BALI – Following a strategic agreement between the Ministry of Investment/BKPM and the Provincial Government of Bali, Governor Wayan Koster has officially requested a major restriction on Foreign Direct Investment (PMA) activities within the province. This move aims to tighten oversight and ensure that foreign investment provides genuine economic contributions to the island.

The Surge of Low-Risk Foreign Projects

According to the official letter dated January 28, 2026, data from the 2021-2025 period reveals a massive influx of foreign business actors in Bali:

  • Bali currently hosts 19,262 foreign business entities (PMA), representing approximately 40% of the total national PMA registrations.
  • Total foreign projects in the province have reached 55,458, with 47.55% classified as low-risk projects.
  • These low-risk categories currently do not require standard certificates or additional licenses beyond a Business Identification Number (NIB).

Abuse of Stay Permits

The Governor highlighted a concerning trend where the Online Single Submission (OSS) system is being used as a loophole. The letter states that the current licensing scheme is frequently utilized by Foreign Nationals (WNA) solely as a means to obtain stay permits. In many cases, these entities lack real business activities and provide no significant contribution to Bali’s investment realization.

The specific sectors (KBLI) targeted for restriction include:

  • Real Estate (68111) and Management Consultancy (70209).
  • Vehicle Rentals, including motorcycles and cars (77311, 77100).
  • Travel Agencies (79121).
  • Retail Trade of clothing, textiles, and food (47711, 47511, 47249, 47991).

Request for System Closure

To restore the integrity of the investment climate, the Governor has formally requested the Minister of Investment to close OSS registration for the following categories in Bali:

  1. Foreign Investment (PMA) involving Low and Medium-Low risk activities.
  2. Foreign Investment (PMA) utilizing Virtual Offices as their business location.

Strategic Implications

This request has been carbon-copied to several high-level officials, including the Coordinating Minister for Economic Affairs and the Minister of Immigration, signaling a cross-departmental effort to synchronize investment data with immigration control. For foreign investors, this marks a shift toward a "quality over quantity" approach in Bali's investment landscape.

Source: Letter from the Governor of Bali No. Β.27.000/642/PM/DPMPTSP regarding the Request to Close PMA for Low and Medium-Low Risk Activities.

 

 

by Dipo Farizi (Legal Partner)