Starting a Business in Bali? Here’s What Foreign Entrepreneurs Need to Know

Bali isn’t just a destination for vacationers—it’s become a haven for digital nomads and lifestyle entrepreneurs seeking a balanced life. With its low cost of living, high quality of life, strong creative ecosystem, and growing remote work culture, Bali presents the perfect backdrop for building passion-driven businesses.

Whether it’s a surf retreat in Canggu, a vegan café in Ubud, or a sustainable fashion brand in Seminyak, the island continues to attract foreigners looking to turn their lifestyle into a livelihood.

Key Takeaways

• Bali is a prime destination for lifestyle businesses in F&B, wellness, creative services, and tourism.
• Foreign investors must meet strict requirements to set up a PT PMA, including a minimum IDR 2.5 billion paid-up capital.
• Each business activity must be registered under a KBLI code, and combining multiple codes requires a proportional investment plan.
• Some business sectors restrict foreign ownership, requiring careful legal structuring.
• Common myths—like “foreigners can’t be directors” or “PT PMA pays higher taxes”—are false.

Popular Lifestyle Businesses in Bali

Foreign entrepreneurs are often drawn to businesses in these sectors:

• Food & Beverage: Cafés, restaurants, food trucks, bars, cooking classes
• Wellness & Spiritual Services: Retreats, yoga studios, personal coaching
• Short-Term Rentals: Villas, guesthouses, co-living spaces
• Recreational Services: Surf schools, diving operators, tour agencies
• Creative Services: Photography, content creation, digital marketing
• Fashion & Export: Clothing, jewelry, handicrafts

While these businesses seem simple in concept, the regulatory framework behind them can be surprisingly complex.

Common Challenges for Foreign Business Owners

1. Capital & Investment Requirements

To establish a foreign-owned company (PT PMA), you need:

• Paid-up capital of IDR 2.5 billion
• Total investment plan of over IDR 10 billion

This threshold can be a dealbreaker for small-scale lifestyle businesses.

2. KBLI Limitations

Indonesia requires you to declare your business activities under specific KBLI codes.
Each KBLI requires a distinct investment plan. Combining unrelated codes (e.g., café + clothing export) may not be allowed, or could require a second legal entity.

3. Foreign Ownership Restrictions

Some industries—like domestic sea tourism—only allow up to 49% foreign ownership. In such cases, a local shareholder or alternative structuring (e.g. nominee arrangements) may be required, but must be handled cautiously to avoid legal risks.

Busting Common Myths About Doing Business in Bali

🚫 Myth #1: Foreigners cannot serve as company directors.
✅ Fact: Foreigners can be directors in both PT PMA and PT PMDN—so long as they meet immigration and corporate governance requirements.

🚫 Myth #2: PT PMA pays higher taxes than local companies.
✅ Fact: The corporate income tax rate is the same for PT PMA and PT PMDN—currently 22%, with no extra tax burden on foreign-owned companies.

You can read another article about tax here.

🚫 Myth #3: Using a local nominee makes incorporation faster and easier.
✅ Fact: Nominee arrangements are legally risky and do not speed up the process. Legal compliance and due diligence are the safer route.

🚫 Myth #4: Only PT PMA can hire foreign employees.
✅ Fact: PT PMDNs can also employ expatriates, though certain job positions—like HR or legal—are restricted under Minister Regulation No. 349/2019.

How Permitindo Helps You Set Up the Right Way

With so many legal, tax, and investment rules, setting up a lifestyle business in Bali can feel overwhelming. Permitindo has helped hundreds of foreign founders successfully incorporate companies across F&B, wellness, creative, and tourism sectors.

We provide:

• Full PT PMA Incorporation support
• Business classification guidance (KBLI codes)
• Tax & employment compliance assistance (BPJS, KITAS, THR)
• Strategic advice for combining multiple business lines

Let us help you get started legally, securely, and strategically—so you can focus on growing your dream business. Fill in the form below to start your consultation today.