PT PMA Establishment 2026: Pre-Formation Framework for Bali-Based Enterprises

Bali Policy Update 2026  |  Article 3 of 4

Article 1 in this series sets out the full regulatory landscape: the Governor’s letter, the categorical OSS restriction confirmed by TraceWorthy’s own testing, the DPMPTSP’s formal proposal to BKPM, Perda No. 4 of 2026, and the Ministry of Investment’s four proposed structural interventions. Article 2 covers the compliance obligations of existing PT PMA holders in Bali. Article 4 addresses property and land exposure under Perda No. 4 of 2026.

Forming a PT PMA (Perseroan Terbatas Penanaman Modal Asing — Foreign-Owned Limited Liability Company) in Bali in 2026 remains viable. The regulatory changes that took effect from January 2026 have not closed Bali to foreign investment. What they have done is raise the due diligence requirement before the formation process begins. The work that used to happen during or after incorporation now needs to happen before the notary is engaged. An investor who selects the wrong KBLI (Klasifikasi Baku Lapangan Usaha Indonesia — Indonesian Standard Industrial Classification) code, signs a lease on the wrong premises, or commits capital to the wrong structure before completing that pre-formation analysis will incur costs that cannot easily be reversed.

This article sets out that pre-formation framework and the formation process that follows it. Engaging a notary before resolving your KBLI risk classification is the most common and most expensive formation error in the current Bali environment.

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The OSS Risk Classification Filter: The First Question to Answer

As confirmed by TraceWorthy’s testing across multiple codes, the Online Single Submission (OSS) system blocks all low-risk and medium-low risk KBLI classifications for PT PMAs registering a Bali Province address. The rejection occurs at the Business Activities and Business Sector stage of the business licence application. The system states 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. No specific code is named. The restriction operates at the risk classification level.

Any intended business activity whose KBLI code carries a low-risk or medium-low risk classification under the OSS risk-based approach will return an OSS rejection when a Bali Province address is used. This restriction applies regardless of whether the code appears among the nine named in the Governor’s letter. The entire low-risk and medium-low risk tier is subject to the block.

The first question in the pre-formation analysis is therefore not “what do I want to do?” but “what risk classification does the KBLI code for my intended activity carry?” Where that classification is low-risk or medium-low risk, the formation cannot proceed with a Bali Province address under current OSS practice. A change to the intended KBLI, the business model, or the investment plan is required before proceeding.

Where the KBLI code for the intended activity carries a medium-high or high-risk classification, the categorical OSS restriction does not apply. The formation process can proceed, subject to the additional layers of the pre-formation framework set out below.

KBLI Selection: The Decision That Must Precede Every Other Step

KBLI selection is the gating decision in PT PMA formation. Every other step — the notarial deed, the Ministry of Law approval, the OSS registration, the capital injection — depends on having selected the right code before those steps begin. A notarised deed that names the wrong KBLI requires correction through additional notarial work. An OSS rejection after a deed has been prepared wastes professional fees and delays the formation. In the Bali 2026 environment, where the OSS block is categorical, that rejection is certain if the wrong risk classification is selected.

KBLI selection for a Bali-based PT PMA requires three independent filters to be cleared before any code is confirmed for use in the formation.

The first filter is the OSS risk classification. The code must carry a medium-high or high-risk classification to proceed through OSS with a Bali Province address.

The second filter is the Positive Investment List, governed by Presidential Regulation No. 10 of 2021 on Investment Business Fields as amended by Presidential Regulation No. 49 of 2021 on Amendments to Presidential Regulation No. 10 of 2021 on Investment Business Fields. The list determines whether a PT PMA may hold a particular KBLI code at all, and at what foreign ownership percentage. Certain sectors are reserved for Indonesian UMKM (Usaha Mikro, Kecil, dan Menengah — Micro, Small, and Medium Enterprises) and are not available to PT PMAs regardless of risk classification. Short-term tourist accommodation — villas, guesthouses, and similar categories — falls within the UMKM-reserved sector under this framework. PT PMAs are excluded from short-term tourist accommodation other than hotels. There is no KBLI in the current framework through which a PT PMA can lawfully operate daily villa rentals.

The third filter is the KBLI 2025 transition. Under Central Statistics Agency (Badan Pusat Statistik) Regulation No. 7 of 2025 on the Indonesian Standard Industrial Classification 2025, KBLI 2020 codes have been refined and in several sectors split into more specific classifications. A code that existed in KBLI 2020 may not have a direct KBLI 2025 equivalent, may have been split into sub-categories with different risk classifications, or may have changed in scope. The KBLI 2025 migration deadline of 18 June 2026 means that any formation initiated now should use KBLI 2025 codes from the outset rather than KBLI 2020 codes that will require migration shortly after formation is complete.

KBLI selection in the Bali 2026 environment is a legal analysis task, not an administrative one. It should be completed by a qualified adviser before any notarial, lease, or capital commitment is made.

The Positive Investment List and PT PMA Eligibility

The Positive Investment List is the national framework that determines which business sectors are open to foreign investment, at what ownership percentage, and subject to what conditions. It operates independently of the OSS risk classification filter. A sector may be open to PT PMA under the Positive Investment List but still carry a low-risk or medium-low risk classification that is blocked in Bali. Conversely, a sector may carry a medium-high or high-risk classification that is not blocked in Bali but be restricted or reserved under the Positive Investment List.

The interaction between the Positive Investment List, the OSS risk classification, Bali-specific restrictions, and the intended business model is fact-specific to each investor’s situation and requires legal analysis before any code is confirmed.

Several categories of business activity commonly pursued by foreign investors in Bali carry medium-high or high-risk classifications and are open to PT PMA under the Positive Investment List. Large-scale hospitality, structured professional services, technology operations with defined investment footprints, and certain education and healthcare activities are examples of the broader categories where the intersection of Positive Investment List eligibility and medium-high or high-risk KBLI classification creates a viable formation pathway. Each of those categories contains specific codes that require individual confirmation before formation proceeds.

Address Requirements: The Physical Premises Obligation

The Governor’s letter and the Ministry of Investment’s structural proposals prohibit virtual office addresses for new PT PMA applications in Bali Province. OSS requires a registered business address for each company, and that address is verified during the licensing process. A Bali address that is a virtual office will not pass this verification under the current restriction environment.

A registered business address must be identified and lease documentation confirmed before OSS registration proceeds. A Bali NIB (Nomor Induk Berusaha — Business Identification Number) cannot be obtained and an address found afterwards; the address is a prerequisite for the OSS registration process. The nature of the premises depends on the business activity: a hotel requires a physical hotel site, a professional services firm requires a verified office, a technology operation requires a credible operational location. The address must correspond to the actual business activity and must support the substance-based compliance inspection framework that the Ministry of Investment’s field inspection programme will assess from June 2026.

Capital Requirements Under BKPM Regulation No. 5 of 2025

Minister of Investment and Downstream Industry / Head of BKPM Regulation No. 5 of 2025 on Business Licensing, Risk-Based Licensing and Investment Facilities (BKPM Regulation No. 5 of 2025), effective 2 October 2025, sets the current capital framework for all new PT PMAs across Indonesia.

The minimum total investment value is IDR 10,000,000,000 (ten billion Indonesian Rupiah) per five-digit KBLI code per project location, excluding land and buildings. This is the commitment declared when registering the company through OSS, tracked through quarterly LKPM (Laporan Kegiatan Penanaman Modal — Investment Activity Report) submissions from the date the company is operational.

The minimum paid-up capital is IDR 2,500,000,000 (two billion, five hundred million Indonesian Rupiah). This amount must be deposited into the company’s Indonesian corporate bank account. Under BKPM Regulation No. 5 of 2025, the paid-up capital is subject to a twelve-month lock-up period from the date of deposit. It cannot be withdrawn during that period except for defined operational purposes: asset purchases, construction costs, and verified operational expenditure.

A new PT PMA operating in Bali under the Ministry of Investment’s proposed structural interventions may also be required to demonstrate IDR 10,000,000,000 (ten billion Indonesian Rupiah) in paid-up capital specifically, as distinct from the general minimum of IDR 2,500,000,000 (two billion, five hundred million Indonesian Rupiah). This Bali-specific capital proposal is advancing through the national policy process and should be confirmed with a qualified adviser at the time of formation.

During OSS registration, new companies are required to declare an estimated start-of-operations date. For asset-heavy projects, the OSS system generates a timeline commitment of between 18 months and five years. Failure to meet declared operational timelines triggers increased supervision, including site visits. This declaration should reflect realistic timelines that correspond to the actual business plan.

The Formation Process

Stage three: Deed of Establishment.

The notary drafts the Deed of Establishment (Akta Pendirian), which records the company’s shareholder structure, director and commissioner appointments, authorised capital, paid-up capital, KBLI codes, and registered address. Foreign shareholder documents must be legalised and translated into Indonesian by a sworn translator before the notary can accept them. Documents arriving from abroad without proper legalisation are a common source of delay. The notary submits the deed electronically to the Ministry of Law for ratification.

Stage four: Ministry of Law ratification.

The Ministry of Law issues the SK Kemenkumham (Surat Keputusan Kementerian Hukum — Ministry of Law Decree), confirming the company as a legal entity. This step typically takes three to seven working days. The company also obtains its NPWP (Nomor Pokok Wajib Pajak — Tax Identification Number) through the tax office at this stage.

Stage seven: Sector-specific licences and operational permits.

Depending on the KBLI classification and the nature of the business, additional sector-specific licences may be required before operations commence. For hospitality businesses, accommodation licences are required. For construction or development projects, a PBG (Persetujuan Bangunan Gedung — Building Approval) is required before construction begins. For healthcare or education activities, sector ministry approvals may be required. The overall timeline to fully operational status for straightforward cases is six to ten weeks. Where BKPM raises questions or sector-specific permits are required, twelve to eighteen weeks is a realistic planning assumption. Asset-heavy projects including resort development or large-scale construction should be planned on a twelve to fifteen-month timeline to full operational status.

The Construction Moratorium and Agricultural Land

In September 2025, following floods that killed at least 18 people, Governor Koster reinstated a moratorium on the conversion of productive and agricultural land to commercial construction, including hotels, villas, and restaurants. The moratorium was issued through executive directives to all regents and mayors across Bali Province and operates as a provincial governance instruction rather than a formally codified regulation. No single Pergub (Peraturan Gubernur — Governor Regulation) constitutes the moratorium as a legal instrument, which creates some uncertainty regarding its enforceability as a formal instrument, but its operational effect across local government has been widely reported and is treated as active policy.

The moratorium applies specifically to construction on productive and agricultural land. Construction on land already correctly zoned as tourism or commercial use proceeds through normal PBG processes and is not blocked by the moratorium. A PT PMA investor planning to develop on agricultural or productive land faces the moratorium directly. An investor whose intended site is tourism-zoned faces normal permitting requirements.

Confirming the zoning of any intended site through the KKPR (Kesesuaian Kegiatan Pemanfaatan Ruang — Spatial Usage Confirmation) process before any land commitment is made is therefore the operative due diligence step that the moratorium creates. Agricultural land that the market presents as suitable for development may not be permissible for commercial construction under the current policy. This confirmation belongs at the same stage as KBLI selection and Positive Investment List verification — before the notary is engaged and before capital is committed.

Why Jakarta Registration Does Not Resolve the Bali Restriction

Multiple market sources confirm that PT PMAs attempting to register in Jakarta or other provinces while conducting substantive commercial operations in Bali have faced rejection or audit. The OSS restriction applies where the business activity is conducted, not only where the company is registered. A Jakarta-registered PT PMA operating a restaurant, retail business, tourism service, or property rental in Bali will encounter enforcement scrutiny under the substance-based compliance framework that field inspectors are applying from June 2026.

Jakarta registration is viable in a narrow set of circumstances: where the business genuinely operates outside Bali Province, or where the company functions as a holding structure without direct commercial activity on the island. Outside those circumstances, Jakarta registration does not function as a route around the Bali restriction.

The Investor KITAS and Its Relationship to Formation Decisions

The Investor KITAS (Kartu Izin Tinggal Terbatas — Limited Stay Permit for investors, E28A) requires each individual foreign shareholder to hold a minimum of IDR 10,000,000,000 (ten billion Indonesian Rupiah) in personal share ownership in the sponsoring PT PMA. This is an immigration requirement set by the Directorate General of Immigration, separate from and additional to the BKPM paid-up capital minimum.

A PT PMA incorporating with IDR 2,500,000,000 (two billion, five hundred million Indonesian Rupiah) in paid-up capital and two foreign shareholders whose individual share positions are below IDR 10,000,000,000 (ten billion Indonesian Rupiah) each is compliant with BKPM Regulation No. 5 of 2025 for investment purposes, but neither shareholder meets the immigration threshold for an Investor KITAS. The company structure must be designed to meet both requirements simultaneously.

This planning must happen before the Deed of Establishment is drafted. The share ownership percentages and values recorded in the deed are the foundation of the KITAS application. Correcting them after the deed has been issued requires additional notarial work and Ministry of Law filings.

The Pre-Formation Checklist

1. Identify the KBLI code for your intended business activity under KBLI 2025 and confirm its OSS risk classification. Where the classification is low-risk or medium-low risk, formation cannot proceed with a Bali Province address under current OSS practice.
2. Verify the KBLI code against the Positive Investment List. Confirm that PT PMAs are eligible to hold that code and at what foreign ownership percentage.
3. Identify and secure physical premises in Bali Province with verifiable address documentation. The address must correspond to the actual business activity and must support a substance-based inspection.
4. Confirm the capital structure meets both the BKPM investment requirements and, where Investor KITAS eligibility is intended, the immigration shareholding threshold. These are separate requirements governed by separate instruments and must be planned together.
5. Where the company will hold or develop property in Bali, confirm the zoning of any intended site through the KKPR process. Productive and agricultural land is subject to Governor Koster’s September 2025 moratorium on conversion to commercial construction, issued as executive directives to all regents and mayors across Bali Province.
6. Obtain legal analysis of the complete formation plan, including KBLI selection, deed structure, and any sector-specific licences required before operations can commence. Relying on advice or templates from 2024 or early 2025 for KBLI selection in Bali is not safe in the current regulatory environment.

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Frequently Asked Questions

Can I still form a PT PMA in Bali in 2026?

Yes. PT PMA formation in Bali remains viable in 2026. The OSS restriction applies to all low-risk and medium-low risk KBLI classifications for PT PMAs with a Bali Province address. Formation proceeding through a medium-high or high-risk KBLI code that is eligible under the Positive Investment List is not blocked by the categorical restriction. The pre-formation analysis required before engaging a notary is more demanding than in prior years, and the physical address and capital requirements are stricter, but the pathway is open.

Which KBLI codes are available for a new PT PMA in Bali?

Any KBLI code carrying a medium-high or high-risk classification under the OSS risk-based approach is not subject to the categorical OSS restriction. The Positive Investment List must also be consulted to confirm PT PMA eligibility for the specific code. Identifying the correct code for a specific business model requires legal analysis of both filters for the intended activity.

Can I form a PT PMA in Jakarta and operate in Bali?

This approach does not function for substantive Bali commercial operations. The OSS restriction and the substance-based compliance enforcement programme address where business activity is conducted, not solely where the company is registered. Jakarta registration is viable only where the business genuinely operates outside Bali Province or as a holding structure without direct Bali commercial activity.

Do I still need IDR 10,000,000,000 (ten billion Indonesian Rupiah) in investment?

The minimum total investment value of IDR 10,000,000,000 (ten billion Indonesian Rupiah) per five-digit KBLI code per project location is unchanged. The minimum paid-up capital has been reduced by BKPM Regulation No. 5 of 2025 from IDR 10,000,000,000 (ten billion Indonesian Rupiah) to IDR 2,500,000,000 (two billion, five hundred million Indonesian Rupiah). These are two distinct requirements. The total investment value is declared and tracked through LKPM quarterly reporting over the life of the business. The paid-up capital is deposited into the company’s corporate bank account at incorporation and is subject to a twelve-month lock-up.

Can a PT PMA in Bali operate short-term tourist accommodation?

PT PMAs are excluded from short-term tourist accommodation other than hotels under the Positive Investment List framework. Short-term accommodation — villas, guesthouses, and similar categories — is reserved for Indonesian UMKM under Presidential Regulation No. 49 of 2021 on Amendments to Presidential Regulation No. 10 of 2021 on Investment Business Fields. There is no KBLI available to a PT PMA for lawful daily villa rental. Hotels remain accessible to PT PMA investment within the applicable Positive Investment List parameters.

How long does PT PMA formation in Bali take in 2026?

For a straightforward formation with a clean medium-high or high-risk KBLI code and complete documentation, the formation process from name reservation to NIB issuance typically takes six to ten weeks. Where BKPM raises questions or sector-specific permits are required, twelve to eighteen weeks is a realistic planning assumption. Asset-heavy projects including resort development or large-scale construction should be planned on a twelve to fifteen-month timeline to full operational status. The pre-formation analysis described in this article adds time before that clock begins. That time is investment in avoiding the much larger cost of correcting a formation that proceeded on the wrong KBLI.

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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 making any formation, investment, or contractual commitment in relation to a 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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