Bali is continuing to tackle one of the most sensitive issues of recent years: foreign-owned companies operating in sectors that are formally intended for locals. Indonesia’s Ministry of Investment (BKPM) has identified 613 foreign-investment companies (PMA) working in the micro and small business sector without a full set of permits.
According to Deputy Minister of Investment Todotua Pasaribu, inspections are already under way in all such cases. These are typical Bali businesses: motorbike rentals, beauty salons, photography services, small shops — the kind of work locals have traditionally relied on. On paper, the minimum capital requirements are met — for a PMA it is at least IDR 10 billion. But in practice, things are not that straightforward.
Businesses start operating without securing basic permits. Most often, this concerns location permits for a specific site, construction permits, and environmental assessments. Pasaribu says this has become almost normal in Bali: a venue is already serving customers even though, on paper, it does not yet exist.
Local communities play a significant role here. The authorities acknowledge that without their involvement many of these businesses simply would not be able to operate. A foreign investor enters a sector, and on the ground they are protected by the banjar or local middlemen.
BKPM also mentioned foreign investment from Russia. This concerns villas registered under KBLI code 6811 — a scheme in which foreigners build villas on leased land. Many projects are registered as construction, but in reality they are immediately rented out to tourists and run as full-scale rental businesses. For the state, these are different things with different document packages and permits.
As an example, Nuanu was mentioned. This does not mean the entire complex is illegal, but it is places like this where discrepancies between paperwork and actual activity are most often found at the moment.
Those who have lived off grey-area schemes for years should prepare for some unpleasant conversations. Violations may lead to fines, temporary closures, and suspension of operations until all documents are fully brought into order.
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Source: detik
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