Bali Introduces New Checks for Foreign Businesses: What Has Changed

Bali is introducing new measures against illegal foreign businesses. Authorities are creating a special task force to identify companies operated by foreigners without licenses. Such businesses are believed to exacerbate the island’s social and environmental problems, reports The Bali Sun.

Mandatory Company Registration

Bali Governor Wayan Koster announced tighter control over licensing and company registration. Official data indicate that around 400 travel agencies and rental companies in the resort area of Badung are formally owned by foreigners. Many have no offices or employees in Bali and exist only in online registration systems without any physical presence on the island. The governor described the situation as “outrageous” and demanded immediate intervention.

Officials believe that fake registrations contribute to growing problems: traffic congestion, illegal construction, environmental pollution, and the displacement of local businesses from the market. The governor stressed that without proper regulation and licensing, any attempts to address these issues would be futile. He added that Bali’s tourism sector is facing significant challenges, and an official circular with new requirements for travel agencies and businesses will be published in the coming days. All businesses will be required to register with official associations and undergo inspections to confirm their operations. Special attention will be paid to identifying “phantom” companies that exist only on paper and are used as shell structures for illegal foreign business activities.

Inspections are planned to be carried out jointly with the municipal public order agency (Satpol PP) and Bali’s criminal police (Polda Bali). These measures aim to identify and shut down businesses operating without licenses or registered fraudulently. According to the governor, the goal of the crackdown is to restore fair competition and allow local entrepreneurs to develop without being undercut by illegal foreign firms.

Koster noted that Bali is a small island but makes a significant contribution to Indonesia’s economy. Competition is not only with other regions of the country but also with countries such as Thailand and Malaysia. Enhanced controls are necessary to address economic and infrastructure problems. Foreign investors are required to comply with regulations, including a minimum capital requirement of 10 billion rupiah (about USD 613,000), excluding the cost of land and buildings. However, online registration allows circumvention of these rules through the use of local intermediaries, giving foreigners control over even microbusinesses. In such cases, locals become nominal founders but are not involved in management, with income and control remaining in the hands of foreigners.

Rules for Tourists and Migrants

At the end of March 2025, new rules came into force in Bali for foreign tourists. They are advised to wear modest clothing in cultural areas, avoid using single-use plastics, and not litter in public places. Swearing and any form of illegal work, including side jobs and unlicensed business activities, are prohibited. Driving a car or scooter is allowed only with an international driver’s license. Tourists are encouraged to choose licensed accommodations and book excursions with officially registered guides.

In 2024, Bali welcomed over 6.3 million foreign visitors. This volume of tourism has led to environmental issues and strained infrastructure. Tourists often ignore local laws and traditions. As a result, 417 foreigners were deported from the island in the first nine months of 2024—more than during the entire previous year. Among those deported were citizens of Australia (18 people), Russia (17), the USA (14), the UK (8), Iran (6), Tanzania (6), five each from Ukraine, Japan, and Germany, and four Italians. The main reasons for deportation were overstaying visas, illegal employment, visa violations, and involvement in criminal activities.

In November 2024, Indonesia established a unit to monitor foreigners’ online activities. The new service tracks posts related to illegal activities, violations of local laws, and attempts to circumvent visa restrictions. Based on such monitoring, ten individuals have already been deported.

Authorities remind visitors that a mandatory tourism levy of 150,000 Indonesian rupiah (around USD 10) applies and must be paid via the Love Bali online platform. In summer 2024, it was discovered that over 60% of guests ignored this rule. In response, random checks were conducted in popular tourist areas. So far, no fines have been imposed, but tourists are advised to keep the QR code as proof of payment.

Administrative attention also extends to foreign investors. On Bali, the so-called “Russian Village” was shut down, and its founder was arrested for building and attracting investment without permits. This practice is widespread among foreigners, but regulations are becoming increasingly strict. The island has also introduced a ban on constructing certain types of properties, including entertainment venues and hotels.

Visa Extensions

Since 29 May 2025, new requirements have been in effect in Indonesia for foreigners extending their stays. Personal visits to the immigration office are now required for photo identification and interviews. These changes apply to both tourists and migrants.

An audit of foreign investments in Q1 2025 revealed 546 foreign nationals suspected of visa violations. Authorities also found that 215 companies acting as sponsors were either fake or had lost their licenses. From January to April 2025, there were 2,201 recorded administrative violations related to foreigners’ stays, a 36.71% increase compared to the same period in 2024 (1,610 cases). Officials emphasize that tighter controls are not only a response to these figures but also a step toward strengthening law and transparency in administrative procedures.

Conclusion

On one hand, Bali’s new measures will help bring order to the tourism industry and business environment. Stricter control over company registrations and behavioral requirements for tourists will protect the local population from unfair competition, ease the burden on infrastructure, improve environmental conditions, and preserve the island’s cultural heritage. This will create conditions for the development of high-quality and sustainable tourism and allow local entrepreneurs to strengthen their positions.

On the other hand, tighter rules and strict checks might deter some foreigners, including those planning to start small businesses or stay for long periods without significant investments. Strict requirements for transparency and penalties for violations may become a deterrent for new investments in small and medium enterprises. For tourists who prefer spontaneous travel or independent planning, the new restrictions may seem overly strict and push them to choose other destinations in the region, such as Thailand or Vietnam. Ultimately, the success of the initiative will depend on whether the authorities can strike a balance between restoring order and maintaining the island’s appeal to travelers and honest investors.