New Entrepreneurs in Bali: 5 Common Mistakes You Should Avoid

Starting a Business in Bali the Right Way without These 5 Mistakes

  • InCorp Editorial Team
  • 8 August 2023
  • 4 minute reading time

The tropical climate, natural forests, sunshine beaches, and laid-back lifestyle are among the things that make Bali a paradise for entrepreneurs interested in starting a business on the island.

Known as the Island of God in Indonesia, Bali has shown a rapid increase in the number of tourists and foreign startups. Driven entrepreneurs strike out on their own to turn their ideas into reality by launching their dreams on this beautiful island.

However, not everyone who has come here can make their dreams come true. It’s not about Bali itself, it’s about the mistakes that most entrepreneurs commit when new to the scene.

Therefore, in this article, we have prepared a list of mistakes you should avoid if you want to have a long and successful business in Bali.

Avoid Making These 5 Mistakes when Starting a Business in Bali

5 Mistakes when Starting a Business in Bali

1. Register a New Company without a Business Plan

Many entrepreneurs want to build a business in Bali without a business plan. A business plan is critical because it clearly states your business activities and classification (KBLI) before you proceed with the company registration.

Without a refined business plan, you risk paying significant amounts for changing licenses, which may cost the same as a new company registration.

2. Work without a KITAS

One of the most common mistakes new entrepreneurs commit in Bali is working illegally. In other words, you work without a work visa and stay permit or KITAS from the Ministry of Manpower.

The process of acquiring a KITAS can be challenging due to the change in regulations and foreigners’ unfamiliarity with the laws. Working illegally without a KITAS can make you lose your business, get fined, or even get deported from Indonesia. A consultation with a visa specialist is highly recommended before application.

3. Engage in an Unsafe Special Purpose Vehicle Arrangement

Using professional shareholder/director/commissioner services (make Special Purpose Vehicle arrangements) with family or friends can be extremely risky when you start your business in Bali. You may lose total control of your company with such an unofficial structure.

Special Purpose Agreements can benefit your business only when you do it properly through a licensed firm. A licensed firm can ensure that you have a legit agreement under Indonesian Laws.

Read more: A Complete Guide to Registering a Company as Foreigners

4. Use an Unqualified Company Registration Service Provider

In the business world, it is vital to understand who you’re dealing with when it comes to working together. New entrepreneurs in Bali are often more susceptible to falling into the trap of unprofessional agents who claim to be able to help them with company registration.

More than often, these deceitful agents do not know the current legislation and do not know the difference between various legal entities foreigners can choose from.

So, you must find a company registration agent with whom you have gone through proper checks and research to guide you in choosing the most profitable business in Bali.

5. Lease Property without Due Diligence

Before leasing a property for your business in Bali, it is highly recommended that you hire a professional to perform the due diligence – to check all property documentation to ensure they comply with Indonesian legal requirements.

For instance, your building permit (IMB) must be the kind that is appropriate for your company registration in Bali.

How InCorp can be of Assistance

InCorp is a business consulting firm dedicated to assisting entrepreneurs in building competitive and sustainable companies, giving startups the highest probability of long-term success in Bali.

We have the tools and resources needed to start your new endeavors with your startups in the shortest period of time

Furthermore, with years of professional experience assisting businesses of diverse industries, our experts at InCorp Indonesia can help you run a successful business and guide you on an experiential journey toward sustainable business growth.

We fully support company registration and other business solutions for various sectors.

For full information on establishing a thriving company in Bali, please contact us through the form below.

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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Disclaimer: The information is provided by PT. Cekindo Business International (“InCorp Indonesia/ we”) for general purpose only and we make no representations or warranties of any kind.

We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

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Frequent Asked Questions

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.