Among the endless business opportunities available in Bali, running a clothing business is a popular option. It would be a dream come true for any foreign entrepreneurs to work and live in this paradise while seeing their business prosper.
However, no industry is entirely easy to break into. It takes hard work, determination and of course, an understanding of the legal aspects to run a successful clothing business in Bali.
This article elaborates everything you need to know to start a clothing business in Bali.
Business sectors and activities that are covered under Bali’s clothing business in this article include the following:
The business classification (KBLI) and maximum foreign ownership (FO) of the aforementioned clothing business activities are listed below:
Clothing and garments manufacturing
Clothing distribution to retailers and individual sellers
Online clothing store (local and international)
Retail clothing shop (including boutique with branded items)
There is an increased shift of foreign manufacturing to Bali because of the lower costs and the good quality of material. The premium fabric and exotic culture and nature make Bali a perfect place for branded clothing business.
However, the business classification of clothing business is vague in Bali and can be confusing to foreign investors. Sometimes, the law might need to you set up different legal entity for each business classification for your clothing business.
Obtain the Right Building Permit (IMB)
Foreigners often encounter issues when renting or buying a commercial building with the right building permit IMB.
For business owners who want to start a manufacturing, you are required to get a “factory” permit. Make sure you get the right permit from the start because any changes made after that due to the incorrect permit is complicated, costly and time-consuming. Each district in Bali has different requirements for the IMB.
Therefore, it is advisable to collaborate with a manufacturing factory in Bali and make use of their existing permit. You can also outsource your production to these manufacturing facilities. Cekindo can match you with a reliable manufacturing company with the right license.
No Combination of Business Activities with Different KBLI
Clothing manufacturing belongs to its own KBLI and it cannot be combined with your other clothing business activities such as distribution, e-commerce and retail. Each of these activities has a different KBLI and thus a separate entity.
This activity is very common as most business owners have already had their clothing items ready for distribution.
You just need to apply for “trading” under KBLI for import, export and distribution of your products. You can sell your products to other businesses but not to end users.
Online store (also known as e-commerce) is now a trend in Bali and even the clothing retailers have set up their e-commerce websites for online purchases.
Clothing Export and Import in Bali
If your business activity belongs to the e-commerce category, you are not allowed to import or export goods. In this case, you will have to apply for a KBLI known as “trading”. Alternatively, you can also make use of undername export/import.
For this business activity, you will have to obtain the IMB known as “shop” or “retail shop”. IMB is often applied during the construction stage. Thus, always remember to request for specific paperwork to make sure you have the right IMB.
Since no foreign ownership is allowed for this KBLI, you can open your boutique or shop at a big department store. Alternatively, you can make use of nominee company arrangement.
If you require further information on each of the business activities related to the clothing business, Cekindo’s team of professional consultants and legal experts is pleased to help.
Contact Cekindo now to discuss the best option for you to set up your clothing business in Bali. Fill in the form below or visit us on-site in Badung. Seize one of the business opportunities in Bali now.