Starting a Small Business in Bali: 7 Sectors You Should Consider

Prospective Sectors To Start A Small Business in Bali in 2025

  • InCorp Editorial Team
  • 11 September 2024
  • 7 minutes reading time

Bali offers exciting opportunities for entrepreneurs starting a small business in 2025. As the island continues to attract tourists and expatriates alike, now is the perfect time to explore the most promising sectors for starting a small business in Bali.

Can Foreigners Start A Business in Bali?

Yes, foreigners can start a business in Bali, but there are certain restrictions on the types of businesses they can establish. Foreign investment is allowed only in sectors that are open to foreign ownership.

Cost of Starting A Small Business in Bali

Starting a small business in Bali for foreigners involves various costs, including initial setup expenses and ongoing operational costs.

How much does it cost to start a business in Bali? The exact amount will depend on the business type, scale, and specific requirements.

Initial Setup Costs

  • Company Registration: Costs vary depending on the business entity chosen.
  • Legal Fees: Hiring a lawyer for the registration process and providing legal advice.
  • Office Space: Rental costs vary based on location and size.
  • Equipment and Supplies: Costs depend on the business’s needs.

Ongoing Costs

  • Taxes: Corporate income tax, VAT, and other taxes apply.
  • Permits and Licenses: Fees for obtaining necessary permits.
  • Salaries and Wages: Costs for hiring employees.
  • Utilities: Costs for electricity, water, and internet.
  • Marketing and Advertising: Costs for promoting your business.

Other Considerations

  • Living Expenses: Costs for accommodation, food, transportation, and healthcare.
  • Contingency Planning: Plan for unexpected expenses.

Type of Businesses You Can Open in Bali

With a diverse market fueled by tourism, local culture, and digital innovation, foreigners can open several businesses in Bali. Here’s a look at the key business sectors where you can start a small business in Bali.

Hospitality and Tourism

There is a high demand for services catering to the millions of visitors to Bali each year. This includes accommodation providers such as hotels, resorts, villas, food and beverage establishments, transportation services, and other tourism-related businesses.

Whether opening a guesthouse or launching a tour company, opportunities in this sector are vast and varied, making it a promising area for entrepreneurial ventures.

Creative Industries

With the island’s rich cultural heritage and a growing number of events, there is a strong demand for creative professionals in areas like design, photography, videography, and art.

Entrepreneurs with skills in these fields can tap into Bali’s thriving artistic scene, collaborating with local and international clients on projects ranging from weddings to brand campaigns and positioning their businesses for long-term success in this dynamic sector.

Online Businesses

The rise of the internet and digital technologies has opened up immense opportunities for foreigners to start small businesses in Bali from home and anywhere in the world.

With its solid expatriate community and growing digital infrastructure, Bali is an attractive location for digital entrepreneurs, whether they run e-commerce stores, offer online services, or create digital content.

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Short-term Property Rental

Investors in this sector are banking on “revenge travel”—where people vacation after being cooped up—to kick in. While vaccination programs are being rolled out globally, investors are taking this opportunity to capitalize on low rental prices and cheaper buildings.

One reason the property remains a popular option for foreigners is its flexibility—the property can be used to draw in passive income as a short-term rental on Airbnb or as a holiday home when visiting Bali.

Property maintenance and access to water, electricity, and Wi-Fi are easy. However, renting land or property can be complex due to land and property ownership regulations.

As an investor, it’s important to ensure that all necessary documents are in order, including land titles, zoning regulations, certifications, and proof of ownership.

Investing in a piece of land is no small feat and a long-term commitment. Although due diligence and background checks are rare in Bali, they are affordable services you should engage in before making any long-term commitment.

F&B Services

The culinary industry offers many opportunities for starting a small business in Bali. That said, the competition in this sector is stiff, which has attracted many daring entrepreneurs and seasoned restauranteurs to set up shop.

Despite this intensity, Bali continues to attract culinary enthusiasts worldwide with new business ideas, from food trucks to cloud kitchens and coffee drive-thru.

In addition to establishing a company to run the restaurant, new owners often require advice on KITAS, land and property ownership, and hiring their first few staff. Please find out how opening a restaurant in Bali speeds up outsourcing administrative and regulation-heavy tasks.

Retail: Fashion, FMCG & Services

Bali’s retail industry has suffered more than the F&B sector—most closed businesses (along with popular shopping belts in Seminyak and Canggu) are in the retail industry.

With so many foreclosures, this could be a rare opportunity for new brands to enter the market. But will Bali’s retail be so different post-pandemic? Or will shop space give rise to a new type of tenant?

Pieter Levels, who runs nomadlist.com, has projected that the global Digital Nomad community will reach one billion by 2035. The rise in the digital nomad population and the possibility of a digital nomad visa in Indonesia could shape the type of shops and services that would fill up vacant units in Bali.

Prospective business owners planning to set up a shop in Bali might need to cater to both travel and local consumers when deciding on the types of products and price points.

Trade & Export

With abundant natural resources, land, and human capital, exports are a key contributor to Indonesia’s economy. Indonesia—SEA’s biggest economy—has recorded a monthly trade surplus since May 2020 as coronavirus-related restrictions in the sector started to ease, and trade players were rushing to catch up.

Josua Pardede, an economist with Bank Permata, predicts Indonesia will sustain a post-trade surplus for some time due to high commodity prices.

Furniture, handicrafts, artifacts, gems, and apparel remain the top few exports for Bali and Indonesia. New trade actors planning to enter Bali must start a Trading Company.

READ MORE:

The Guide to Starting A Small Business in Bali

Here are the steps for establishing your business in Bali and navigating the legal and administrative processes efficiently.

Choose Your Business Activity

  • Research permitted business activities for foreigners on the Investment Coordinating Board (BKPM) website.
  • Choose an activity that aligns with your interests and goals.
  • PT PMA (Foreign-Owned Limited Liability Company): PT PMA Bali is the most common choice for foreigners, offering full ownership and the ability to employ foreign staff.
  • Local PT Company: Requires all shareholders to be Indonesian citizens.

Register Your Business

  • Register your business with the Ministry of Law and Human Rights in Bali.
  • Choose between online or in-person registration.

Obtain A Business License

  • Secure a business license from the local government.

Get A Tax Identification Number (NPWP)

  • Register for an NPWP at the nearest tax office.
  • This is essential for managing your business’s taxes.

Open A Business Bank Account

  • Establish a dedicated business bank account.
  • Your NPWP will be required for this step.

Secure A Business Visa

  • If you plan to work within your business, obtain a business visa from the Indonesian Immigration Office.
  • This visa ensures compliance with immigration regulations.

Guide to Doing Business in Bali & Lombok

Mailchimp Free eBook Bali & Lombok

Start Your Small Business in Bali with InCorp

Doing business in Bali requires expert guidance to navigate local regulations, ensure legal compliance, and streamline the setup process. This makes managing the administrative, tax, and licensing requirements easier.

InCorp Indonesia offers a comprehensive range of services to help you navigate the complexities of setting up a business in this tropical paradise.

Our key services include:

  • Company Registration: We’ll handle all the paperwork and formalities to ensure your company is registered efficiently and legally.
  • Business License: We will assist you in obtaining the necessary business licenses and permits.
  • Working KITAS: We’ll guide you through securing a working KITAS for you and your foreign employees.
  • Business Visa: We’ll help you obtain the appropriate business visa to enter and operate your business in Bali.
  • Investor KITAS: If you’re investing in Bali, we can assist with obtaining an investor KITAS.

Fill out the form below to turn your Bali business dreams into reality.

David Susandi

Branch Manager – Bali Office at InCorp Indonesia

Holding 11 years of experience in various roles, including project manager, operational manager, and corporate strategist, David Susandi is a prominent figure for many entrepreneurial organizations expanding in Indonesia.

Get in touch with us.

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Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.