Bali has long been a magnet for foreign entrepreneurs, and Chinese investors are increasingly eyeing the island as an expansion base, spanning hospitality, restaurants, and wellness businesses. Before jumping in, though, starting a business in Bali as a foreigner comes with fairly specific rules, and since early 2026 those rules have actually tightened, so understanding them upfront matters if the plan is going to stay on track.
One thing worth understanding from the start, the only legal entity that lets a foreigner actually own and operate a revenue generating business in Indonesia is the PT PMA, short for Perseroan Terbatas Penanaman Modal Asing, or foreign owned limited liability company. Other structures such as a representative office cannot issue invoices or generate direct revenue in Indonesia, so if the goal is selling products or serving local clients, PT PMA becomes the only realistic option.
Requirements and New Rules for Starting a Business in Bali
Capital is one of the first considerations. The minimum paid up capital for setting up a PT PMA sits around IDR 2.5 billion, while the total project investment generally needs to exceed IDR 10 billion per business classification and location. That figure is substantial, so making sure the business plan is solid before entering the registration stage matters quite a bit.
What makes the situation a bit different from a few years ago, since early 2026 the Bali Provincial Government has requested that new PT PMA registrations be closed for low and medium low risk business categories at Bali addresses, while also halting the use of virtual office addresses. This policy targets companies that were essentially only set up to obtain a residency visa, with no real business behind them. The sectors that remain open are exactly the ones that have long driven foreign investment in Bali, such as hotels, restaurants, wellness, and tourism, since they fall under medium high to high risk categories and require a verified Standard Certificate.
For Chinese investors serious about starting a business in Bali, this is actually fairly good news, since competition from shell companies with no real operations gets reduced. The trade off is that verification has become stricter, from picking the right KBLI code to proving that capital has actually been committed and facilities have genuinely been built.
Once the PT PMA is registered through the OSS system and receives its business license number, the company can sponsor an Investor KITAS for its shareholder. This residency permit falls under category E28A, applying to a shareholder who also serves as director or commissioner, valid for one to two years and renewable. The Investor KITAS allows living in Indonesia while running the business, including bringing family members, without needing a separate work permit for that board role.
Avoiding Common Pitfalls When Starting a Business in Bali
One of the most common mistakes, especially before the 2026 rules tightened, was becoming a shareholder in an inactive company purely to obtain an investor visa. This practice carries significant risk, since shareholder status still comes with legal and tax obligations, even for someone who has no real involvement in the company's operations. The new rules closing the loophole for shell companies only reinforce that this route is becoming increasingly unreliable.
Another fairly common mistake is not checking the KBLI classification carefully before registering, even though it determines whether a business category can be registered in Bali at all or has already landed on the restricted list. Consulting someone familiar with the latest regulations before registering can save considerable time and avoid rejection at the OSS stage.
For Chinese investors who need help handling immigration paperwork once the PT PMA is established, Visaloka offers consultation for Investor KITAS applications and related business visas, helping ensure the documents are complete from the start so the process does not stall over administrative errors. Starting a business in Bali does require more preparation than a simple holiday, but with a solid grasp of the current rules, the opportunities on the island remain wide open for serious investors.