Important Update for PT PMA in Bali: OSS May Block Low-Risk and Medium-Low-Risk Activities for Foreign-Owned Companies – Visa Agency

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Important Update for PT PMA in Bali: OSS May Block Low-Risk and Medium-Low-Risk Activities for Foreign-Owned Companies

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Important Update for PT PMA in Bali: OSS May Block Low-Risk and Medium-Low-Risk Activities for Foreign-Owned Companies

Flado Indonesia informs clients and partners about an important development for foreign investors planning to open a PT PMA in Bali or elsewhere in Indonesia.

On 28 January 2026, the Governor of Bali sent an official letter to the Minister of Investment and Downstream Industry / Head of BKPM requesting restrictions on foreign investment companies in Bali for business activities with low risk and medium-low risk. The letter also mentions several commonly used KBLI codes, including real estate, management consulting, vehicle rental, travel agency activities, retail trade and other business activities.

The document is now being used in practice inside the OSS system as a basis for blocking certain business activity applications for PT PMA in Bali.

In simple terms: for a PT PMA located in Bali, OSS may not allow the company to continue the licensing process for activities classified as low risk or medium-low risk.

This is especially important for businesses related to villas, guesthouses, short-term rental, hospitality management, retail, consulting and other activities that are often selected by foreign investors in Bali.

Official document:
Letter from the Governor of Bali regarding PT PMA restrictions for low-risk and medium-low-risk activities

Example of OSS notification for Bali:
View OSS example screenshot

How Company Registration and Licensing Work in Indonesia

In Indonesia, a company is first established as a legal entity. For a PT PMA, the company structure usually includes at least two shareholders, a director and a commissioner. The company is registered through the Ministry of Law system, commonly referred to as AHU.

The company deed and articles of association include the commercial activities that the company is allowed to conduct. These activities become the legal basis for adding relevant KBLI codes later in the OSS system.

After the company is registered, an OSS account is created. OSS is Indonesia’s integrated business licensing platform connected to multiple government institutions and ministries, including investment, taxation, trade, public works, health and other sectors.

When the company adds a KBLI code in OSS, the system checks whether that activity is included in the company’s deed and whether it can be processed based on regulatory, risk, zoning and licensing requirements.

Adding a KBLI Code Is Not Enough

For a company to legally operate under a selected KBLI, simply adding the activity in OSS is not enough. Depending on the business type, location and risk level, the company may need to complete several licensing steps.

These may include:

  • Obtaining a standard certificate or business license through OSS;
  • Obtaining KKPR, which confirms spatial suitability for business activity at a specific location;
  • Obtaining the required environmental approval, such as SPPL, UKL-UPL or AMDAL, depending on the business scale and impact;
  • Completing additional sectoral licenses through the PB-UMKU section, where applicable.

Each KBLI has its own licensing logic. The system may consider the business location, land zoning, building type, business scale, investment structure, risk level and sector-specific rules.

For example, a manufacturing facility cannot be licensed in a tourism-only zone. A hospitality activity may be restricted by zoning, building size, classification or whether the activity is reserved for local micro and small businesses.

Why This Matters for Foreign-Owned Companies in Bali

The key issue is that many popular business activities for foreign investors in Bali fall under low-risk or medium-low-risk categories, or may be reserved for UMKM, meaning micro, small and medium enterprises owned by Indonesian citizens.

Because of the Governor of Bali’s initiative and the way this is now reflected in OSS, PT PMA companies in Bali may face serious restrictions when applying for certain KBLI activities.

In practice, PT PMA companies in Bali may now need to focus on activities with a risk level above medium-low, subject to zoning, location and sector-specific requirements.

Example: Accommodation and Short-Term Rental Activities in Bali

One of the most common sectors for foreign investors in Bali is accommodation, including villas, guesthouses, hotels, apart-hotels and short-term rental management.

Many of these activities are grouped under KBLI 55. However, not all KBLI 55 activities are suitable for PT PMA in Bali.

For example:

  • 55110 — Star-rated hotel
    May be classified as medium-low risk for buildings up to a certain size, while larger-scale hotels may fall into a higher risk category. One-star hotels may be reserved for UMKM.
  • 55120 — Motel
    May be reserved for UMKM.
  • 55130 — Pondok wisata
    May be reserved for UMKM.
  • 55191 — Youth hostel
    May be classified as medium-low risk.
  • 55192 — Camping ground
    May be classified as medium-low risk.
  • 55193 — Villa
    May be reserved for UMKM.
  • 55194 — Apart-hotel / condotel
    May fall into a higher risk category and may remain more suitable for PT PMA, depending on the exact project and location.
  • 55199 — Guesthouse / other accommodation
    May be classified as medium-low risk or include categories restricted to UMKM.
  • 55190 — Accommodation management / hotel management
    May include some short-term rental-related activities and may be classified as medium-low risk.

Based on the current direction, PT PMA options in Bali for accommodation-related activities may become much narrower. In many cases, the more realistic categories may be limited to larger-scale hotels, properly classified hotel projects or apart-hotel / condotel structures, depending on the location and licensing requirements.

Each case must be checked individually in OSS based on the exact location, KBLI code, zoning and project details.

Does This Mean Foreigners Cannot Open a PT PMA in Indonesia?

No. This update does not mean that foreigners cannot open companies in Indonesia.

It means that for Bali, certain low-risk and medium-low-risk activities may be blocked for PT PMA in OSS. However, PT PMA registration remains possible across Indonesia, including Bali, Lombok and other provinces, provided that the business activity, location and licensing structure are suitable.

Flado Indonesia continues to assist clients with PT PMA registration throughout Indonesia.

If a planned activity is restricted in Bali, investors may need to consider:

  • Another legally suitable KBLI subcategory;
  • A different location within Bali;
  • A location outside Bali, such as Lombok or another Indonesian province;
  • A different business model or licensing structure;
  • A higher-risk activity category where the business model genuinely qualifies for it.

The First Step Is the Location

Before discussing shareholders, director, commissioner or company name, the first practical step is to check the business location.

The exact location matters because OSS and related authorities may check whether the selected activity is allowed at that specific point. Zoning, regional rules, land use and building classification can all affect whether a KBLI can be licensed.

To start a PT PMA assessment with Flado Indonesia, please prepare:

  • A Google Maps link to the exact business location;
  • A short description of the planned business activity;
  • The expected type of operation: office, villa, hotel, restaurant, warehouse, shop, consulting office, production, online business or another activity;
  • Possible KBLI codes, if you have already found them;
  • Confirmation that the shareholders are ready for the minimum PT PMA capital requirements.

How to Search Possible KBLI Codes

You can search possible KBLI codes through the official OSS KBLI directory:

Search KBLI codes in the official OSS directory

This OSS search can help you understand which KBLI code may describe your planned activity. However, the KBLI search alone is not a final approval.

The final licensing logic depends on:

  • The exact location;
  • Land zoning and spatial suitability;
  • Risk level of the activity;
  • Whether the activity is open to PT PMA;
  • Whether the activity is reserved for UMKM;
  • Business scale;
  • Building type and size;
  • Environmental requirements;
  • Sector-specific licenses.

That is why Flado Indonesia starts with the location and KBLI direction first. If the selected activity is not allowed at the chosen location, we may need to check another KBLI subcategory or consider another location.

Capital Requirement for PT PMA

Foreign-owned companies in Indonesia generally require a minimum investment plan of at least IDR 10 billion.

At least 25% of this amount, meaning IDR 2.5 billion, should be ready as paid-up capital at the initial stage.

This is an important practical requirement. If the shareholders cannot show the required paid-up capital, the notarial registration may not be possible.

Before starting the PT PMA process, investors should make sure that the capital requirement is realistic for their case.

What Happens If the Location or KBLI Does Not Work?

If the selected KBLI cannot be licensed at the chosen location, there are usually several possible directions:

  • Check whether another KBLI subcategory more accurately describes the real activity;
  • Review whether the business model can be adjusted legally;
  • Consider another location where the activity may be allowed;
  • Check whether the activity requires a different licensing path;
  • Reassess whether PT PMA is the correct structure for the planned business.

It is important not to choose a KBLI only because it looks convenient. The selected KBLI must match the real business activity, otherwise the company may face licensing, banking, tax, reporting or operational problems later.

Tax and Accounting Should Be Reviewed Separately

PT PMA registration and business licensing are not the same as tax planning.

Tax structure, accounting, VAT, payroll, withholding tax, shareholder loans, dividends and operational bookkeeping should be reviewed separately with a qualified tax consultant.

Flado Indonesia can assist with company registration and licensing coordination, while tax strategy and tax reporting should be confirmed with a licensed tax professional.

How Flado Indonesia Can Help

Flado Indonesia assists foreign investors with PT PMA company registration and related licensing coordination across Indonesia.

We can help you:

  • Review whether your planned activity may be suitable for PT PMA;
  • Check the initial KBLI direction;
  • Review the business location logic;
  • Coordinate PT PMA registration with the notary;
  • Prepare the basic company structure;
  • Guide you through the next OSS licensing steps;
  • Explain when another location or another KBLI may be required.

Before Contacting Flado Indonesia

If you are planning to open a PT PMA in Bali, Lombok or anywhere else in Indonesia, please prepare three things before contacting us:

  1. Exact business location
    Send us a Google Maps link to the exact point where the company activity will be located.
  2. Planned business activity and possible KBLI direction
    You can search possible KBLI codes in the official OSS directory:
    https://oss.go.id/id/pencarian?tab=kbli&q=kbli
  3. Paid-up capital readiness
    For PT PMA, the general investment plan is at least IDR 10 billion, and at least IDR 2.5 billion should be ready as paid-up capital at the initial stage.

If the location is not suitable for the selected KBLI, we may need to check another KBLI subcategory or consider another location. If the required paid-up capital is not available, the notarial registration may not be possible.

Flado Indonesia can help you check the location, review the KBLI direction, prepare the company structure and register the PT PMA across Indonesia.

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