Starting a Business in Bali: A Check-list of Things You Should Know
Starting a business in Bali is a dream come true for many. It’s easy to see why - who wouldn’t want to make money whilst enjoying the natural beauty and sense of community the island offers? There’s just one small hitch - starting a company in Bali may be quite different compared to your home country, so we have created a checklist of things to consider before you start your Bali-based enterprise to keep you on the right track.
A growing number of expats are moving to Bali to start a business.
1.Understand Your Tax Obligations
Before you open your business, it’s important to get a clear idea of how it will affect your tax obligations. Make sure to understand what you’ll be required to pay by learning about:
Corporate tax: Learn about Indonesia’s corporate tax rates and how they apply to different business structures.
Local tax: Different businesses are required to pay different local tax rates - getting to know more about tax-friendly business options is a great start to creating a sustainable business plan.
Personal tax implications: Think about how your business will affect your personal tax situation.
Considering your taxes before investing money in your business will save you from surprises later on down the line. If you’d like help understanding taxes further, our knowledgeable team provides tax strategy consulting that can help you understand Indonesia’s complex tax system before you start your business.
2. Conduct Thorough Market Research
Bali is an island of trends - things come and go and business opportunities are constantly evolving. Before you start your Bali business, it’s important to:
Assess market saturation: conduct market research on similar businesses and decide if there is space for your idea in potentially crowded markets.
Get there first: try and find emerging trends or gaps in the market that align with your skills and passions.
Understand industry regulations: research the specific regulations that apply to your industry - if that’s property, for example, then research Indonesian laws on land ownership, zoning and the building regulations.
Remember, not all business types are open to 100% foreign ownership. Some fields, such as architecture, are only permitted if you partner with a local entity. Check the regulations and get to know your rights as a foreign business owner. If you need more help with understanding the legalities around your specific industry, don’t hesitate to contact us here at Bali Solve. We can provide useful insights and shed light on market trends with our expert business consulting services.
3. Learn About Foreign Worker Regulations
In order to structure your business properly, you should understand working laws for foreigners before you open a business. Some key things to consider are:
Work permits: Research your eligibility for obtaining a work permit in Indonesia.
Structural limitations: Keep in mind that some roles have restrictions. In Indonesia, it’s not possible for you to both be a director of a foreign owned company (PT PMA) and to take an active role in the business (for example, as the chef of a restaurant or a yoga teacher in a school).
Employment quotas: there is a set ratio of foreign to local employees that you need to adhere to.
Understanding these regulations before you open your business is crucial, since they are fundamental to how you will structure your PT PMA. If you’d like to know more about Company Setup, please check out our guide on Company Registration here.
One of the most famous beach clubs in Bali “La Brisa”.
4. Consider Sustainability and Local Values
If you plan on becoming a business owner in Bali and staying here in the long term, then think about how you can impact the island’s environment and community in a positive way. Making your business sustainable and living in alignment with the values of those around you is one of the best ways to ensure continued success. Consider:
Building sustainably: When you set up your business space, try to complement Bali’s natural beauty. In recent times, rapid development has replaced the nature and rice paddies that Bali is so famous for. Try to opt for designs that incorporate local materials and aesthetics, instead of rapidly constructed concrete spaces which detract from Bali’s nature.
Green initiatives: find ways to support the island’s natural beauty, such as planting trees, creating green spaces or designing your business around natural features.
Parking and Traffic: make sure you have enough parking to avoid contributing to congestion on the roads.
Avoid single use plastics if you are operating a food and beverage business.
If you find ways to look after the local environment, you are much more likely to garner support from locals and environmentally friendly tourists.
Final Thoughts
Whilst it may seem that there is a lot to learn, in the long run these crucial points will ensure you have a smoother journey. If it seems like too much, you can count on us to help you save time and stress. Our visa and business consulting agency, Bali Solve, is like a one-stop shop for all aspects of running a business - from tax strategy, accounting, visas, company registration to business consulting.
Since the Balinese business landscape is complex, we highly recommend using the services of a trustworthy and knowledgeable business consultant who can help you to understand the intricacies of these areas whilst providing you with cultural insights that will be invaluable. If you’d like to know more, get in touch with us via Whatsapp, email or come to our office at Bali Solve to arrange an appointment with one of our expert consultants so we can start building your dream Bali business together.
Written by Team Bali Solve
