Setting Up a Company in Bali, Indonesia

Published on March 3, 2026 and written by Cyril Jarnias

The paradise island of Bali is attracting more and more foreign entrepreneurs eager to benefit from its idyllic setting and dynamic economy. With its dream beaches, fascinating culture, and affordable cost of living, Bali offers an environment conducive to business development. This article will guide you through the key steps to establish your company in Bali, covering the legal, tax, and practical aspects to consider.

Why Bali is an Entrepreneur’s Paradise

Bali has established itself as a top destination for entrepreneurs worldwide. The Indonesian island offers numerous advantages for setting up operations:

A thriving entrepreneurial ecosystem: Bali is home to a dynamic community of local and international entrepreneurs. Numerous coworking spaces, incubators, and networking events facilitate exchanges and collaborations.

An attractive cost of living: Compared to other popular entrepreneurial destinations like Singapore or Hong Kong, Bali offers excellent value for money. Business operating costs are significantly lower.

Exceptional quality of life: The Balinese lifestyle, set between paradise beaches and lush nature, allows for a harmonious blend of work and well-being. A perfect way to boost creativity and productivity!

Rapidly developing infrastructure: Bali is heavily investing in its infrastructure, including the upcoming opening of a new international airport. High-speed internet coverage is expanding quickly across the island.

A growing market: With an expanding middle class and a steady influx of tourists, the Balinese market offers excellent opportunities in many sectors.

Legal Structures Suitable for Your Project

Several options are available to foreign entrepreneurs looking to establish a company in Bali:

PT PMA (Perseroan Terbatas Penanaman Modal Asing): This is the most common structure for foreign investors. It allows for 100% foreign ownership in most business sectors. PT PMA requires a minimum capital of 10 billion rupiah (approximately $580,000), but this amount can be reduced in certain cases.

PT Local: This structure is reserved for Indonesian citizens. Foreigners can participate through a local nominee, but this practice carries significant legal risks.

Representative Office: This allows a foreign company to have a legal presence in Bali without engaging in direct commercial activities. It’s a suitable solution for market research or activity coordination.

Limited Partnership (CV): This more flexible structure is accessible to foreigners but limited to certain business sectors. It’s suitable for small businesses and freelancers.

Focus on PT PMA

PT PMA offers several advantages:

• Possibility of 100% foreign ownership
• Recognized legal status facilitating relations with authorities and business partners
• Eligibility for certain tax benefits and import facilities
• Allows obtaining work permits for foreign directors and employees

Corporate Taxation in Bali: An Attractive Regime

The Indonesian tax system offers several advantages for companies established in Bali:

Competitive tax rate: Corporate income tax is 22% of profits, lower than many Western countries. This rate is expected to be reduced to 20% in the coming years.

Sector-specific tax incentives: Priority sectors like renewable energy or tourism can benefit from temporary tax exemptions or tax reductions.

11% VAT: This relatively low rate applies to most goods and services. Some essential products are exempt.

Advantageous tax treaties: Indonesia has signed double taxation avoidance agreements with many countries, facilitating international exchanges.

Reporting Obligations

Companies must maintain accounting records compliant with Indonesian standards and file monthly and annual tax returns. It’s strongly recommended to engage a local accountant to ensure compliance with your filings.

Establishing Your Company in Bali: Step-by-Step Procedure

Here are the main steps to create your PT PMA in Bali:

1. Reserve your company name with the Ministry of Law and Human Rights.

2. Prepare the company’s articles of association with the help of a certified notary.

3. Obtain approval from the Ministry of Law for company establishment.

4. Register with the OSS (Online Single Submission), the online single window for business administrative procedures.

5. Obtain the tax identification number (NPWP) from the tax authorities.

6. Open a corporate bank account with an Indonesian bank.

7. Apply for specific licenses required for your business activity if necessary.

8. Register the company with the Ministry of Manpower if you plan to hire employees.

Timeline and costs: Allow approximately 2-3 months to complete the entire process. Establishment fees (excluding share capital) typically range between $5,000 and $10,000, including fees for the professionals assisting you.

Bali vs Other Offshore Jurisdictions: Comparative Advantages

Bali stands out from other popular offshore destinations in several ways:

Exceptional living environment: Unlike jurisdictions like the Cayman Islands or Delaware, Bali offers an environment conducive to actual relocation, combining quality of life with business opportunities.

Competitive operational costs: Business operating costs in Bali are significantly lower than in Singapore or Hong Kong, while offering privileged access to the Asian market.

Attractive taxation without being a tax haven: Bali offers an advantageous tax regime while avoiding blacklists of non-cooperative jurisdictions.

A dynamic local market: Unlike pure offshore jurisdictions, Bali offers real potential for commercial development locally and throughout Indonesia.

Positive image: Establishing a company in Bali benefits from a better image than in some controversial tax havens, a significant advantage for your brand.

Social Obligations: A Flexible Framework for Employers

Indonesian labor law offers a good balance between employee protection and flexibility for employers:

Employment contracts: Fixed-term contracts are allowed for a maximum duration of 2 years, renewable once. Permanent contracts are the norm for permanent positions.

Working hours: The legal working week is 40 hours. Overtime is strictly regulated.

Paid leave: Employees are entitled to 12 days of paid leave per year, in addition to national holidays.

Social security: Employers must contribute to health insurance and pension funds for their employees.

Termination: Dismissal procedures are regulated but less rigid than in some European countries. Severance pay is provided based on seniority.

Hiring Expatriates

Hiring foreign employees is possible but subject to certain conditions:

• Obtaining a work permit (KITAS) for each foreign employee
• Compliance with local hiring quotas (generally 1 local employee per 1 expatriate)
• Mandatory training for local employees to ensure skills transfer

Opening a Corporate Bank Account: Key Steps

Opening a bank account is a crucial step for your company in Bali. Here’s the procedure to follow:

1. Choose a bank: Opt for a recognized bank like Bank Mandiri, BCA, or BNI, which are accustomed to working with foreign companies.

• Company deed of establishment
• Tax identification number (NPWP)
• Business license (NIB)
• Passports of directors
• Proof of company address

3. Schedule an appointment with a corporate account manager at the chosen bank.

4. Make the initial deposit: The minimum amount varies by bank, typically between 10 and 50 million rupiah.

5. Activate online banking services to facilitate daily account management.

Timeline: Account opening can take 1 to 3 weeks depending on the bank and the complexity of your file.

Promising Sectors for Entrepreneurship in Bali

Bali offers numerous opportunities in various sectors:

Tourism and hospitality: Despite significant existing supply, there’s still room for innovative concepts, particularly in ecotourism and wellness tourism.

Technology and digital services: Bali attracts many digital entrepreneurs, creating a favorable ecosystem for tech startups.

Export of artisanal products: Balinese craftsmanship is world-renowned, offering opportunities in design, fashion, or decoration.

Services for expatriates: The growing expatriate community creates demand for specialized services (education, healthcare, home services).

Organic agriculture and food processing: Demand for organic and local products is growing rapidly, both in the local market and for export.

Renewable energy: Indonesia is heavily investing in green energy, creating opportunities in solar or biomass.

Recruiting in Bali: How to Build Your Dream Team

Finding the right talent is crucial for your company’s success in Bali. Here are some tips for successful recruitment:

Focus on bilingualism: Prioritize candidates proficient in both Indonesian and English to facilitate communication within your team and with partners.

Use local recruitment platforms: Sites like Jobstreet or Glints are very popular in Bali and will help you reach a wide talent pool.

Leverage your network: Bali’s entrepreneurial community is close-knit. Don’t hesitate to ask your contacts for recommendations.

Offer attractive benefits: Beyond salary, benefits like complementary health insurance or flexible hours can make a difference.

Invest in training: Balinese employees appreciate professional development opportunities. Offer regular training to retain your talent.

Managing a Multicultural Team

Leading a mixed team of local and expatriate employees requires intercultural sensitivity:

• Respect local traditions and holidays
• Adapt your management style to Balinese culture, which values harmony and consensus
• Regularly organize team-building activities to strengthen team cohesion