Navigating Indonesian Business Laws for Startups in Bali

Business Opportunities in Bali

Bali has become an attractive destination for entrepreneurs worldwide, offering a blend of stunning landscapes and vibrant culture.

Foreign Business Ownership

Foreigners can start businesses in sectors open to foreign investment. The most common entity for foreigners is a PT PMA (Foreign-Owned Limited Liability Company), which allows full ownership, employment of foreigners, and sponsorship for business visas.

Steps to Start a Business

  • Choose a Business Activity: Selecting an activity that aligns with your interests and is permitted for foreigners.
  • Determine the Legal Entity: Options include PT PMA or CV (Limited Liability Partnership), with the former being more common for full ownership.
  • Register Your Business: With the Ministry of Law and Human Rights.
  • Obtain a Business License: From the local government.
  • Get a Tax Identification Number (NPWP): For financial compliance.
  • Open a Business Bank Account: Using the NPWP.
  • Secure a Business Visa: If you plan to work within your business.

Impact of the Omnibus Law

The omnibus law reforms over 70 existing laws, including Labor Law, Spatial Planning Law, and Environmental Management Law. It simplifies business permit acquisition and categorizes businesses based on risk. It eases the path to direct investment and reduces the list of industries banned from obtaining foreign investments. This law also exempts micro and small enterprises (MSMEs) from paying workers according to the minimum wage but mandates payment above the poverty line. The omnibus law is expected to increase funding opportunities and makes it easier to source talent from outside Indonesia. It relaxes rules for outsourcing the management of business departments to third-parties.

Categorized as Visa