How Changes in Investment Regulations Can Boost Your Business in Bali
How Reforms in Indonesia's Investment Legislation Are Empowering Business Growth in Bali
Since 2023, Indonesia — including the island of Bali, a hotspot for entrepreneurs and digital nomads — has undergone sweeping reforms in its national investment policies and immigration regulations. The goal: to attract foreign investors, simplify business legalization, and establish transparent, long-term conditions for residence and commercial activity.
Below, we outline the key changes and practical considerations to keep in mind if you’re planning to launch or scale a business in Bali.
Indonesia's Investor Visa: An Alternative to “Golden Visas”
As of August 2023, Indonesia introduced a new long-term residency program for investors — effectively a local version of the “Golden Visa” schemes seen in other countries. This initiative, launched by the Directorate General of Immigration together with BKPM (Indonesia Investment Coordinating Board), aims to boost the inflow of legitimate foreign capital into the national economy.
What the Investor Visa Offers
This type of visa allows foreigners to legally reside in Indonesia, manage a company, earn income, employ staff, open both personal and business bank accounts, and—over time—apply for long-term or permanent residency.
A major advantage: there’s no need for regular visa runs or renewal every 60–180 days, as required under standard business or tourist visas.
Eligibility Requirements
To obtain an Investor Visa, applicants must:
- Register a company in the form of a PT PMA (Perusahaan Terbatas Penanaman Modal Asing) — a foreign-owned limited liability company in Indonesia.
- Invest a minimum of IDR 10 billion (~USD 650,000) in one of the approved sectors: hospitality, ecotourism, education, real estate, agriculture, and more.
- Provide financial and legal documentation verifying the source of funds and the company’s business plan.
The visa is issued for 5 to 10 years, with the possibility of extension or transition to long-term residency. Applications are handled by the Direktorat Jenderal Imigrasi in coordination with BKPM.
⚠️ Always verify the latest requirements and list of supported industries on imigrasi.go.id and through the OSS Indonesia platform.
Modernized KITAS and Visa System: Digitalization and Flexibility
As of August 2023, the Indonesian immigration authorities have streamlined the process of obtaining temporary residence permits (KITAS) and business visas, making the system more digital-friendly and investor-oriented.
Key Improvements to the Visa System
- Online submission via OSS: Most documents can now be uploaded and tracked through the Online Single Submission (OSS) system, eliminating the need for in-person visits to immigration offices.
- In-country extensions: KITAS and visa extensions can now be processed without leaving Indonesia, as long as deadlines and form submissions are met.
- Family-friendly options: Family members of investors can obtain visas allowing legal stay, school enrollment, and part-time work — ideal for relocating with a spouse and children.
These measures allow investors to focus on strategic business development instead of visa paperwork and bureaucracy.
PT PMA Regulation Updates: Fewer Barriers, Greater Control
PT PMA is the primary legal entity type for foreign businesses in Indonesia. In 2023, significant updates were made to the registration and operational reporting rules for these entities.
What Foreign-Owned Businesses Should Know
- Flexible capital injection: While IDR 10 billion remains the standard capital requirement, phased capitalization is now allowed (e.g., over the company’s first year), provided financial reporting is transparent and contribution schedules are followed.
- Profit reinvestment: Companies may now reinvest profits into company equity without triggering additional taxes, subject to compliance with the rules of the Directorate General of Taxes.
- Digital reporting made easier: The move to digital platforms has cut red tape, making it simpler to file reports and renew business licenses via OSS.
For small and medium-sized businesses in Bali — such as cafes, spas, wellness centers, surf schools, or guesthouses — these changes mark a major improvement over the pre-2022 regulatory environment.
Practical Benefits: Making Life Easier for Investors
The updated investment and immigration rules in Indonesia create a range of practical benefits — especially for those seeking a long-term presence in Bali:
- Legal residence without visa hassles: Holding an Investor Visa or KITAS provides legal protection and eliminates the need for risky workarounds or penalties.
- Secure asset ownership: A PT PMA structure allows legal ownership of assets, the ability to sign contracts, and to hire staff.
- Tax optimization: Profit reinvestment, dividend taxation, VAT, PPh 23, and PPh 25 treatments can all be strategically structured while staying compliant with local tax laws.
- Legal employee hiring: With a registered entity, it's easier to sponsor Work KITAS for foreign employees and form legitimate partnerships with other investors.
Thanks to the OSS system and clear regulation, even moderate-capital businesses can now operate “above board” with the help of experienced advisors.
Who Should Consider Indonesia's Investment Regime?
The new framework accommodates both large-scale investments (starting at USD 650,000) and medium-sized ventures that can be capitalized gradually. The best structure depends on your project’s objectives:
| Objective | Minimum Requirements | Recommended Structure |
|---|---|---|
| Build a villa or guesthouse | From IDR 10 billion | PT PMA + Investor Visa |
| Open a cafe, studio, or small wellness center | Phased capital contribution | PT PMA (optionally with KITAS) |
| Relocate with family and work remotely | From IDR 350 million (with sponsor-backed KITAS) | Family KITAS or Digital Nomad Visa |
It’s essential to tailor the structure based on your line of business. In specific scenarios (e.g., leasing or shared ownership), alternative schemes may be used — but always under legal guidance.
Conclusion
Indonesia is steadily positioning itself as an open and supportive environment for foreign investors and entrepreneurs. The 2023 reforms have made starting a business in Bali markedly simpler: digital OSS processes, streamlined PT PMA setup, phased investment pathways, and legal long-term Stay Permits via Investor Visas.
🔎 Investor Takeaways:
- Stay informed via imigrasi.go.id and oss.go.id.
- Work with experienced legal and tax advisors familiar with foreigner-specific regulations.
- When budgeting, include costs for reporting, staffing, and certification services.
Regulatory changes are creating a golden opportunity to build transparent, flexible, and sustainable businesses. Success starts with knowing the path and working within a system that’s now designed to empower, not hinder, entrepreneurs.
