PT PMA Regulations 2026: What Every Bali-Based Foreign Investor Needs to Know

Bali Policy Update 2026 | Article 1 of 4

Article 2 in this series addresses the compliance obligations of existing PT PMA holders in Bali directly. Article 3 covers new PT PMA formation under current conditions. Article 4 addresses property and land exposure under Perda No. 4 of 2026. This article sets out the regulatory landscape that sits behind all three.

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The regulatory environment for foreign-owned companies in Bali has shifted materially since January 2026. The changes did not arrive as a single instrument. They have arrived through a sequence of provincial and national-level actions that now combine to produce layered compliance obligations for existing PT PMA holders and significantly restricted pathways for prospective investors.

To understand why these interventions arrived when they did, the scale of PT PMA activity in Bali over the preceding four years provides necessary context. According to provincial data cited by multiple sources, Bali accounted for nearly 40% of all PT PMA registrations issued nationally between 2021 and 2025. During that period, in excess of 19,000 foreign-owned companies registered in excess of 55,000 projects in the province, the majority operating in low-risk sectors requiring only a Business Identification Number (Nomor Induk Berusaha, or NIB) to commence activities. Realised foreign direct investment in Bali grew from approximately IDR 4.22 trillion in 2020 to IDR 24.21 trillion in 2024. By the close of 2025, Bali’s PMA realisations stood at IDR 25.60 trillion, equivalent to approximately 2.84% of Indonesia’s total national FDI realisation for the year.

These figures confirm genuine foreign investor activity in Bali. They also confirm the scale of the pattern that provincial authorities identified as requiring intervention. Bali represents approximately 1.57% of Indonesia’s total population, receives 44% of Indonesia’s international tourist arrivals, and generated 40% of its PT PMA registrations over a four-year period.

That concentration, combined with sustained enforcement findings of substance-free registrations and residency-motivated structuring, is the foundation on which the regulatory response has been built.

This article covers five developments:

1. the Governor’s letter of 28 January 2026 and the categorical OSS restriction it has produced;
2. the DPMPTSP’s formal proposal to the Ministry of Investment in February 2026 and the Ministry’s first formal response;
3. Perda No. 4 of 2026 and its criminal exposure provisions for nominee land arrangements;
4. the Ministry of Investment’s substance-based enforcement programme scheduled from June 2026; and
5. the KBLI 2025 migration deadline of 18 June 2026 and its specific risk for Bali-based PT PMAs.

Bali Governor’s Letter and the Categorical OSS Restriction

Governor Wayan Koster issued a provincial executive letter on 28 January 2026, bearing reference B.27.000/642/PM/DPMPTSP, addressed to the Minister of Investment and Downstream Industry and Head of BKPM. The letter requests action through the OSS system to restrict low-risk and medium-low risk PT PMA applications in Bali Province, naming nine KBLI codes as the primary examples driving the concern. It separately requests the closure of all PT PMA applications registered to virtual office addresses in Bali.

The Governor’s letter is a provincial executive communication. Its formal binding force as a legal instrument requires specific legal analysis. What it has produced at the OSS operational level is a categorical restriction that extends beyond its nine enumerated codes.

TraceWorthy has tested multiple low-risk and medium-low risk KBLI codes against Bali Province addresses across different KBLI categories. Every test returned the same OSS rejection, displayed at the Business Activities and Business Sector stage of the business license application. The OSS system notifies applicants that business activities with low and medium-low risk levels cannot be continued for PT PMAs with a Bali Province address, citing applicable laws and regulations as the operative basis. No specific code is named in the rejection message. The restriction operates at the risk classification level, not at the individual code level.

OSS rejection notification — TraceWorthy testing, May 2026

The operative restriction for any investor considering PT PMA formation in Bali is therefore a risk-level classification, not a list of nine codes. Any KBLI code carrying a low-risk or medium-low risk rating under the OSS risk-based approach will return the same rejection for a PT PMA registering a Bali Province address.

The Basis for the Restriction

The Governor’s letter articulates two stated rationales. The first is that certain PMA licensing pathways had been used to obtain KITAS (Limited Stay Permits) and other residence permits without genuine business activity or investment contribution. The second, stated in subsequent provincial communications, is the protection of local micro, small, and medium-sized enterprises from competition by foreign-owned entities operating in sectors historically served by Indonesian businesses.

The enforcement environment preceding the letter provides direct context. Operation Wira Waspada, a joint operation conducted by the Directorate General of Immigration and the Investment Coordinating Board in January and February 2025, inspected 267 PT PMAs in Bali whose Business Identification Numbers had been revoked. The operation found 74 of those entities still actively sponsoring 126 foreign nationals. Across both phases, 520 individuals identified as fictitious investors were netted, with 63 deported and banned from re-entry. Official records indicate that in excess of 400 PT PMAs in Bali received sanctions for licensing violations and non-compliance with investment requirements through 2025 and early 2026. The investment requirement failures underlying those revocations are the same pattern the Governor’s letter seeks to address at the licensing gateway.

Multiple market sources report that the Governor sent two separate requests to BKPM over the period in question: one focused on KBLI 70209 and a second covering vehicle rental and real estate sectors including KBLI 68111. This is reported commentary rather than a document-verified account of two separate letters, and is presented on that basis.

Subsequent Provincial and National Action

The Governor’s letter was followed by formal provincial action at the national level. In February 2026, the Bali DPMPTSP formally submitted a proposal to the Ministry of Investment and Downstream Industry to close seven specific KBLI categories to PT PMAs in Bali Province. DPMPTSP head I Ketut Sukra Negara stated publicly that the seven categories had been systematically misused by PT PMAs, either to crowd out local businesses or to establish a foothold in sectors not intended for large-scale foreign capital under Indonesia’s investment framework.

As of the date of publication, one of the seven proposed categories has received formal national approval for closure from the Ministry of Investment, specifically for PT PMAs registered in Bali Province: KBLI 70209, management consultancy activities. That approval is a confirmed ministerial decision. New PT PMAs can no longer activate KBLI 70209 in Bali. The remaining six proposed categories are under national review.

Alongside the KBLI closure proposal, the Ministry of Investment has proposed four structural interventions for the Bali PT PMA environment:

1. a moratorium on KBLI categories with repeated violations;
2. a formal prohibition on PT PMAs using virtual offices as official business addresses in Bali;
3. mandatory proof of IDR 10,000,000,000 (ten billion Indonesian Rupiah) paid-up capital specifically for PT PMA companies in Bali; and
4. mandatory compliance documentation before commercial operations commence. These are advancing through the national policy process.

Following socialisation sessions conducted jointly by BKPM and the Bali Provincial Government, field inspections and substance-based compliance enforcement are expected to begin in June 2026, with the Ministry of Investment coordinating monitoring and enforcement in Bali. Industry sources report that the Governor subsequently issued a Circular Letter specifically addressing one sector, introducing a three-month transition period for existing businesses operating under that classification. The specific sector has not been confirmed in primary sources available at the time of publication. TraceWorthy will update this article as that information becomes available.

The Nine KBLIs Named in the Governor’s Letter

The nine KBLI codes specified in the Governor’s letter are the examples the Governor identified as the primary drivers of the pattern being addressed. They sit within the broader low-risk and medium-low risk category that OSS now blocks for all PT PMAs with Bali Province addresses. Any low-risk or medium-low risk code outside this nine returns the same OSS rejection.

KBLI Code	Business Classification
68111	Real estate activities with own or leased property
70209	Other management consultancy activities
77311	Rental and operational leasing of land transport equipment, without operator
77100	Rental and operational leasing of motor vehicles
79121	Travel agent activities
47711	Retail sale of clothing in specialised stores
47511	Retail sale of textiles in specialised stores
47249	Retail sale of other food products not elsewhere classified
47991	Other retail sale not in stores, stalls, or markets

These nine codes are the ones most consistently associated with the residence-permit structuring pattern and the MSME competition concern that the Governor’s letter and the DPMPTSP’s subsequent proposal address directly. KBLI 70209 carries the additional layer of formal national-level closure in Bali Province. KBLI 68111 is the code most extensively used for villa development arrangements operating outside their registered classification.

One technical point is relevant to the KBLI 2025 migration. KBLI 70209 carries forward unchanged from KBLI 2020 to KBLI 2025 without receiving a new designation. The formal national closure of KBLI 70209 in Bali therefore applies in both the existing and the incoming classification framework. Migrating to KBLI 2025 does not resolve the restriction for this code.

Existing Licences: What the Bali Restrictions Do and Do Not Affect

The OSS restriction and the Governor’s letter are prospective instruments. Businesses that obtained their NIB and business licences before the restrictions took effect may continue operating under their existing approvals. Those licences remain valid and legally recognised. No retrospective cancellation of existing licences has been proposed or implemented.

For existing PT PMA holders, the risk arises at OSS interaction points, not at the point of continued operation. The KBLI 2025 migration deadline of 18 June 2026 is the most immediate of those interaction points. Where a company’s registered code carries a low-risk or medium-low risk classification, the assessment of how to approach that migration is the first compliance question to resolve before any OSS action is taken. Article 2 in this series sets out the full compliance assessment framework and action sequence for existing PT PMA holders.

Bali Virtual Offices for PT PMAs: The Separate Restriction

The Governor’s letter contains a distinct request regarding virtual office addresses, separate from the risk-level restriction. The request asks OSS to close all PT PMA applications in Bali Province where the registered business address is a virtual office, regardless of the company’s KBLI classification. The Ministry of Investment’s structural proposals include a formal prohibition on virtual office addresses for PT PMAs in Bali.

The virtual office restriction operates on address type as a standalone criterion. A company registering a KBLI code that does not carry a low-risk or medium-low risk classification may still encounter the virtual office restriction if its registered Bali address is a virtual office.

For existing virtual office PT PMAs operating in Bali, the restriction does not apply retrospectively to registrations already in place. The forward-facing risk arises at renewal, at any amendment to company data through OSS, and at KBLI 2025 migration. Where a company carries both a restricted-classification code and a virtual office address in Bali, both restrictions may apply simultaneously when any OSS interaction is initiated.

Perda No. 4 of 2026: Criminal Exposure for Nominee Land Arrangements

Perda No. 4 of 2026 was enacted by the Bali Provincial Government on 24 February 2026. The regulation introduces provincial criminal prosecution provisions for nominee land arrangements, referencing UU 41/2009 as the applicable national law framework. Under those referenced penalties, violations carry a maximum term of five (5) years imprisonment and a fine of IDR 1,000,000,000 (one billion Indonesian Rupiah).

The provision of widest practical significance is the explicit naming of intermediaries and facilitators as persons who carry criminal exposure. Any person who assists in the arrangement, documentation, or execution of a nominee land structure in Bali Province falls within the scope of the Perda’s enforcement provisions. The criminal exposure is not confined to the parties nominally or beneficially associated with the land.

Nominee land arrangements have long been prohibited under Indonesian national law across multiple overlapping instruments. Perda No. 4 of 2026 adds a provincial enforcement instrument to that existing national prohibition, with the specific addition of the intermediary and facilitator class as named exposure holders.

Some PT PMA structures in Bali have historically interfaced with land ownership arrangements that, on examination, carry nominee characteristics. The enactment of Perda No. 4 of 2026, combined with the broader enforcement environment described in this article, requires a structural review of any such arrangements. Article 4 addresses the assessment framework in detail.

The KBLI 2025 Migration Deadline

Indonesia’s KBLI 2025 framework replaces KBLI 2020 as the national business classification standard. The migration deadline of 18 June 2026 is confirmed by a joint instrument from BKPM, the Ministry of Law (AHU), and the Central Statistics Agency (BPS). For PT PMAs whose codes do not carry a low-risk or medium-low risk classification in the context of Bali Province, the migration is largely automatic. Previously issued licenses, NIBs, and permits remain valid throughout the transition period.

The OTA Compliance Deadline and KBLI 79121

KBLI 79121, travel agent activities, is one of the nine codes named in the Governor’s letter and falls within the low-risk and medium-low risk category subject to the categorical OSS restriction. PT PMAs in Bali operating under that classification therefore face concurrent obligations: the OTA compliance requirement and the KBLI 2025 migration deadline of 18 June 2026.

A note on the OTA deadline requires transparency. The original briefing for this article established the OTA compliance deadline as 31 May 2026. Multiple external sources reference 31 March 2026 as the date by which accommodation listings on OTA platforms required valid business licences. These dates may refer to different obligations within the same compliance framework, or to a deadline that was extended. If you operate a tourism or travel business in Bali, obtain current confirmation of the operative deadline from a qualified adviser rather than relying on any single published date. TraceWorthy will clarify this point in the article’s next update.

Understanding Your Position in the Current Landscape

The Bali PMA regulations 2026 environment involves five distinct regulatory developments, each with its own timeline, operative mechanism, and category of affected entity. The chart earlier in this article illustrates the scale of the provincial policy concern that underlies all of them.

Existing PT PMA holders in Bali should understand that their existing NIB remains valid and their licence is not subject to cancellation. The risk arises at OSS interaction points, not at continued operation. The first question to resolve before initiating any OSS filing is whether your registered KBLI code carries a low-risk or medium-low risk classification under the OSS risk-based approach. Article 2 sets out the specific compliance steps and action sequence in full.

Prospective investors and those with Bali land interests will find the corresponding frameworks in Articles 3 and 4 respectively. Given the pace at which the policy environment is developing, a current legal position assessment before committing to any corporate or land transaction in Bali is the single most effective risk management step available.

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Frequently Asked Questions

Is my existing Bali PT PMA at risk of being cancelled?

No. Existing NIBs and business licences issued before the restrictions took effect remain valid and legally recognised. Existing licences are not subject to retrospective cancellation. The risk for existing holders arises at specific OSS interaction points, not at the point of continued operation.

Which KBLI codes are restricted for new PT PMA applications in Bali?

The restriction applies at the risk classification level, not at the individual code level. OSS blocks all low-risk and medium-low risk KBLI classifications for PT PMAs with a Bali Province address. TraceWorthy has confirmed this through testing across multiple codes. Nine codes were specifically named in the Governor’s letter of 28 January 2026 as the primary examples driving the restriction. At the national level, KBLI 70209 has received formal closure approval from the Ministry of Investment, specifically for Bali Province.

Does the virtual office restriction apply to all PT PMAs in Bali regardless of sector?

The restriction applies to all PT PMA applications in Bali Province where the registered address is a virtual office, regardless of KBLI classification. Existing entities registered to virtual office addresses are not automatically affected, but face risk at renewal, amendment, or KBLI migration.

What does substance-based compliance mean for my company?

From June 2026, field inspections by the Ministry of Investment will assess whether your company’s actual operational activities match its registered KBLI code and whether your declared investment value is being realised. KBLI 68111 illustrates the compliance risk directly. Under KBLI 2020, it authorised long-term real estate operations and did not cover short-term tourist accommodation. Under KBLI 2025, introduced by BPS Regulation No. 7 of 2025, KBLI 68111 has been refined to cover residential development for sale specifically, while long-term residential rental has been reclassified to KBLI 68112. Short-term tourist accommodation is also reserved for Indonesian UMKM entities under Presidential Regulation No. 49 of 2021, which governs the Positive Investment List. PT PMA entities are excluded from operating short-term tourist accommodation other than hotels. A company using KBLI 68111 to generate villa rental income was operating outside its registered classification and in a sector from which PT PMA investment is prohibited.

Can I register a PT PMA in Jakarta with a Bali operational address to avoid these restrictions?

This approach is extremely limited in practice. Existing companies have already faced scrutiny for conducting Bali operations through a Jakarta-registered entity. It requires case-specific legal analysis and should not be treated as a workable general solution.

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This article provides general information only. It does not constitute legal advice and does not address any specific company’s circumstances. The regulatory environment described is active and evolving; the information reflects sources available at the time of publication and will be updated as the policy position develops. Readers should obtain specific advice from a qualified legal adviser before taking any action in relation to their PT PMA or business interests in Bali. TraceWorthy provides advisory and legal drafting services for PT PMAs, foreign investors, and expatriates operating in Bali and across Indonesia.

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