Bali's 18 Restricted Business Categories for Foreign Investors

As of July 23, 2026, Bali has closed the online single-submission (OSS) portal to new applications from foreign-invested companies (PMA) in 18 KBLI business categories. This is a new licensing restriction on specific business classifications — not a blanket ban on foreign investment in Bali.

Bali is tightening the channel through which foreign capital enters the province’s small-scale tourism and lifestyle-service businesses. The Bali provincial government confirmed in July 2026 that, starting from the third week of May that year, it has closed the OSS new-application portal, province-wide, for foreign-invested companies (Penanaman Modal Asing, PMA) across 18 categories under Indonesia’s Standard Business Classification (Klasifikasi Baku Lapangan Usaha Indonesia, KBLI). Affected sectors include hotels, real estate, coffee shops, vehicle rental, clothing retail, and fitness centers.

This is not “Bali banning all foreign investment.” The more accurate description is that foreign-invested companies temporarily cannot use OSS to apply for new operating licenses under the 18 specified KBLI categories, until further policy is announced. Companies that already hold a license do not automatically lose it, but they still must meet obligations such as filing investment-activity reports (Laporan Kegiatan Penanaman Modal, LKPM) and face stricter compliance checks.

For anyone planning to invest in a villa, hotel, coffee shop, or small service business in Bali, the real question to re-examine isn’t “can foreign capital still come in” — it’s whether your actual business model falls into a restricted category, and whether your registration, capital requirements, and on-the-ground operations line up.

Why Did Bali Tighten These 18 Business Categories?

On January 22, 2026, Bali Governor Wayan Koster and Todotua Pasaribu, Deputy Minister of Investment and Downstream Industries, signed an investment-control cooperation agreement at Gedung Kertha Sabha in Denpasar.

The Bali provincial government said a local assessment found that some foreign-invested companies had registered under classifications that didn’t match their actual business activity, and that some used a virtual office as their company address to enter low-risk or medium-low-risk industries that were originally dominated by local micro, small, and medium enterprises.

This is the government’s stated official rationale for the restriction — it is not a blanket judgment on all foreign-invested companies. What the policy signals is that Bali is no longer looking only at whether a company has completed online registration; it now places more weight on whether capital invested, business classification, and actual operations are consistent.

After receiving approval from the Ministry of Investment and Downstream Industries / Investment Coordinating Board (BKPM), the Bali provincial government closed the OSS new-application portal for PMA companies across the following 18 KBLI categories.

Which 18 Foreign-Investment License Categories Are Restricted?

KBLI	Business Category	Scope
55110	Star-rated hotels	Star-rated hotels with a building area under 6,000 square meters
55120	Non-star-rated (“melati”) hotels	Non-star-rated lodging
68111	Real estate activities with own or leased property	Business activity conducted using owned or leased real estate
70209	Other management consultancy activities	General management consulting services
70204	Industrial management consultancy activities	Management consulting services for the industrial sector
77100	Rental of cars, buses, trucks, and similar vehicles	Rental of cars and related vehicles
77311	Rental of motorcycles	Rental activity without a purchase option
47711	Retail sale of clothing	Specialty-store clothing retail
47511	Retail sale of textiles	Specialty-store textile retail
47249	Retail sale of other food products	Specialty-store retail of other food products
47991	Mobile retail sale of agricultural and food products	Mobile retail of agricultural and food goods
55900	Other accommodation services	Mainly covers dormitories, boarding houses, and other longer-stay, non-hotel-style accommodation
56303	Beverage stalls / coffee shops	Operation of beverage stalls and coffee shops
56305	Traditional medicine stores	Retail of traditional medicine
14120	Tailoring and made-to-order clothing	Clothing made to order
93111	Sports stadium facilities	Operation of sports-stadium-related facilities
93116	Fitness center facilities	Fitness centers and related facilities
93191	Sports-event promotion	Sports-event promotion services

This list should be read as a new restriction on specific business classifications, not as a blanket conclusion drawn from a vague industry label. A business not appearing in the table doesn’t automatically mean foreign capital can operate it freely either — investors still need to check the latest KBLI classification, foreign-investment access rules, risk level, location, and other licensing requirements.

Where’s the Catch for Villa and Short-Term Rental Investors?

Suppose a foreign investor leases a villa in Canggu, in North Kuta, Badung Regency, and then offers it to travelers as short-term nightly lodging. This example is a hypothetical scenario — it does not represent an actual enforcement case.

The core issue it illustrates is this: investors cannot judge licensing purely by whether the building is a “villa.” What matters is whether the company is actually providing real estate operation, tourist accommodation, or some other kind of service.

The Bali provincial government has specifically noted that some companies register under KBLI 68111 (“real estate activities with own or leased property”) while, in practice, building villas on leased land or engaging in short-term lodging and private-residence-related activity. When the registered classification doesn’t match the actual on-the-ground revenue model, the risk isn’t only whether a new license can be obtained — it can also raise compliance issues for an existing license.

This is also why “I bought a property” isn’t a sufficient answer to the licensing question. What actually needs to be worked out is: how the land or building was acquired, why guests are paying, whether lodging is offered nightly or monthly, who operates it, and which KBLI category the company reports its income under.

“Other Accommodation” Is Not the Same as Airbnb

KBLI 55900, on the restricted list, is “other accommodation services.” Indonesia’s OSS platform describes this category as covering mainly dormitories, student or worker housing, boarding houses, and other non-typical hotel-style accommodation.

Separately, OSS has a distinct category, KBLI 55193, “villa,” which covers privately owned homes that owners rent out to travelers and manage themselves. Airbnb, meanwhile, is the name of a booking platform — not a KBLI classification.

So rewriting “KBLI 55900 is restricted” as “Airbnb is banned” isn’t accurate. The platform is only a channel for finding guests; regulators are focused on the actual form of accommodation, how the business is run, the company’s classification, and the licenses it needs. Even if a “villa” classification doesn’t appear on this list of 18, that doesn’t mean every Airbnb listing or villa project can legally operate.

IDR 10 Billion and IDR 2.5 Billion Aren’t the Same Threshold

The capital requirements for foreign-invested companies are also one of the most easily confused parts of this policy discussion. Under Ministry of Investment and Downstream Industries / BKPM Regulation No. 5/2025, a PMA is generally required to invest more than IDR 10 billion per five-digit KBLI code, per project location — land and buildings are typically not counted toward that figure — while the company’s minimum issued and paid-up capital is IDR 2.5 billion.

In an earlier policy statement, the Bali provincial government separately required foreign investors to demonstrate that IDR 10 billion in funds has been invested or is available to invest. This is a regulatory position the local government has taken on enforcement, and it should not be conflated with the national regulation’s IDR 2.5 billion minimum paid-up capital requirement.

In other words, the two figures answer different questions: the IDR 2.5 billion figure concerns a company’s minimum issued and paid-up capital; the more-than-IDR-10-billion figure concerns the scale of an investment plan tied to a specific KBLI code and project location. An actual project may still be affected by industry- and location-specific exceptions, so compliance can’t be judged from either number alone.

What Has This Policy Actually Changed?

Bali hasn’t closed the door to all foreign investment — it has raised the bar for foreign capital entering parts of the local lifestyle-service and small-scale tourism sector. Directly affected are PMAs looking to newly set up small hotels, real estate operations, coffee shops, vehicle rentals, retail, fitness, and related services.

The policy has also changed the order of investment decisions. In the past, some investors would first acquire land or lease a property, then look for a usable business classification. Under the current environment, the more sensible order is to first define the actual business model, then check the applicable KBLI code, foreign-investment access, capital requirements, land and building use, and local licensing requirements — and only decide whether to commit to real estate or sign a long-term lease after that.

For the market, this isn’t a simple story of “foreign capital leaving” — it’s a re-sorting of business models. Low-threshold models where capital, licensing, and on-the-ground business don’t line up now face higher compliance costs; projects that can clearly demonstrate consistency between investment scale, business classification, and actual operations come closer to what the government calls “quality investment.”

Investing in Bali property shouldn’t start with “where’s hottest right now” — it should start with a more basic question: what business, exactly, will this project use to legally generate revenue?

Evaluating a Property or Business in Bali?

If you’re not sure which KBLI category your project’s actual business model falls under, whether it’s caught by these new foreign-investment restrictions, or which professionals you should check with first, ask Zagdim.

Data and sources: this article draws on public information from the Bali provincial government’s announcements dated January 23, 2026 and July 23, 2026, the OSS classification pages, Ministry of Investment and Downstream Industries / BKPM Regulation No. 5/2025, and the BPS KBLI 2025 classification as its public information base. Policy, OSS settings, and local enforcement practices may change; verify the latest official information and obtain qualified professional advice before making a transaction decision. This article is policy and market analysis and does not constitute individual legal, investment, tax, or licensing advice.

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