Bali Closes Foreign Investment Permits in 18 Business Sectors

The Provincial Government of Bali has officially closed licensing access for foreign direct investment (PMA) in 18 business sectors. The policy was adopted to protect micro, small, and medium enterprises (MSMEs) from what is deemed unfair business competition. Bali Governor Wayan Koster stated the closure was implemented by deactivating the Online Single Submission (OSS) system access for 18 Indonesia Standard Industrial Classifications (KBLI) categorised as low and medium-low risk. The policy is the result of an evaluation by the Bali provincial government into PMA business licensing. The evaluation results indicated an indication of misuse of the risk-based business licensing system by foreign investors to enter business sectors that have long been the domain of local communities. “The Bali provincial government’s licensing evaluation team sought to find indications of misuse of the risk-based business licensing system by investors to enter business sectors closely related to MSMEs,” Koster said in Denpasar on Thursday (23/7/2026). According to Koster, a number of foreign investors exploited loopholes in the OSS system by registering businesses in low-risk categories that only require a Business Identification Number (NIB). This scheme allows business actors to obtain permits automatically without the obligation to fulfil standard certificates or additional permits. He said this condition allowed several PMAs to enter business sectors that directly intersect with MSMEs, with some even using virtual offices. “This condition has the potential to create unfair business competition and exert significant pressure on the sustainability of local business actors, particularly MSMEs, in sectors that should encourage partnerships with cooperatives and MSMEs,” he stated. After obtaining approval from the Minister of Investment and Downstreaming/Head of the Investment Coordinating Board (BKPM), the Bali provincial government immediately closed OSS access for the 18 business sectors. The restricted sectors include small-scale hotels, real estate, car and motorcycle rental, retail trade of clothing and textiles, food trade, accommodation provision, drinking establishments or cafes, tailoring services, fitness centres, sports facilities, sports event promoters, and management consultancy services. Koster said the closure of OSS access has been in effect throughout Bali since the third week of May 2026. With this policy, foreign investors can no longer apply for new business permits through the OSS system in these 18 business sectors until further policy is established. However, companies that are already operating are still required to submit Investment Activity Reports (LKPM) until the relevant KBLI is deactivated or removed from the licensing system. Koster emphasised that the regional government will take firm action against any licensing violations. Nevertheless, Bali remains open to quality, responsible investment that provides benefits to the regional economy. “Incoming investment is expected to align with Bali’s development vision, respect local wisdom, and support the strengthening of a people’s economy based on MSMEs,” Koster said.