Bali’s 18 Business Restrictions: What Foreign Founders Can Still Do in 2026

Thinking about starting a business in Bali as a foreigner? Indonesia is generally open to foreign investment, but not every business activity can be operated by a foreign-owned company without conditions.

For foreign founders planning a PT PMA in Bali, the most important question is not simply whether a business is “allowed” or “not allowed.” You need to check the relevant KBLI (Klasifikasi Baku Lapangan Usaha Indonesia), foreign ownership rules, investment requirements, licensing obligations and any Indonesian partnership requirements.

As of 2026, Indonesia’s investment framework is based principally on Presidential Regulation No. 10 of 2021 as amended by Presidential Regulation No. 49 of 2021, while business licensing is governed by the risk-based licensing framework under Government Regulation No. 28 of 2025.

Is There an “18 Business Restrictions” List for Bali?

Not exactly.

There is no separate national regulation that says 18 specific businesses are prohibited to foreigners in Bali.

Instead, Indonesian investment rules use several categories:

The basic principle under Perpres 49/2021 is that commercial business activities are open to investment unless they are specifically closed or are activities that can only be conducted by the Central Government.

This means that foreign founders should be careful when they see online articles claiming that a particular Bali business is simply “banned for foreigners.”

The actual KBLI and applicable conditions must be checked.

18 Business Areas Foreign Founders Should Check Carefully

The following are 18 business areas that foreign entrepreneurs commonly encounter when considering a business in Bali. They do not all have the same legal status.

1. Alcohol manufacturing

Certain alcohol manufacturing activities are expressly closed to investment.

The three KBLI codes specifically identified as closed under Perpres 49/2021 are:

This does not mean that every Bali business involving alcohol is prohibited to foreign investors. Manufacturing, distribution, retail and hospitality activities can fall under different KBLI classifications and must be assessed separately.

2. Gambling and casinos

Gambling and casino activities are closed to investment.

A foreign investor therefore cannot establish a PT PMA in Bali to legally operate a casino or gambling business.

This is a true investment restriction, rather than simply a licensing issue.

3. Narcotics-related activities

Certain narcotics-related activities are closed under Indonesian investment law.

This is another category where the restriction is national and not specific to Bali.

4. Chemical weapons

Manufacturing chemical weapons is among the activities closed to investment.

For foreign investors, this is clearly outside the permitted scope of a PT PMA.

5. Certain hazardous chemical activities

Certain activities involving chemicals identified under the investment regulations can be restricted or closed.

The exact classification should be checked against the applicable KBLI and current sectoral regulations rather than relying on a general description.

6. Certain protected-species fishing

Fishing activities involving protected species covered by applicable international conservation requirements can be subject to investment restrictions.

A foreign investor considering a fishing or marine business therefore needs to assess the exact species, activity and KBLI.

7. Coral extraction

Certain activities involving the extraction of coral from nature are restricted.

This is particularly relevant to businesses involving marine resources and should not be confused with ordinary tourism or diving activities.

8. Defence-related manufacturing

Certain defence industries are subject to foreign ownership restrictions and specific government approval.

For example, the investment framework includes restrictions for activities such as weapons, military vehicles, defence radar, warships and military aircraft.

These are not typical Bali startup sectors, but they demonstrate why “foreign investment is open” does not mean every KBLI allows 100% foreign ownership.

9. Domestic sea transportation

Certain domestic sea transportation activities remain subject to foreign ownership restrictions.

This can include specific passenger, tourism and cargo transportation activities.

The applicable KBLI must therefore be checked before a foreign-owned company enters the Indonesian maritime transportation sector.

10. Air transportation

Certain commercial aviation activities are subject to foreign ownership limitations.

The relevant rules can require foreign ownership to remain at a maximum of 49%, together with requirements concerning Indonesian ownership.

This is very different from operating an ordinary travel or tourism company in Bali.

11. Courier services

Certain courier activities are subject to foreign ownership restrictions.

For example, KBLI 53201 is listed among activities subject to a maximum 49% foreign ownership under the investment framework.

A foreign entrepreneur should therefore distinguish between courier services and other logistics, consulting or technology activities that may have different KBLI classifications.

12. Businesses reserved for cooperatives and UMKM

Some activities are allocated to Indonesian cooperatives or micro, small and medium enterprises, or may require partnerships.

These businesses should not automatically be described as “banned for foreigners.” The legal question is whether the particular activity is reserved, subject to a partnership requirement, or otherwise open under the applicable rules.

Perpres 49/2021 contains a dedicated category for businesses allocated to cooperatives and UMKM.

13. Traditional and cultural industries

Certain smaller-scale or traditional industries can fall within activities allocated to Indonesian cooperatives or UMKM.

For example, the investment framework includes certain traditional manufacturing activities.

A foreign founder interested in producing local crafts or traditional products should therefore check the KBLI and investment conditions before establishing the company.

14. Certain food-processing activities

Some food-processing activities appear in the cooperative/UMKM allocation framework.

This does not mean that foreigners cannot operate a restaurant, café or food company in Bali. It means the actual business activity and KBLI matter.

A foreign-owned restaurant should therefore not use a KBLI simply because it sounds commercially similar.

15. Certain traditional industries

Activities such as certain batik, wood, coconut, essential-oil and ceramic industries can be subject to specific investment treatment depending on the exact KBLI.

For a foreign investor, the important distinction is between an activity that is completely closed and one where the rules provide for Indonesian SME participation or another condition.

16. Property development

Real estate is not generally prohibited to foreign investors.

However, property businesses are highly sensitive to the distinction between:

• property development;
• property management;
• accommodation;
• leasing;
• brokerage;
• construction; and
• ownership or use of land.

Each activity can have a different KBLI and different legal requirements.

This is particularly important in Bali, where foreign investors frequently establish businesses involving villas, hotels, land and hospitality operations.

17. Villa and accommodation businesses

A foreign investor can potentially operate a legally structured accommodation business in Bali, but the correct KBLI and tourism licensing requirements must be assessed.

A villa business should not simply be registered under a generic property KBLI because the investor owns the property.

The legal structure should reflect what the company actually does—for example, operating accommodation, managing properties or providing another hospitality service.

18. Restaurants, cafés and lifestyle businesses

Restaurants and cafés are among the most common businesses considered by foreign founders in Bali.

They are not automatically prohibited to foreigners.

However, the company still needs the correct KBLI and must satisfy the applicable business licensing, location, health, food, alcohol and other regulatory requirements, depending on the actual operation.

This is why “Can a foreigner open a restaurant in Bali?” cannot always be answered with a simple yes or no.

What Can Foreign Founders Still Do in Bali?

The good news is that the Indonesian investment framework is broadly open to foreign investment.

BKPM states that, under the current framework, all business activities are generally open to 100% foreign ownership except activities subject to specific conditions, while businesses that are closed remain excluded.

For a foreign founder, this means many common Bali businesses can potentially be structured through a PT PMA, including businesses in areas such as consulting, technology, certain tourism activities, hospitality, professional services and other commercial sectors—provided the specific KBLI is open and the required licences are obtained.

The key is choosing the correct structure before the company starts operating.

What Should You Check Before Setting Up a PT PMA in Bali?

A foreign founder should conduct a KBLI and investment review before incorporation.

The current business licensing framework is governed by PP 28/2025, which replaced PP 5/2021 and uses a risk-based approach. The regulation links each KBLI to the relevant risk level, business licensing and applicable requirements.

What About the IDR 10 Billion PT PMA Investment Requirement?

Foreign founders should also distinguish between foreign ownership restrictions and minimum investment requirements.

As a general rule, a PT PMA is subject to a minimum investment requirement of more than IDR 10 billion, excluding land and buildings, calculated according to the applicable KBLI and location rules. However, regulations provide specific calculation exceptions for certain sectors, including some wholesale trade, food and beverage services, construction and manufacturing activities.

Therefore, an activity being open to 100% foreign ownership does not mean that it can necessarily be operated through a small-capital PT PMA.

Do Bali Businesses Have Different Foreign Ownership Rules?

The main foreign investment restrictions come from national Indonesian regulations, not from a separate general “Bali foreigner blacklist.”

However, Bali businesses can face additional local and sector-specific requirements, particularly concerning land use, spatial planning, buildings, tourism, accommodation, environmental requirements and local operational compliance.

For this reason, checking the KBLI alone is not enough.

A foreign investor planning a villa, restaurant, wellness business, property company or tourism operation should assess the entire business model before incorporation.

Final Takeaway for Foreign Founders

The biggest mistake is to ask:

“Is this business restricted to foreigners in Bali?”

The better question is:

“What is the correct KBLI, and what conditions apply to foreign investment in this activity?”

Indonesia’s current investment framework is considerably more open to foreign investment than older regulations. At the same time, some activities remain closed and others are subject to foreign ownership, Indonesian partnership or sector-specific requirements.

For a PT PMA in Bali, the safest approach is to determine the actual business model first, identify the correct KBLI 2025, check foreign investment eligibility, and then review the required business licences and location requirements.

If you are planning to start a business in Bali, ILA Global Consulting can review your proposed activities, identify the appropriate KBLI and assess whether the intended structure is suitable for a foreign-owned company in Indonesia before incorporation.