Starting a business in Bali as a foreigner requires three things that are legally distinct and often confused: a company that may lawfully hold foreign equity — in practice a PT PMA — licences matched to the activities that company registers, and a stay permit that entitles you personally to be in Indonesia and to do whatever you intend to do there. Owning shares, holding a licence, and being allowed to work are separate questions with separate answers. This 2027 overview sets out the legal basics as general information, not legal, tax, or immigration advice.
Which entity may a foreigner actually own?
Indonesian company law permits foreign shareholding only through a PT PMA (Perseroan Terbatas Penanaman Modal Asing); a local PT designated PMDN cannot record foreign equity, and a CV is a partnership form not designed for foreign participation. This is the first fork in the road. The PT PMA is a full limited liability company that can hold assets, employ staff, sign contracts, invoice customers, and sponsor certain permits — while carrying reporting obligations lighter local forms do not.
What does the Positive Investment List actually decide?
The Positive Investment List sets out which business activities are open to foreign capital, which are open subject to conditions such as partnership requirements or minimum project scale, and which remain closed — and it does so by reference to KBLI activity codes rather than by industry in a loose sense. Your codes, not your business description, determine where you sit.
Many service, technology, and manufacturing activities are open to full foreign ownership. Several retail, small-scale, and culturally reserved activities are not. Because the list has been revised more than once, and because a single business plan often touches several codes, the check has to be done against your specific intended code set with a licensed adviser rather than assumed from a general statement. Founders who want the entity and ownership analysis handled as a package can review our foreign owned company Bali service.
Capital: what has to be committed, and to whom
PT PMA companies are subject to investment value and paid-up capital expectations set by regulation, and in some circumstances these are applied per business line and per location — meaning a company registering several unrelated activities can face a larger commitment than a founder planning a single line expects. These figures are policy settings that have been adjusted over time.
Two clarifications matter. Capital committed to the company is the company’s own money, available for its operations; it is not a fee paid to anyone. And it must be genuinely available and evidenced, not notional. Because the thresholds change, confirm the current position for your activity set with BKPM guidance or a licensed adviser. Structured setup options are outlined on our Bali PMA company registration page.
Can you work in your own company?
Holding shares in an Indonesian company does not by itself entitle a foreigner to reside in Indonesia or to perform work there; stay permits and work authorisation are governed by immigration regulations administered by the Directorate General of Immigration and, for work permits, by the Ministry of Manpower. This separation catches out a large number of founders.
The commonly used routes are an investor permit linked to shareholding in a PT PMA and a work permit sponsored by the company for a defined role. Eligibility depends on the company’s capital position, the applicant’s position and its classification, and current regulations, which are revised periodically. Working on a visitor or social visa is not permitted. Immigration matters should be confirmed with the Directorate General of Immigration or a licensed immigration adviser rather than inferred from company documents.
Land and premises: the constraint that surprises people
Indonesian law reserves Hak Milik, freehold title, for Indonesian citizens — foreign individuals cannot hold it, and this is a matter of land law rather than investment policy. Foreign-linked investment in property is instead structured through an Indonesian entity holding rights such as Hak Guna Bangunan, or through leasehold arrangements with defined terms.
Nominee arrangements — registering land in an Indonesian individual’s name under a private side agreement — are widely discussed and carry documented legal risk, including the risk that the underlying agreement is unenforceable. Any land or premises decision in Bali should be reviewed by a licensed Indonesian notary or property lawyer, with zoning and permitted use verified at regency level before funds move.
Tax obligations begin at establishment
An Indonesian company obtains a taxpayer identification number (NPWP) from the Directorate General of Taxes and becomes subject to filing obligations from establishment, not from first revenue — monthly and annual returns apply to dormant companies too. VAT registration follows once turnover or activity conditions are met. Personal tax residency is a separate question governed by presence, so cross-border founders should take advice on the corporate and personal positions together.
The reporting obligation founders miss
PT PMA companies must submit a quarterly LKPM report on investment activity, an obligation that runs from establishment regardless of revenue and is enforced at the licensing level rather than the tax level. Nothing visibly breaks when it is skipped, which is exactly why it is missed — the consequence surfaces later, at a licence renewal, an amendment, or an investor’s due diligence.
| Obligation | Applies to | Frequency |
| LKPM investment report | PT PMA | Quarterly, from establishment |
| Tax returns | All companies | Monthly and annual |
| Annual financial statements | All companies | Annual |
| Sector licence renewals | Depends on KBLI codes | Varies by sector and permit |
What a realistic 2027 sequence looks like
Scope the activities first, because activity codes drive ownership eligibility, capital expectations, licensing workload, and cost simultaneously. Then confirm the ownership position against the Positive Investment List, settle the shareholding, and prepare shareholder documents including any legalisation required abroad. Incorporation, ministry approval, OSS registration, and tax registration follow. Immigration applications generally come after the company exists, while premises and sector permits run on their own track.
Frequently asked questions
Can a foreigner own 100 percent of a Bali business?
It depends on the activity. The Positive Investment List determines which KBLI codes are open to full foreign ownership, which carry conditions, and which are closed. Many service and technology activities are open; several retail and small-scale activities are not. The check must be made against your specific intended code set with a licensed Indonesian adviser before shareholding is agreed.
Does owning a company give me the right to live in Bali?
No. Shareholding and immigration status are separate legal questions. Residence and work authorisation are governed by immigration regulations and, for employment, by manpower rules, with eligibility depending on company capital, the role held, and current policy. Investor and work permit routes exist but must be applied for on their own terms and confirmed with the Directorate General of Immigration.
Can I buy land in Bali through my company?
Foreign individuals cannot hold Hak Milik freehold title. Investment in property is generally structured through an Indonesian entity holding rights such as Hak Guna Bangunan, or through leasehold. What is available depends on the specific parcel, its title history, and its zoning. Any structure should be reviewed by a licensed Indonesian notary or property lawyer before funds are committed.
What happens if the company does not trade in its first year?
Obligations continue regardless. A PT PMA still files quarterly LKPM reports, monthly and annual tax returns, and annual financial statements even with no revenue. Dormancy is not a compliance holiday, and gaps typically surface later during licence renewal, deed amendment, or investor due diligence. Budget for compliance support from establishment rather than from first sale.
Discuss your Bali setup
Send us your intended activities, shareholding plan, and timeline and we will return a written scoping summary covering entity type, ownership eligibility, and the filings involved. Message our business desk on WhatsApp at https://wa.me/6281139414563 or email bd@juaraholding.com. We are an independent private consultancy and are not affiliated with any Indonesian government agency; legal, tax, and immigration positions should be confirmed with licensed professionals and official sources.