Bali Closes 18 Business Permits for Foreign Investment to Protect Local SMEs

The Bali Provincial Government has closed access to the integrated licensing system (OSS) for 18 Indonesian Business Field Classification (KBLI) for foreign investment (PMA) to protect local businesses, particularly micro, small, and medium enterprises (SMEs). Governor Wayan Koster explained that this decision was based on an evaluation of PMA business permits, which revealed that investors were exploiting the low-risk and low-medium risk categories of the KBLI. These categories, under the OSS system, allowed for business registration with just a Business Registration Number (NIB) and minimal capital investment obligations, effectively bypassing stricter requirements. This loophole enabled foreign investors to establish businesses that directly competed with and threatened the sustainability of local SMEs. Governor Koster highlighted that this situation created unhealthy business competition and put significant pressure on local business actors. Following approval from the Minister of Investment and Head of the Investment Coordinating Board (BKPM), Bali has restricted access to the OSS system for these 18 KBLI codes. The affected sectors include accommodation, rentals, retail trade, consulting services, and other areas closely related to SME operations. Specific KBLI codes range from small-scale hotels and real estate to car rentals, clothing retail, food retail, and fitness center facilities. The closure of OSS access has been in effect across Bali since the third week of May 2026. While this prevents new PMA from obtaining licenses in these sectors through the OSS system, companies operating in these areas still have reporting obligations. Governor Koster assured that the provincial government would take decisive action against licensing violations. However, he reiterated Bali's openness to quality investments that are responsible, align with Bali's development vision, respect local wisdom, and support the strengthening of the local economy based on MSMEs.