Company Formation on Bali | KITAS

Bali is not only a paradise for tourists but also a hotspot for entrepreneurs and investors. From real estate and hospitality to wellness and IT, the island offers endless business opportunities. But before you can operate legally, you need the right structure: a foreign-owned company (PT PMA) and, in most cases, a KITAS (Limited Stay Permit).

In this guide, we’ll explain step by step how company formation on Bali works in 2025, why KITAS matters, and what to expect in terms of costs, timelines, and benefits.

Why Set Up a Company (PT PMA) in Bali?

A PT PMA (Perseroan Terbatas Penanaman Modal Asing) is the legal entity that allows foreigners to:

• Own and operate a business in Indonesia (hospitality, consulting, trading, digital services, real estate management, etc.).
• Acquire property under Hak Guna Bangunan (HGB) — the right-to-build title for foreigners.
• Sponsor foreign employees (including yourself).
• Hire Indonesian staff legally — essential for most sectors.
• Access the Indonesian banking system (open corporate accounts, receive payments).

Without a PT PMA, foreigners can only hold leasehold contracts or work through local nominees — which is risky and often legally problematic.

What is KITAS and Why Do You Need It?

A KITAS (Kartu Izin Tinggal Terbatas) is a limited stay permit valid from 1 to 5 years. It is essential if you plan to live in Bali long-term and actively manage your business.

Types of KITAS for investors:

• Investor KITAS — linked to PT PMA, valid 1–2 years, renewable. No work permit (IMTA) required if you are a director/commissioner in your company.
• Work KITAS — for foreign employees hired under PT PMA.
• Retirement KITAS — for those over 55, without work rights.

Most business owners choose the Investor KITAS, as it allows them to stay, manage the company, and enjoy tax benefits.

Company Formation Process on Bali

Step	Action	Timeline
1	Define business activity (hospitality, consulting, real estate, etc.)	1 week
2	Reserve company name and prepare legal documents	1–2 weeks
3	Establish PT PMA with notary and BKPM approval	3–4 weeks (longer for finance, healthcare, education)
4	Obtain permits (incl. PBG – Persetujuan Bangunan Gedung, replaced IMB)	2–4 weeks
5	Open corporate bank account in Indonesia	1–2 weeks
6	Apply for KITAS (Investor/Work KITAS)	1–2 months
7	Start business operations legally	After KITAS approval

Total time: 2–3 months for most sectors, up to 4–5 months for regulated industries.

Costs of Company Formation + KITAS

• PT PMA registration: $2,000 – $3,500 (sector dependent).
• Government fees & duties: ~$500–700.
• Legal address & domain: $200–400 annually (mandatory).
• Investor KITAS: $1,200 – $1,800 per year.
• Ongoing costs:
  • Annual company reporting & accounting: $1,000–1,500.
  • Mandatory capital reporting.
  • Tax obligations: corporate income tax 22%, VAT 11% (where applicable).

Benefits of Having PT PMA + KITAS

• Legal right to run and expand a business in Indonesia. With a PT PMA, you don’t just “rent a company name” — you own a legally recognized entity that can operate anywhere in Indonesia. This means you can sign contracts, issue invoices, rent or buy commercial property, and scale your activities without the constant fear of being shut down for operating informally.
• Stay in Bali long-term without visa runs. Forget the stress of 60-day tourist visas and border runs. An Investor KITAS allows you to live in Bali for 1–2 years at a time, with renewals available. This stability is critical if you want to focus on your business instead of worrying about immigration stamps.
• Ability to sponsor yourself, your family, or foreign staff. Your PT PMA doesn’t only benefit you — it can sponsor your own Investor KITAS, dependent KITAS for your spouse and children, and even work KITAS for foreign employees. In other words, it gives you the framework to move your life and your team to Bali legally.
• Right to hire Indonesian employees legally. Many newcomers overlook this, but hiring staff without proper contracts can create big legal risks. A PT PMA allows you to employ Indonesian workers officially, contribute to social security (BPJS), and build a compliant team. This not only keeps you safe but also builds trust with partners and clients.
• Access to local banking and corporate finance. Once your company is registered, you can open corporate bank accounts in Indonesia. This makes it easier to accept payments in rupiah, pay suppliers, and even apply for credit facilities. It also protects your personal finances, since company accounts are separate from your private ones.
• Safer property ownership through HGB titles. Foreigners cannot directly own freehold land in Indonesia. But a PT PMA can hold property under Hak Guna Bangunan (HGB) — a long-term, renewable building right that offers significantly more protection than leasehold contracts. This structure is especially important for investors in real estate or hospitality, as it secures long-term control over the asset.

Common Mistakes to Avoid

• Registering the wrong business category → license issues.
• Using a local nominee structure instead of PT PMA → high legal risk.
• Not budgeting for taxes and mandatory reporting.
• Applying for the wrong KITAS type.
• Ignoring mandatory capital reporting — common beginner’s mistake that may cause penalties.

Read also: How to Get a Long Term Stay Visa for Bali, Complete Guide To Buying Property in Bali as a Foreigner, Top Areas to Invest in Bali.

Frequently asked questions

• Can I open a business in Bali without PT PMA?
  No. Without PT PMA, foreigners cannot legally own or operate a business.
• How long does it take to get PT PMA and KITAS?
  On average, 2–3 months, but regulated sectors (finance, healthcare, education) may take 4–5 months.
• Can I buy property with PT PMA?
  Yes, PT PMA allows you to own property under HGB (Hak Guna Bangunan).
• Is there a minimum investment for PT PMA?
  Yes, the official capital requirement is IDR 10 billion (~$650,000), but only part must be shown in practice.
• Can I work in Bali with Investor KITAS?
  Yes, if you are a director or commissioner of your PT PMA, you can work without a separate work permit.
• What happens if I overstay KITAS?
  Overstays result in daily fines, problems at immigration, and may affect your ability to re-enter Indonesia.
• Can I bring my family with Investor KITAS?
  Yes, family members can get dependent KITAS sponsored by your company.

Setting up a PT PMA + Investor KITAS is the safest and most effective way for foreigners to build a business and invest in Bali. It protects your assets, allows you to operate legally, and opens doors to property ownership, banking, and long-term residency.

If you’re serious about investing or relocating to Bali, company formation is not just an option — it’s a necessity.

Want to establish a company and secure your KITAS in Bali without bureaucratic headaches? DDA Real Estate works with licensed notaries and legal partners to streamline PT PMA registration, obtain KITAS, and structure your investment legally and efficiently.

Contact us today and get a free consultation on company formation in Indonesia.