starting a small business in bali

Prospective Sectors To Start A Small Business In Bali in 2021

  • InCorp Editorial Team
  • 18 September 2018
  • 4 minute reading time

In March 2020, COVID-19 had effectively shut down the majority of retail locations all over the world, forcing consumers to change their travel and consumption behaviors. In Bali, many business owners were forced to make a tough decision – close down or persevere to find a way to keep afloat. Fortunately, the foreclosure of businesses in Bali has brought about a stream of new investors, as prime locations opened up, and land prices took a dip.  Here are a few sectors that continue to remain popular among investors if you’re starting a business in Bali.

Short-term Property Rental

starting a business in bali - villa rentingInvestors diving into this sector are banking on “revenge travel” – where people vacation after being cooped up, to kick in. While vaccination programs are being rolled out globally, investors are taking this opportunity to capitalize on low rental prices and cheaper buildings. One of the reasons, the property remains a popular option for foreigners is because of its flexibility – the property can be used to draw in passive income as short-term property rental on Airbnb and used as a holiday home when visiting Bali. Property maintenance and access to water, electricity, and Wi-Fi are fairly easy to accomplish. The complexities around renting land or property often relate to land and property ownership regulations. As an investor, you’ll need to ensure the right paperwork are in place, these include land titles, zoning regulations, certifications, and ownership to name a few.

READ MORE: MORE ON LAND & PROPERTY OWNERSHIP

Investing in a piece of land is no small feat and a long-term commitment. Although due diligence and background checks are rare services in Bali, they are affordable services that you should engage in before making any long-term commitment.

F&B Services

starting a business in bali - culinary industry

The culinary industry offers a huge number of opportunities for starting a business in Bali. That said, the competition in this sector is stiff – it has attracted many daring entrepreneurs and season restauranteurs to set up shop. Despite this intensity, Bali continues to attract culinary aficionados from all over with new business ideas; from food trucks to cloud kitchens and coffee drive-thrus.

Asides from establishing a company to run the restaurant, new owners often require advisory on KITAS, land and property ownership, and hiring their first few staff. Find out how new restaurant owners are speeding up their outsourcing administrative and regulation-heavy tasks.

Retail: Fashion, FMCG & Services

starting a business in bali - boutique textile and garments

Compared to the F&B sector, Bali’s retail has taken a bigger hit – the majority of businesses (along popular shopping belts in Seminyak, Canggu) that have closed, fall into the retail sector. With so many foreclosures, this could be a rare opportunity for new brands to enter the market. But will Bali’s retail be so different post-pandemic? or will shop space give rise to a new type of tenants?

According to Pieter Levels, who runs nomadlist.com, has projected that the global Digital Nomad community will reach one billion by 2035. The rise in the Digital nomad population and the possibilities of a Digital Nomad Visa in Indonesia could shape the type of shops and services that would fill up vacant units in Bali. Prospective business owners who are planning to set up a shop in Bali might need to cater to both travel and local consumers when they decide on the types of products and price points.

 

Trade & Export

export of handmade and art productsWith an abundance of natural resources, land, and human capital, export is a key contributor to Indonesia’s economy. Indonesia – SEA’s biggest economy recorded a monthly trade surplus since May 2020 as coronavirus-related restrictions in the sector started to ease out and trade players were in a rush to play catch up. Josua Pardede, an economist with Bank Permata predicts Indonesia will sustain a post-trade surplus for some time, on the back of high commodity prices.

Furniture, handicrafts, artifacts, gems, and apparel continue to remain the top few exports for Bali and Indonesia. New trade actors planning to enter Bali will need to start a Trading Company.

READ MORE: STARTING A TRADING COMPANY

 

How Can Cekindo Can Help

For foreign entrepreneurs who are thinking about starting a small business in Bali, we suggest that you should spend some time in Bali, and decide what type of business has the best chance of success. Indonesia like every country has its unique business culture – and we have an article on navigating Indonesia’s business culture. When you’re ready to start your small business in Bali, see how you can set up your business.

David Susandi

Branch Manager – Bali Office at InCorp Indonesia

Holding 11 years of experience in various roles, including project manager, operational manager, and corporate strategist, David Susandi is a prominent figure for many entrepreneurial organizations expanding in Indonesia.

Get in touch with us.

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Frequent Asked Questions

As their names suggest, the main differences between the three business kinds in Indonesia lie in the businesses and the purpose of their incorporation. Local company owners (PT) must be Indonesian citizens, as even 1 percent of foreign ownership is not allowed. This type of company is not limited to entering any business field, and restrictions on incorporation are not so tight. On the contrary, a foreign-owned company (PT PMA) is open to international investors, but the maximal percentage of foreign shares differs in various business sectors. Contact InCorp to get the most updated information on the Negative Investment List. International investors tend to open representative offices as a first step to understanding the Indonesian market before setting up a limited liability company. This type is used for marketing and promotion activities and needs the right to sell directly and receive income.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

Yes, this mainly applies to import and export businesses. Instead of establishing a company, you can use an under-name import service, an importer of record.

It should take between 30 to 45 days.