownership under your name

  • Ability to sponsor work and stay permits (KITAS)

  • Import/export license eligibility

  • Full compliance with Indonesian regulations

Other options like local nominee arrangements carry high risks and are not recommended for serious investors.

2. Determine Your Business Sector and Activities

Indonesia’s business regulations are based on a list called the KBLI (Indonesian Standard Classification of Business Fields). Each KBLI code specifies what type of activities your company can legally perform.

Some sectors allow 100% foreign ownership, while others require local partnerships. We help you select the right KBLI codes and ensure your intended business is eligible for foreign ownership.

Popular sectors in Bali include:

  • Tourism and hospitality

  • Restaurants and cafes

  • E-commerce and tech

  • Wellness and yoga studios

  • Export/import and sourcing

  • Creative agencies and consulting services

3. Prepare and Submit the Company Name

You must register a unique company name with the Ministry of Law and Human Rights. The name must:

  • Be in Bahasa Indonesia or have local relevance

  • Not be identical or too similar to existing companies

  • Reflect the nature of your business

Once your name is approved, it will be reserved for your company.

4. Set Up the Legal Company Documents

To form a PT PMA, the following legal documents must be drafted and notarized:

  • Deed of Establishment (Akta Pendirian)

  • Articles of Association

  • Approval from the Ministry of Law and Human Rights

  • Company Tax ID (NPWP)

  • Domicile letter from your office address

These documents will serve as the legal foundation of your company.

5. Secure a Business License (NIB and OSS Registration)

The next step is to register your company with the OSS system (Online Single Submission), which generates your company’s NIB (Business Identification Number). This number is essential for operations, banking, and permits.

Through OSS, you’ll obtain:

  • NIB (Nomor Induk Berusaha)

  • Business licenses according to your sector

  • Risk-based permits, depending on activity and impact

The Bali Lawyer ensures your OSS registration is properly filed and approved.

6. Open a Corporate Bank Account in Indonesia

With your PT PMA officially registered, you can now open a corporate bank account in Indonesia. Requirements usually include:

  • Company deed and approvals

  • NIB and NPWP

  • Identification of company directors and shareholders

We assist in the application and documentation needed to open your account smoothly.

7. Inject the Required Capital

Indonesia requires PT PMAs to have a minimum paid-up capital of IDR 10 billion (approximately USD 650,000). However, this does not have to be deposited upfront in most industries, as the government now follows a “commitment-based” capital system. You’ll need to declare your intention to meet the capital and report on it over time.

We will guide you on how to declare and manage capital investment according to current regulations.

8. Obtain a Domicile Letter and Office Address

Your company must have a valid business address, either virtual or physical. Depending on your business type, a specific zone (commercial or mixed-use) may be required.

We can help you:

  • Find compliant office space or virtual address

  • Secure a domicile letter from the landlord or building management

  • Register the address with your company documentation

9. Apply for Work and Stay Permits (KITAS)

Once your company is legally established, you can sponsor yourself or foreign staff for a KITAS (limited stay permit). This is essential if you want to live and work in Bali as a company director or manager.

Types of KITAS we help process:

  • Investor KITAS

  • Director or Commissioner KITAS

  • Employee KITAS

You’ll also receive a tax number and be able to legally work and reside in Bali.

10. Hire Local Staff and Register with BPJS

If you plan to hire employees, you must comply with labor laws in Indonesia, including:

  • Offering minimum wages and benefits

  • Registering staff with BPJS (social security and health insurance)

  • Creating employee contracts in Bahasa Indonesia

We ensure your business is legally protected and in full compliance with labor laws.

11. Report Taxes and Submit Monthly Filings

Your company is required to submit monthly tax reports, even if there is no income. Tax obligations may include:

  • Corporate income tax

  • VAT (if applicable)

  • Employee tax and social contributions

We connect you with trusted accountants or handle your tax filings directly to maintain compliance.

Why Work with The Bali Lawyer?

Navigating Indonesia’s legal system as a foreigner can be challenging, especially when it comes to licensing, ownership laws, and compliance. That’s where we come in.

At The Bali Lawyer, we offer:

  • Full legal setup of PT PMA companies

  • Visa and KITAS sponsorship

  • Trademark and IP protection

  • Local nominee structure advisory (and safe alternatives)

  • Business compliance, tax, and HR consulting

Our team is fluent in English and Bahasa Indonesia, ensuring you have clear, professional support at every stage of your business journey.

Common Business Mistakes Foreigners Make in Bali

To avoid unnecessary risks, steer clear of these common mistakes:

  • Operating under a tourist visa

  • Using a local nominee structure without protection

  • Failing to register proper KBLI codes

  • Skipping business licenses or tax reports

  • Using residential addresses for commercial use

By working with a professional legal service like The Bali Lawyer, you’ll avoid these errors and stay fully protected under Indonesian law.

Start Your Bali Business the Right Way

Opening a business in Bali as a foreigner can be one of the most rewarding decisions you make—but it needs to be done properly. By following this legal process and working with a trusted partner, you’ll enjoy peace of mind and full control over your venture.

Let The Bali Lawyer guide you every step of the way—from company registration to permits, tax, and legal compliance.

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