Bali has long been one of Indonesia’s most attractive destinations for foreign investors. The growth of tourism, hospitality, wellness, real estate, and various service sectors has made Bali one of the most sought-after investment destinations. However, entering 2026, the regulatory landscape is changing. The Government is increasingly strengthening its supervision of Foreign Investment (Penanaman Modal Asing or “PMA”) activities in Bali.
Supervision now goes beyond whether a company has a Business Identification Number (NIB) or business license. It also examines whether the business activities are consistent with the applicable KBLI, business location, spatial planning, zoning, basic requirements, and foreign investment regulations. In January 2026, the Ministry of Investment/BKPM, together with the Bali Provincial Government, also established the Investment Implementation Control Desk (Desk Pengendalian Pelaksanaan Penanaman Modal) to strengthen investment supervision and enforcement in Bali.
So, What Does This Mean for Foreign Investors Planning to Invest in Bali?
Foreign Investment in Bali Is Not Prohibited, but It Is Becoming More Selective. Bali does not prohibit all foreign investment. However, recent regulatory developments indicate that foreign investment in Bali is becoming more selective and highly regulated. The Government is paying increasing attention to the types of business activities carried out by PMA companies, the suitability of their KBLI classification, business location, and compliance with spatial planning and licensing requirements.
In July 2026, the Bali Provincial Government announced the closure of OSS access for 18 specific KBLI classifications for PMA companies, including certain business activities in real estate, accommodation, consultancy, vehicle rental, retail, cafés, fitness, and sports. This means that foreign investors still have opportunities to invest in Bali, but not every type of business can be operated in the same manner or in the same location.
So, what should foreign investors do before invest in Bali?
For foreign investors, the first step should not be to immediately purchase land, lease property, or establish a PT PMA. The first step should be to determine whether the proposed investment is legally feasible. Investors need to ensure that the proposed business activity is open to foreign investment, can be conducted through a PT PMA structure, and uses a KBLI classification that accurately reflects the actual business activities.
Next, investors should conduct a KBLI and zoning assessment. The proposed business location must be reviewed for compliance with the applicable spatial planning and zoning regulations. Accordingly, investors need to understand not only, “What business can I operate?”, but also, “Where can I legally operate that business?”.
After that, licensing and regulatory due diligence should be conducted, including a review of the PT PMA structure, NIB, risk-based business licensing, KKPR, as well as applicable building, environmental, and other relevant sector-specific licensing requirements. This is particularly important before signing a land purchase or lease agreement, as zoning or licensing issues discovered after the transaction has been completed may create greater legal and financial risks.
So, what should foreign investors do before invest in Bali?
For foreign investors, the first step should not be to immediately purchase land, lease property, or establish a PT PMA. The first step should be to determine whether the proposed investment is legally feasible. Investors need to ensure that the proposed business activity is open to foreign investment, can be conducted through a PT PMA structure, and uses a KBLI classification that accurately reflects the actual business activities.
Next, investors should conduct a KBLI and zoning assessment. The proposed business location must be reviewed for compliance with the applicable spatial planning and zoning regulations. Accordingly, investors need to understand not only, “What business can I operate?”, but also, “Where can I legally operate that business?”.
After that, licensing and regulatory due diligence should be conducted, including a review of the PT PMA structure, NIB, risk-based business licensing, KKPR, as well as applicable building, environmental, and other relevant sector-specific licensing requirements. This is particularly important before signing a land purchase or lease agreement, as zoning or licensing issues discovered after the transaction has been completed may create greater legal and financial risks.
Investing in Bali requires more than finding the right opportunity. Make sure your investment is legally feasible. For further information, please contact Schinder Law Firm at info@schinderlawfirm.com.
Author:
Budhi Satya Makmur