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How to Legally Start a Business in Bali as a Foreigner

Bali, with its idyllic landscapes, vibrant culture, and growing economy, has become an attractive destination for entrepreneurs worldwide. Starting a business in Bali as a foreigner can be a rewarding venture, but it requires careful navigation through legal requirements and regulations. This article will guide you through the essential steps to establish your

business, the permits and licenses you need, and common pitfalls to avoid.

Steps to Establish a Business

1. Conduct Market Research
Before diving into the business setup process, conduct thorough market research.
Understand the local market, consumer behavior, competition, and potential challenges.
This will help you create a viable business plan and determine the feasibility of your
business idea.
2. Choose a Business Structure
In Indonesia, including Bali, foreigners can choose from several business structures:



Local Company (PT PMA): A foreign-owned limited liability company.
Representative Office: For market research and establishing a local presence
without direct business operations.
Local Nominee Company: A structure where a local nominee holds shares on behalf
of the foreign owner. This option is not officially recognized and can be risky.
Most foreigners opt for a PT PMA, as it allows for full foreign ownership and direct business
operations.
3. Prepare Required Documentation
You’ll need various documents to set up your business, including:




Business Plan: Outline your business goals, strategies, and financial projections.
Identification: Passports and visas of all foreign shareholders and directors.
Company Name: Register a unique company name.
Office Lease Agreement: Proof of a physical office location in Bali.
4. Register Your Company
To register a PT PMA, you must go through the Indonesian Investment Coordinating Board
(BKPM). The process involves:•



Preliminary Approval: Submit your business plan and documents to BKPM for initial
approval.
Deed of Establishment: Drafted by an Indonesian notary and signed by all
shareholders.
Approval from the Ministry of Law and Human Rights: Legalize the company deed.
Obtain a Tax Identification Number (NPWP): Register with the local tax office.
5. Open a Corporate Bank Account
Open a corporate bank account in Indonesia to manage your business finances. You’ll need
the company deed, NPWP, and identification documents for this process.
Required Permits and Licenses
1. Business Identification Number (NIB)
The NIB is obtained through the Online Single Submission (OSS) system and serves as your
primary business identification number.
2. Business Licenses
Depending on your industry, you may need specific licenses. Common licenses include:



Commercial License: Required for general trading activities.
Industrial License: Necessary for manufacturing businesses.
Tourism License: Needed for businesses in the tourism sector, such as hotels and
restaurants.
3. Operational and Commercial Licenses
After obtaining the NIB, you may need additional operational and commercial licenses,
depending on the nature of your business. These can include environmental permits, health
and safety permits, and other industry-specific licenses.
Conclusion
Starting a business in Bali as a foreigner can be a rewarding experience if approached
correctly. By following the necessary steps, obtaining the required permits and licenses, and
avoiding common pitfalls, you can establish a successful business in this beautiful island
paradise. With careful planning and adherence to local regulations, your business can thrive
in Bali’s dynamic market.

 

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