Invest in Bali: Everything Foreign Investors Need to Know About Updated KBLI

Bali continues to captivate the world, and not only as a travel destination. For foreign entrepreneurs looking to invest in Bali, 2025 and 2026 mark a pivotal period, shaped by significant regulatory changes that directly affect how foreign-owned businesses are registered, classified, and operated.

From updated KBLI OSS codes to shifts in PT PMA capital requirements, understanding the current landscape is no longer optional. It is the foundation of a legally sound and commercially successful business presence on the Island of the Gods.

Why Bali Investment Remains a Top Priority for Foreign Businesses

Bali’s appeal as an investment destination is backed by real numbers. The Province of Bali recorded a total investment realization of IDR 42.81 trillion by the close of Q4 2025, according to the Bali Investment and One-Stop Integrated Service Office (DPMPTSP). Foreign direct investment (PMA) alone accounted for IDR 25.60 trillion, growing 5.7% year-on-year.

At the national level, Indonesia’s full-year 2025 FDI realization reached IDR 900.9 trillion, representing 46.6% of total national investment, according to BKPM data. Badung regency, which includes Seminyak, Canggu, and Nusa Dua, remains Bali’s single largest contributor to investment targets. The tourism, hospitality, and digital nomad economy sectors continue to drive this surge.

Key Reasons to Invest in Bali

•         Tourism infrastructure ranked among Asia’s most developed

•         Over 6.3 million international visitors in 2024 (BPS, 2025)

•         Strong demand for hospitality, wellness, F&B, and digital services

•         Badung consistently leads provincial investment targets

•         Growing digital nomad and remote-work ecosystem in Canggu and Ubud

What Is KBLI and Why It Matters for Foreign Investors?

KBLI (Klasifikasi Baku Lapangan Usaha Indonesia) is Indonesia’s official five-digit business classification system, administered by the Central Statistics Agency (BPS). Every business registered through the Online Single Submission (OSS) platform must declare a KBLI code, as it defines the legal scope of operations, required licenses, risk category, and ownership limits.

For anyone seeking to invest in Bali through a PT PMA (Perseroan Terbatas Penanaman Modal Asing, or Foreign-Owned Limited Liability Company), the chosen KBLI code determines the minimum capital requirement, foreign ownership percentage, and what the company is legally allowed to do.

Pro Tip: Selecting a KBLI code that is too broad or inaccurate is one of the most common and costly mistakes foreign investors make in Indonesia. Always consult with a licensed legal advisor before registering on the OSS system.

Updated KBLI OSS Rules: What Changed in 2025?

On 2 October 2025, Indonesia’s Ministry of Investment and Downstream Industry (BKPM) issued Regulation No. 5 of 2025 (Peraturan Menteri Investasi dan Hilirisasi No. 5 Tahun 2025). This landmark regulation revoked and replaced BKPM Regulations Nos. 3, 4, and 5 of 2021 and fundamentally reshaped how PT PMA companies are structured through the KBLI OSS system.

The regulation directly affects Bali investment planning, particularly for businesses in tourism, F&B, hospitality, consulting, and digital services. Every PT PMA company must now ensure its KBLI selection is precise, detailed, and aligned with the latest BKPM guidelines.

Key Changes Under BKPM Regulation No. 5/2025

Area	Before (Pre-2025)	After (BKPM No. 5/2025)
Minimum Paid-Up Capital (PT PMA)	IDR 10 billion	IDR 2.5 billion
Minimum Total Investment per KBLI	IDR 10 billion	IDR 10 billion (unchanged)
Capital Lock-Up Period	None specified	12 months from deposit
KBLI Specificity	Broad codes accepted	5-digit precision required
LKPM Reporting	Broad exemptions	Most PT PMAs must report
General/Catch-All KBLI	Permitted	No longer acceptable

Bali’s KBLI Closures: What the DPMPTSP Proposal Means

In February 2026, Bali’s Investment and One-Stop Integrated Service Office (DPMPTSP Provinsi Bali) formally proposed the closure of seven KBLI categories to the Ministry of Investment. These targeted sectors had been identified as frequently misused by PT PMA companies operating in ways inconsistent with their registered classification.

According to DPMPTSP head I Ketut Sukra Negara, the sectors proposed for closure fall under low-risk and medium-low-risk categories, making them easier to exploit for licensing purposes. As of the time of this writing, only one KBLI has received approval for closure: management consulting services for PMA. The remaining six are still under review.

What This Means for Foreign Investors:

•         Existing PT PMA companies in affected sectors are being called in for guidance and may face supervision.

•         New applications under misaligned KBLI codes are increasingly scrutinized.

•         Bali authorities are prioritising quality investment over volume, particularly in sectors with documented abuse.

•         Investors should audit their current KBLI registration to ensure full compliance.

Setting Up a PT PMA in Bali: The Step-by-Step Process

Establishing a PT PMA remains the primary legal vehicle for foreign nationals who wish to invest in Bali. This structure grants full legal business standing in Indonesia and allows the company to sign contracts, hire staff, own assets, and operate commercially.

With the updated BKPM No. 5/2025 in effect, the incorporation process now demands more precision, particularly around KBLI selection and capital planning. General or catch-all KBLI codes are no longer acceptable in the OSS system. Each declared business line must meet the IDR 10 billion total investment value threshold per KBLI per project location.

Steps to Establish a PT PMA:

1.       Determine business activities and select the correct 5-digit KBLI code(s)

2.      Cross-reference against the Positive Investment List (Perpres No. 10/2021 and No. 49/2021)

3.      Prepare articles of association and founding shareholder documents

4.      Register the company through Indonesia’s OSS-RBA (Online Single Submission, Risk-Based Approach) platform at oss.go.id

5.      Obtain the NIB (Nomor Induk Berusaha, Business Registration Number)

6.      Fulfil sector-specific licensing requirements based on risk category

7.       Deposit paid-up capital (minimum IDR 2.5 billion) and observe the 12-month lock-up rule

8.      Begin submitting quarterly LKPM (Investment Activity Report) unless exempted

Pro Tip: For F&B businesses investing in Bali, the IDR 10 billion total investment threshold applies per city or regency, not per outlet. This is a significant flexibility introduced by BKPM Regulation No. 5/2025.

Understanding the Positive Investment List for Bali Investors

The Positive Investment List (Daftar Positif Investasi), enacted under Presidential Regulation No. 10 of 2021 and amended by Presidential Regulation No. 49 of 2021, remains the governing framework for foreign ownership in Indonesia. It defines which business sectors are fully open, conditionally open, or reserved for domestic players.

Notably, updates in 2025 did not alter ownership permissions under this list. Foreign investors should understand that the Positive Investment List focuses on shareholding eligibility, while BKPM No. 5/2025 addresses licensing processes, capital requirements, and operational reporting. Both frameworks apply simultaneously.

Sectors with 100% Foreign Ownership Options (examples):

•         Digital services and software development (KBLI 62010)

•         IT consulting and tech solutions

•         Export-oriented manufacturing

•         Renewable energy development

•         Tourism and accommodation (subject to specific conditions)

 KBLI Codes Relevant to Bali’s Top Investment Sectors

Bali’s investment landscape is heavily driven by tourism, hospitality, wellness, F&B, and digital services. Each of these sectors corresponds to specific KBLI OSS codes, and knowing the right code before applying for a PT PMA is essential.

Due to the recent KBLI closure proposals in Bali, foreign investors should be especially cautious in the management consulting space. Only one KBLI in this category has been formally approved for closure so far, but authorities have signalled continued scrutiny across low-risk categories often used as registration shortcuts.

Commonly Used KBLI Codes in Bali:

•         KBLI 55110 – Star-rated hotel accommodation services

•         KBLI 55120 – Non-star hotel and guesthouse accommodation

•         KBLI 56101 – Full-service restaurant activities

•         KBLI 56301 – Bar, lounge, and nightclub activities (partially restricted)

•         KBLI 93199 – Sports and recreation activities

•         KBLI 62010 – Computer programming (100% foreign ownership eligible)

•         KBLI 70209 – Business management consulting services (under review)

•         KBLI 86901 – Wellness and spa services

Pro Tip: Always verify KBLI codes directly through the OSS system at oss.go.id before submitting your application. The KBLI list is periodically updated, and the five-digit code level can significantly affect your ownership structure and licensing requirements.

Capital Requirements for PT PMA in Bali: Old vs. New Rules

One of the most impactful changes for those planning to invest in Bali is the revision of the minimum paid-up capital for PT PMA. Under BKPM Regulation No. 5/2025, the minimum paid-up capital has been reduced from IDR 10 billion to IDR 2.5 billion. This change lowers the initial cash burden for foreign investors significantly.

However, investors must clearly understand the distinction: the minimum total investment value per KBLI per project location remains IDR 10 billion (excluding land and buildings). The IDR 2.5 billion paid-up capital must remain in the company’s bank account for 12 months unless used for capital expenditure or daily operations.

Important Capital Notes:

•         Paid-up capital: Minimum IDR 2.5 billion per company (new rule)

•         Total investment plan: More than IDR 10 billion per 5-digit KBLI, per project location

•         The remaining IDR 7.5 billion may be structured as machinery, equipment, vehicles, or qualifying expenditures

•         For property and hospitality sectors in Bali, land and building costs can be factored into the investment plan

•         Investor KITAS (temporary residency permit) still requires proof of ownership worth at least IDR 10 billion

•         Investor KITAP (permanent residency) requires at least IDR 15 billion

 OSS-RBA: How Indonesia’s Digital Licensing System Works

Indonesia’s Online Single Submission (OSS) system, operating on a Risk-Based Approach (RBA), is the centralized portal for business registration, licensing, and compliance reporting. All PT PMA companies operating in Bali must register through this system to obtain their NIB (Business Registration Number) and relevant sector permits.

The KBLI OSS code selected during registration determines the risk level of the business, which in turn affects the type of license required, ranging from a simple registration for low-risk activities to a full business license for medium-high and high-risk categories. Since 2025, the OSS system also automatically triggers administrative sanctions if a company’s LKPM shows zero capital realisation for four consecutive quarters.

7 KBLI Sectors Proposed for Closure in Bali: What Foreign Investors Must Know Now

In one of the most significant policy moves for Bali investment in recent years, the Bali Provincial Government formally submitted a request to the Ministry of Investment (BKPM) to close seven KBLI categories to foreign-owned companies (PMA). The proposal was submitted by the Bali DPMPTSP in February 2026 and is currently under national review.

The rationale is clear. According to DPMPTSP head I Ketut Sukra Negara, these seven categories have been identified as consistently misused by PT PMA companies, often to crowd out local businesses or to gain a foothold in sectors that were never intended for large-scale foreign capital. The targeted KBLI codes all fall under low-risk and medium-low-risk classifications.

The 7 KBLI Sectors Proposed for Closure to PMA in Bali

•         Real Estate / Property Development: Frequently used as cover for unlicensed villa construction and management by PMA entities.

•         Motorcycle and Vehicle Rental: A micro-to-small business sector legally reserved for local UMKM operators; PMA involvement has crowded out Balinese entrepreneurs.

•         Retail Trade (General): Broad retail categories have been misused by foreign-owned entities operating small shops, a sector meant for local businesses.

•         Photography and Creative Services: Low-risk and easy to register, this KBLI has been used as a gateway license by PMA companies operating unrelated businesses.

•         Travel Agency and Tour Operator Services: Foreign operators have entered this sector via PMA structures, competing directly with locally licensed tour businesses.

•         Management Consulting Services: The only KBLI closure approved by the Ministry of Investment as of early 2026. This category was the most widely misused for PMA licensing purposes.

•         Other Low-Risk Services (Under Review): One additional KBLI in the low-risk category remains under national review. Formal closure approval is still pending.

One Down, Six Still Under Review

As of early March 2026, only management consulting services has received formal approval for PMA closure from the national government. Bali would become the first province in Indonesia to restrict PMA participation in low-risk and medium-low-risk KBLI categories if all seven closures are eventually approved by the Ministry of Investment.

The Bali Provincial Legislature (DPRD Bali) has stated that businesses already operating under these KBLI codes will not face immediate shutdown. Instead, a transition period of approximately three months will be granted, during which existing operators must either shift to a permissible KBLI category, transfer assets to local business owners, or proceed with permanent closure.

The Bigger Picture: Bali’s Investment Diversification Push

Bali’s investment structure is heavily concentrated in the tertiary sector. According to DPMPTSP data, hotels and restaurants alone account for roughly 29 percent of total 2025 investment, followed by housing and real estate at 28 percent. Primary and secondary sectors such as agriculture, fisheries, and processing industries remain minimal contributors.

The KBLI closure proposal is part of a broader strategy to redirect foreign investment toward higher-value, more sustainable sectors. Bali authorities have signalled that future PMA activity should contribute meaningfully to the economy rather than displace local micro-businesses.

What This Means for Foreign Investors Planning to Invest in Bali:

•         Investors currently holding a PT PMA under any of the seven proposed KBLI categories should seek a legal review of their registration immediately.

•         Companies wishing to expand their operations in Bali must ensure that their new KBLI additions do not fall within the closure list.

•         Those planning to enter the Bali market for the first time should treat the closure list as a hard boundary and work with a licensed advisor to select compliant KBLI codes.

•         PMA entities that operate in UMKM-scale activities such as motorbike rental will face the clearest restrictions, as Bali moves to fully reserve this sector for local operators.

•         Existing businesses may retain their current operations with supervision during the transition period, but will not be permitted to expand under restricted KBLI codes.

•         Investors with legitimate interests in affected sectors such as travel agencies or real estate development may explore restructuring into joint venture arrangements with qualified local partners.

Pro Tip: The KBLI closure proposals underscore a clear policy direction: Bali is moving toward quality-driven foreign investment. Investors who align their PT PMA with higher-complexity, higher-value business activities will face far fewer regulatory hurdles going forward.

Common Mistakes Foreign Investors Make When Registering in Bali

Regulatory compliance in Indonesia requires careful attention at every step. Many issues that later delay or disrupt business operations in Bali can be traced back to errors made during the initial registration and KBLI selection phase.

Understanding what to avoid is just as critical as knowing what to do. The following mistakes have been observed most frequently among PT PMA applicants in Bali, based on guidance from DPMPTSP and legal practitioners.

•         Selecting a broad or catch-all KBLI code instead of a precise 5-digit classification

•         Misusing low-risk KBLI codes (such as management consulting) to bypass stricter sector requirements

•         Failing to meet the IDR 10 billion total investment threshold per KBLI per project location

•         Ignoring the 12-month capital lock-up requirement after depositing paid-up capital

•         Neglecting LKPM (Investment Activity Report) submission obligations

•         Not updating the company deed and OSS records when changing business activities or KBLI

•         Choosing KBLI codes that are currently under proposal for closure in Bali

Compliance and Reporting: Staying on the Right Side of Bali Investment Rules

Regulatory compliance does not end at registration. Foreign investors operating in Bali through a PT PMA must maintain ongoing compliance through the LKPM system, ensure their business activities remain within the declared KBLI scope, and keep OSS records updated as the business evolves.

Under BKPM Regulation No. 5/2025, almost all PT PMA companies are now required to submit quarterly LKPM reports. Failure to report zero capital realisation for four consecutive periods triggers automatic administrative sanctions through the OSS system. Staying compliant protects the company’s license and supports future expansion under additional KBLI codes.

A New Era for Foreign Investment in Bali

The opportunity to invest in Bali has never been more clearly defined, and with that clarity comes a higher bar for compliance. The 2025 regulatory updates have made Indonesia’s investment environment more transparent, more accessible, and also more closely monitored.

Foreign investors who approach Bali investment with the right KBLI selection, a credible investment plan, and a commitment to compliance will find one of Asia’s most rewarding business environments. Those who cut corners on classification risk administrative sanctions, forced restructuring, or license revocation.

Bali is not just open for business. It is evolving toward a smarter, more sustainable, and more regulation-driven investment future. Investors who understand this shift are already ahead.