how do you run a successful clothing business in bali

How Do You Run A Successful Clothing Business in Bali?

  • InCorp Editorial Team
  • 7 August 2023
  • 4 minute reading time

Among the endless business opportunities available in Bali, running a clothing business is a popular option. It would be a dream come true for any foreign entrepreneurs to work and live in this paradise while seeing their business prosper.

However, no industry is entirely easy to break into. It takes hard work, determination and of course, an understanding of the legal aspects to run a successful clothing business in Bali.

This article elaborates everything you need to know on how starting a business in Bali as a foreigner.

Business Opportunities in Bali: Clothing Business

Business sectors and activities that are covered under Bali’s clothing business in this article include the following:

  • Clothing and garments manufacturing
  • Clothing distribution to retailers and individual sellers
  • Online clothing store (local and international)
  • Retail clothing shop (including boutique with branded items)

The business classification (KBLI) and maximum foreign ownership (FO) of the aforementioned clothing business activities are listed below:

Clothing and garments manufacturing

  • KBLI: manufacturing
  • FO: 100%

Clothing distribution to retailers and individual sellers

  • KBLI: distribution
  • FO: 67%

Online clothing store (local and international)

  • KBLI: e-commerce
  • FO: 100%

Retail clothing shop (including boutique with branded items)

  • KBLI: retail trading (department store is not included)
  • FO: 0%

bali business opportunities clothing

Clothing and Garments Manufacturing in Bali

There is an increased shift of foreign manufacturing to Bali because of the lower costs and the good quality of material. The premium fabric and exotic culture and nature make Bali a perfect place for branded clothing business.

However, the business classification of clothing business is vague in Bali and can be confusing to foreign investors. Sometimes, the law might need to you set up different legal entity for each business classification for your clothing business.

Obtain the Right Building Permit (IMB)

Foreigners often encounter issues when renting or buying a commercial building with the right building permit IMB.

For business owners who want to start a manufacturing, you are required to get a “factory” permit. Make sure you get the right permit from the start because any changes made after that due to the incorrect permit is complicated, costly and time-consuming. Each district in Bali has different requirements for the IMB.

Therefore, it is advisable to collaborate with a manufacturing factory in Bali and make use of their existing permit. You can also outsource your production to these manufacturing facilities. InCorp can match you with a reliable manufacturing company with the right license.

No Combination of Business Activities with Different KBLI

Clothing manufacturing belongs to its own KBLI and it cannot be combined with your other clothing business activities such as distribution, e-commerce and retail. Each of these activities has a different KBLI and thus a separate entity.

Clothing Distribution in Bali

This activity is very common as most business owners have already had their clothing items ready for distribution.

You just need to apply for “trading” under KBLI for import, export and distribution of your products. You can sell your products to other businesses but not to end users.

Online Clothing Store in Bali

Online store (also known as e-commerce) is now a trend in Bali and even the clothing retailers have set up their e-commerce websites for online purchases.

Clothing Export and Import in Bali

If your business activity belongs to the e-commerce category, you are not allowed to import or export goods. In this case, you will have to apply for a KBLI known as “trading”. Alternatively, you can also make use of undername export/import.

Clothing Retailers and Boutiques in Bali

For this business activity, you will have to obtain the IMB known as “shop” or “retail shop”. IMB is often applied during the construction stage. Thus, always remember to request for specific paperwork to make sure you have the right IMB.

Since no foreign ownership is allowed for this KBLI, you can open your boutique or shop at a big department store. Alternatively, you can make use of Special Purpose Vehicle company arrangement.

Set up Your Clothing Business in Bali with InCorp

If you require further information on each of the business activities related to the clothing business, InCorp’s team of professional consultants and legal experts is pleased to help.

Contact InCorp now to discuss the best option for you to set up your clothing business in Bali. Fill in the form below or visit us on-site in Badung. Seize one of the business opportunities in Bali now.

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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We do not act as an authorized government or non-government provider for official documents and services, which is issued by the Government of the Republic of Indonesia or its appointed officials.

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Frequent Asked Questions

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.

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.