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As a foreigner, you can register a type of company in Bali called PT PMA. This stands for limited liability company with foreign ownership.
Continue reading to learn about the key requirements of a foreign-owned company registration in Bali.
Limitation to the maximum foreign ownership of a company in Bali
The legal entity type open to foreign investments is called PT PMA (limited liability company with foreign ownership). However, some business classifications have a limit to the maximum foreign ownership.
The business classifications follow Indonesian Standard Industrial Classification (KBLI). There are sectors open, open with conditions, and closed for any foreign investments.
The following are some examples of common business classifications registered in Bali by foreigners.
| Business | KBLI | Maximum Foreign Investment |
| Villa Rental | 55194 | 100% |
| Fashion E-commerce | 47912 | 100% |
| Real Estate | 68111 | 100% |
| Postal and Courier Service | 53100 | 49% |
| Magazine Publisher | 58130 | 49% (through the capital market) for a business expansion or development |
| Wooden Handicrafts (not furniture maker) | 16293 | 0% |
Requirements for foreigners to register a company in Bali
As a foreigner, you can register for a foreign-owned company (PT PMA) in Bali and also have up to 100% ownership. But, of course, some requirements need to be met.
Capital and investment for foreign-owned company registration
Based on Article 12 of PERKA BKPM 4/2021, a foreign-owned company categorizes specifically as a large business. Thus, it must follow the minimum paid-up capital of a large business.
The required minimum paid-up capital is IDR 10 billion or USD 700.000. You do not need to prove or inject capital when registering the company.
For the company registration, it is sufficient to provide a capital statement letter that Emerhub will draft for you. Capital can be transferred to the company’s account once the company is registered and a bank account for the company is opened.
Foreign-owned company structure in Bali
Below is a foreign-owned company structure as an illustration.
- 2 Shareholders – as owners of the company
- 1 Commissioner – as supervisor to the director and can be a non-resident
- 1 Resident Director – as legal representative of the company
The smallest corporate structure is having two individual shareholders that also serve the roles of the director and the commissioner.
Registered address of a foreign-owned company
To register for a foreign-owned company in Bali, you must have a commercial address. Moreover, the building permit (IMB) has to be suitable for your business activity.
For instance, if your business is a villa rental, the building permit must be for a villa or homestay (Pondok Wisata). If you have a real estate business, then the building permit must be for an office. If you have a fashion e-commerce business, the building permit must be for an office and also warehouse.
Finding a suitable property for your business registration should be the first step when registering your business.
However, if your business activity does not require a physical location, you can use a virtual office. Since it already has the necessary permits to meet legal requirements for a business address.
Emerhub has a virtual office that is located in Sanur, Bali. Our virtual office lets you have a legal address for faster company registration.
Business licenses for a foreign-owned company
Since the issuance of Government Regulation 5/2021, the operational licenses that the company must acquire depend on how the risk level of the business is set out in the law. The regulation divides business activities into 3 different risk levels, such as:
- Low risk level
- Medium risk level
- High risk level
The higher the risk level, the more licenses your company needs. Low risk companies need only the standard company licenses such as articles of association, ministry of the law and human rights approval, company tax, and operational licenses from the OSS system.
Medium or high risk businesses need additional licenses issued by the respective Ministry, institution, or local regency government. Thus, the risk level of the company highly impacts the process and timeline for your company registration.
Furthermore, there are different aspects that determine which risk level is applicable. For example, a restaurant can be classified as low, medium, or high risk level depending on the number of seats the restaurant has. Fashion e-commerce is classified as a low risk business, thus only standard company licenses are required.
Emerhub can help to determine which category of risk level your business falls under.
Frequently asked questions on registering a company in Bali for foreigners
Can I work at my company if I am a registered shareholder or commissioner?
Not if you carry a technical job. You can perform management functions but only if you are registered as a director or commissioner and have KITAS (stay permit). If you hold investor KITAS as only a shareholder, you cannot fulfill even a management function consequently.
Can I have several businesses under the same company?
Yes, but the investment requirement applies to 1 business classification if under a different sub-sector. For instance, if you want to have a consulting business and a villa, the minimum investment becomes IDR 20 billion as the two businesses are in different business fields. Besides, the investment reporting must be done separately for each of the business lines.
Does it change anything if I give a share to an Indonesian or appoint an Indonesian as a director?
No, even if a foreigner holds 1% of the shares, the company is still considered a foreign-owned company. Therefore, all of the regulations applicable to foreign-owned companies will apply.
Are tax rates different for foreign-owned companies and local companies?
No, similarly with local companies, the tax rates for foreign-owned companies depend on the company’s revenue and profit. Hence, tax rates are exactly the same for Indonesian and foreign-owned companies.
Do I have to prove the capital on the company’s account for the company registration?
No, a capital statement letter is sufficient to register a foreign-owned company in Bali. The capital can be transferred once the company is registered and a bank account is opened.
What is the investment requirement and what is the difference with the paid-up capital?
Investment is all the business-related expenses your company makes in Indonesia. Although, the price of the purchase of land is excluded from the investment. Whereas paid-up capital is the money that shareholders must transfer to the company as starting capital, and this can be used for the company’s operations.
Is there any limitation on how many shareholders or directors the company can have?
No, there is no limitation.
How many KITAS can a company sponsor?
It is not regulated by law. The shareholders are entitled to get an investor KITAS if one of the following capital requirements is fulfilled:
- IDR 1.25 billion if the person is only a shareholder
- IDR 1 billion if the person is both a shareholder and commissioner or director
Directors and commissioners listed in the company’s articles of association can also apply for KITAS. There is no limitation on how many directors and commissioners the company can have.
However, for working KITAS, it is a discretionary decision of the Ministry of Manpower on how many KITAS they consider the company needs.
Can a company own property?
Yes, your company can acquire a certificate called the Right to Build (HGB). You can learn how to safely buy a property in Bali as a foreigner here.
Registering a company allows foreigners to operate a business in Bali legally.
Fill in the form below or email us at [email protected], and our consultants can advise you about the right steps for company registration process in Bali.
Don’t forget to join our Facebook group – Doing business in Bali. As a member, you can meet and connect with other business professionals in Bali. We also feature community members on Emerhub’s social media platforms on the regular.
