Bali Restricts Foreign Investment in 18 Business Sectors to Protect Local MSMEs
Bali has introduced new restrictions on foreign investment (PMA) across 18 business sectors, as the provincial government moves to protect local MSMEs (UMKM) from unfair competition. The restrictions prevent new foreign investors from applying for licences through Indonesia's Online Single Submission (OSS) system in selected low-risk and medium-low-risk business categories. The affected sectors include accommodation, real estate, vehicle rentals, retail, cafés and bars, fitness, consulting, and other businesses closely connected to local MSMEs. The Bali Government says the move follows concerns that some foreign-owned businesses were using simplified licensing requirements and certain KBLI classifications to enter sectors traditionally dominated by Indonesian-owned businesses.
What Does This Mean for Foreign Investors?
This does not mean Bali is closing its doors to foreign investment. Instead, the policy signals that Indonesia and Bali are becoming more selective about where foreign investors can operate. Foreign investors should pay closer attention to their PT PMA structure, KBLI classification, OSS licensing, business activities, and investment compliance before establishing a new business in Bali. For those interested in Bali property investment, the new restrictions are also an important reminder that owning or leasing property and operating a commercial business are separate matters. Investors considering buying a villa in Bali, developing property, or operating a villa rental business should ensure that the investment and business structure complies with the latest Indonesian regulations.
The Bottom Line
Bali remains open to foreign investment and international property investors, but the regulatory environment is becoming more structured. For foreign investors, the key is simple: understand the rules before investing, choose the correct legal structure, and conduct proper due diligence. Regulations can change. This article is for general information only and is not legal or investment advice.
