Bali is an excellent place to run a business. Here’s how to start your business in the Island of Gods.
Thinking about starting a business in the Island of Gods? You’re on a promising path: With a growing economy (the 13 largest in the region), a tax advantage over small businesses in some other region, access to several startup hubs and more, Bali is an excellent place to grow your company.
Here are some benefits of doing business in Bali, and tips for getting started.
Benefits of starting a business in Bali
There are several benefits to starting a business in Bali, including:
You can have peace-of-mind when you locate your business in Bali. The region favorable business tax structure, government policies and competitive costs make planning for future growth easy.
Access to capital
Bali offers many investment capitalists and angel investors for entrepreneurs looking to launch their business. This easy access to capital makes the startup process much simpler for budding business owners in the nation.
Tourists visiting Bali during high seasons works in favor of Bali business owners. An influx in tourists means an increase in revenue and opportunity for growth. However, this can also mean “off seasons” where you don’t earn as much profit, which is why it’s important to distribute your revenue throughout the year so you’re not left scrambling.
Quality of Life
Achieve work-life balance in the region that’s known for great weather, recreation and culture – and also offers the affordable cost of living that allows you to enjoy it all.
What are the steps to starting a business in Bali as Foreigners?
Basic steps to starting a business in Bali are as follows:
- Decide on a business structure
- Choose a business name.
- Register your business with the state.
- Open a company checking account and credit card to pay all expenses with.
- Get all the necessary business licenses and permits.
- Learn about annual and ongoing requirements for your business structure, such as how long it will be valid for and what kind of paperwork you’ll need to file with the Government.
What business licenses are required?
First is to establish a Limited Liability Company or Ltd (PT PMA). The ‘PT’ company should be owned by a minimum of two shareholders. Those can be individual or corporate shareholders or a combination of both.
The minimum investment for an FDI company is above IDR 10 billion (excluding land and building cost), while the minimum paid up and issued capital is IDR 2.5 billion. For each shareholder, at least IDR 10 million or its equivalent in USD is required.
How do I register as an PT PMA?
The business registration process consists of:
1. Apply for a temporary permit
- Applying for this temporary license is done to find out whether the business field to be taken is permitted with foreign investment or not. If allowed, the next stage can be continued. If the business cannot be carried out, the establishment of PT. PMA cannot be done. That is why before applying for a temporary permit, foreign investors must know about the Negative Investment List (DNI) issue.
2. Register for investment at the Investment Coordinating Board (BKPM)
When registering with the Investment Coordinating Board (BKPM), prepare the following documents:
- Certificate from the Embassy of the investor’s country of origin located in Indonesia.
- Scan passports.
- The company’s Articles of Association (AD) are in English, if ADA is still in Indonesian, it must be translated by a sworn translator.
- Scan the Company’s Deed of Incorporation.
- Scan NPWP.
- Original power of attorney with stamp duty signed directly by the company’s board of directors.
3. Apply for a principle license for PT. PMA
After the registration is accepted, the company that will establish PT. PMA must also prepare documents for a principle license consisting of:
- Scan passports for foreigners.
- Scan the KTP and NPWP for Indonesian citizens.
- Scan PBB place of business.
- Scan the contract letter.
- Certificate of domicile.
- Photo of the person in charge of the business 3 × 4, 2 sheets.
Together with the files above prepare too:
- Company name that will be used.
- The registered position and line of business.
- The amount of authorized capital and paid up capital.
- Share composition in detail.
- The composition of the company management.
All documents that have been collected and transferred can be uploaded to the official website of BKPM. In approximately 12 weeks there will be an official response.
4. Apply for a business license
Prepare documents in accordance with 20 Perka BKPM 2009. Documents consist of LHPP, copy of company establishment deed, registration records, copy of NPWP, proof of land use, copy of IMB, UUG / SITU, copy of LKPM, and copy of AMDAL.
What else can I do to make my small business a success?
Lean on your local resources. Bali SCORE is a great starting place that has local chapters throughout the state. SCORE volunteers consist of business experts who provide business counseling services to companies in need in the form of workshops and one-on-one sessions.
Valve Consulting — aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.