Business in Bali, The Opportunities and Requirements Needed to Open One #StartFranchise
StartFranchise.id - Bali has always been known by the international world as a tropical paradise, a vacation place where visitors could relax and enjoy the breeze. But, Bali now is not only a favored destination for holiday. It is also a land of opportunities for entrepreneurs who want to take the chance and get into the international market as Bali has a growing number of tourists. From hospitality to lifestyle products, Bali has provided the market for them to start and grow their business.
With the opportunities available, starting a business in Bali is now a priority for some of the upcoming entrepreneurs to do. But, starting a business in Bali is not as simple as having a land and making it into their business place. This article will help the upcoming entrepreneurs to understand the opportunities available and all the legal requirements needed before starting a business in Bali.
Opportunities of Opening a Business in Bali
Bali offers diverse opportunities across multiple sectors. Tourism still thrives to be the main business sector of the island’s economy supported by the island’s resources, but in recent years, supporting industries such as cafés, coworking spaces, wellness centers, creative services, and digital businesses have grown significantly. This is shown in there are a lot of new cafés that are viral in social media which capture the attention of both local and foreign visitors.
With the island’s culture, the rise of health-conscious lifestyles has also opened the opportunity for fitness studios, spas, and organic products to match the island’s peace in mind vibe. Alongside that, Bali’s reputation as a digital nomad destination as a lot of both local and foreign digital nomads have resided in Bali fueled the demand for coworking space to help them focus on their work. In short, a business in Bali can thrive not only in the traditional hospitality and services sector like in the past, but also in new lifestyle and digital sectors to adjust with the market.
Key Requirements to Open a Business in Bali
Before being able to open a business in Bali, there are these key requirements that will help in starting up the business in Bali easier and safer so that there will not be any legal problems when the business has started.
Define The Business Sector and KBLI Code
Every business in Indonesia must be registered under a KBLI (Indonesia Standard Industrial Classification). This determines whether the chosen sector is fully open to foreign investors, partially restricted, or requires a local partner. For foreign investors, this is the right time to find a local partner if your sector requires one to do so
Choose the Right Legal Entity
Locals typically open a PT (Limited Liability Company), while foreigners need to establish a PT PMA (Foreign-Owned Company) to legally operate in Bali. A PT PMA requires shareholders, a director, and a commissioner. This might be a complicated thing to do but this will ensure in the long run.
Fulfill Capital Commitments
Foreign-owned companies must meet minimum capital requirements, commonly declared as IDR 10 billion in investment. This capital commitment strengthens the legal foundation of your business so the government know the foreigners who invested in this country is able to do so.
Complete Legal Documentation
Essential documents include:
Deed of Establishment and Articles of Association
Approval from the Ministry of Law and Human Rights
A unique company name
A valid business address following Bali’s zoning regulations
Register through OSS System
The OSS-RBA (Online Single Submission – Risk Based Approach) platform provides the NIB (Business Identification Number) and necessary operational licenses. Depending on the sector, additional permits may be needed. Additional permits adjust to the business sector that the owner want to open and each sector has a different permit according to their sector.
Tax Registration (NPWP)
Every company must register for a Taxpayer Identification Number (NPWP). Businesses that meet certain revenue thresholds may also be required to register as PKP (Taxable Entrepreneurs) as regulated by the Ministry of Trade.
Visa and Stay Permits for Foreigners
Foreign investors who want to live and manage their business in Bali are going to need proper visas and can not have the visa as a visitor but open up a business. The most common is the Investor KITAS, allowing residency and management rights.
Employment Compliance
Businesses must comply with Indonesian labor law: employment contracts, minimum wage, working hours, and employee registration under BPJS social security to ensure the safety and properness of the worker’s right.
Location and Zoning
The chosen business location must align with Bali’s zoning rules. While foreigners cannot directly own land, options such as long-term leases or usage rights or maybe finding a local partner with the land is going to provide legal alternatives and solve the problem.
Professional and Local Support
Navigating legal and cultural requirements is smoother with professional consultants and local partners. This ensures compliance and provides insights into Bali’s unique market dynamics as local partners and local professional consultants will know the market more than the local but outside of Bali or even foreign investors.
Opening a business in Bali presents an opportunity for investors both local and foreign but also provides a lot of challenges, especially for foreign investors. The massive market that Bali can offer along with understanding the legal requirements will help investors in getting massive profit and ensuring success in the long run.
For future entrepreneurs who are looking for an opportunity to invest in Bali or Indonesia in general, or maybe want to know more about how to start a franchise, you can check here for the information.
