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A Complete Guide To
Setting Up A Business
In Bali | Emerhub.com
8-9 menit

Thinking about starting a lifestyle business

in Bali? Learn what it takes to set up this
kind of business.
Many foreigners consider setting up a
lifestyle business to support themselves in
Bali. Indonesia has certain rules for foreign
businesses, particularly with capital and
investment requirements. You must
understand these regulations so you can plan
how to start a lifestyle business in Bali.
In this article, we discuss key information
about lifestyle businesses in Bali. We will
debunk some common misconceptions about
businesses in Bali. In addition to that, we will
talk about the usual challenges foreigners
face when starting a lifestyle business in Bali.
We will also share alternative ways to set up
a business in Bali.

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Common Lifestyle Businesses in

Bali
There isn’t a particular niche or industry for
a lifestyle business. Some of the most
popular lifestyle businesses for foreigners in
Bali include:
Businesses in the food and beverage industry
like restaurants or cafes
Short-term rentals like villas or guesthouses
Travel agencies or tour operators
Recreation and leisure activities (yoga,
surfing, diving, golf)
Clothing and jewelry design and distribution
Import and sales of cosmetics
Spiritual health, holistic and wellness
services/retreats
Consulting services, for example, marketing,
branding and social media management
Photography and videography services
Watch this video and listen to the stories of
entrepreneurs in Bali.

Common myths regarding doing

business in Bali

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We learned from our clients that there are a

few misconceptions about doing business in
Bali. We gathered the most common of these
and discussed them below.

#1 Foreigner cannot be a director of a

local company

There is no law that prohibits foreigners

from being directors of a local company in
Indonesia. Only one director in a local
company has to be a citizen of Indonesia.
Other directors can be foreigners.
Local companies can sponsor work permits
(KITAS) for foreigners. However, this
depends on the size of the capital of the
company. The number of work permits a
company can sponsor also depends on its
capital.
Foreign directors can get working KITAS as
long as the local company fulfills
requirements. For other positions,
Indonesia’s Ministry of Manpower must
approve the working KITAS.

#3 Local companies pay lower taxes

Businesses with foreign ownership, have the

same tax rates as local businesses. The
general tax rate for businesses in Indonesia
ranges from 12.5% to 25%.

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Note that some businesses must report

additional taxes. For example, hospitality
businesses must report tourism taxes.
Emerhub can help you compute your
corporate income tax. Our consultants will
also report your taxes in Bali to comply with
local laws.

#4 Having a local partner makes the

company registration process faster

In Indonesia, a company with partial foreign

ownership is a foreign-owned company. As
such, having a local partner does not change
the registration process or requirements.
Company registration in Bali by Emerhub
There is no regulation that specifies the
number of work permits (KITAS) a company
can sponsor. As stated above, the number of
KITAS a local company can sponsor depends
on its capital. There is no such restriction for
a foreign-owned company.
The table below shows the number of KITAS
a company can sponsor depending on the
role.
Foreign- Local
owned company
company
Director As many As many as
as needed needed

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Foreign- Local
owned company
company
Commissioner As many None*
as needed *Foreigners
cannot be
commissioners
in local
companies

Other Subject to Subject to the

positions the approval of the
approval Ministry of
of the Manpower
Ministry
of
Manpower
Ultimately, though, granting KITAS to
foreign workers is at the discretion of
Indonesia’s Ministry of Manpower. The
ministry will decide how many KITAS a
company can sponsor.

Challenges of Lifestyle
Businesses

Meeting the Minimum Capital

Requirements and Investment
Requirements

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The minimum capital requirement for

foreign-owned limited liability companies
(PT PMA) is IDR 2.5 billion (approx. USD
190,000). This is 25% of the investment
requirement of IDR 10 billion (approx USD
675,000). Lifestyle businesses are quite
small so fulfilling these requirements is
difficult.
There is no need to submit an investment
plan, nor show the company’s bank account.
However, the Indonesian government
enforces the above regulations. You must
prepare a capital statement letter to prove
the paid-up capital. Your company will also
have to file an investment activity report
(LKPM) periodically to show that you are
investing money.
Emerhub can help you prepare and submit
the capital statement letter and LKPM. We
will make sure that you maintain compliance
with Indonesia’s investment regulations.

Limited Percentage of Foreign

Ownership

Many businesses are open to full foreign

ownership. However, some business
classifications (KBLI) only allow partial
foreign ownership. There are many
hospitality businesses with such restrictions.
The table below shows some examples of
common hospitality businesses that do not

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allow full foreign ownership.

Business Allowed Foreign
Ownership
Hotels (4 stars or 67%
less)
Travel 70% (for investors
Agency/Tour from ASEAN
Operator countries)
67% (for investors
from non-ASEAN
countries)
Water sports and 70% (for investors
diving tours from ASEAN
countries)
51% (for investors
from non-ASEAN
countries)
Wellness 51%
services/Spas
Get in touch with Emerhub to find out if your
planned business is open to foreign
ownership. Our consultants are ready to
advise you on which KBLI best suits your
planned business activities.

Regulations for Multiple Businesses

Under One Company

There are regulations to note regarding

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multiple KBLIs under one PT PMA. For

example, the minimum investment
requirement of IDR 10 billion is for each
KBLI. So if you have two KBLIs under your
PT PMA, the minimum investment
requirement is IDR 20 billion.
Additionally, there are some KBLIs that
cannot be under the same PT PMA. This is
the case for manufacturing and distribution
KBLIs. A PT PMA cannot have both of these
KBLIs.
Another thing to note is that all businesses in
a PT PMA share tax reports, investment
reports, and liabilities. Some people with
separate businesses set up a single PT PMA
together to reduce costs for registration and
visas. All partners will be liable if one does
not report taxes or investments correctly. All
partners will also be liable if they are unable
to consolidate all data on time.

Alternatives to Setting Up a PT
PMA

Set Up a Company in Bali through

Special Purpose Vehicle in Bali

Setting up a 100% foreign-owned PT PMA is

not the only way to start a lifestyle business
in Bali. You can also set up your business

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through a special purpose vehicle. A special

purpose vehicle is a legal entity that holds
shares on behalf of another party. In essence,
the special purpose vehicle is just a name on
the company’s documents.
With a local Indonesian company as your
special purpose vehicle, you do not have to
follow regulation for foreign-owned
companies. Some examples of businesses
where special purpose vehicles are common:
Restaurants and cafés
Surf and diving centers
Yoga studios
Travel agencies/tour operators
Through a set of agreements, you can have
full control of the company even if it is under
the name of the special purpose vehicle. This
is a safe way of having a local entity holding
your shares and will protect your interests.
Emerhub can act as your special purpose
vehicle in Bali. Get in touch with us by filling
out the form below.
The safe way of having a local business
partner in Bali.
Are you ready to start a lifestyle business in
Bali? Fill out the form below and our
consultants will be happy to assist you. Our
team will help you choose the option that
best suits your planned business activities.

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