Beyond Bali Series · Part 1 · 2026
Beyond Bali: Where to Invest in Indonesia in 2026
For twenty years, the path for foreign investors in Indonesia was straightforward. Set up a PT PMA (foreign-owned company) in Bali, pick a business classification (KBLI code), register through the Online Single Submission (OSS) system, and go. In 2026, that path changed. Beyond Bali, however, Indonesia still offers four islands that experienced investors are looking at seriously — Lombok, Sumbawa, Sumba, and the Mentawai Islands. This is the first in our series covering each one in detail.
Series: Beyond Bali · Part: 1 of 5 · Published: 2026 · By: Smart Advisory Solutions
Bali KBLI Block
May 2026
Low and medium-low risk PT PMA registrations closed
Minimum Investment
IDR 10B
Per KBLI code and location — applies nationally
Islands Covered
4
Lombok, Sumbawa, Sumba, Mentawai
The Bali PT PMA Restrictions 2026
What Actually Changed — and Why It Matters Beyond Bali
In January 2026, the Governor of Bali sent a formal letter to Indonesia's Ministry of Investment requesting a block on new PT PMA registrations under low-risk and medium-low-risk KBLI codes . By May 13, 2026, that block was live in the OSS system. If you apply for a new PT PMA with a Bali business address under one of the affected codes, the system rejects the application automatically. Virtual office addresses in Bali are also no longer accepted for new PT PMA registrations.
The reason is straightforward. Between 2021 and 2025, thousands of foreign-owned companies registered in Bali with little real business activity behind them. Many existed primarily to sponsor a residence permit. Others competed directly with local small businesses in sectors like consulting, retail, and villa rentals. Authorities investigated hundreds of these companies, and more than 400 received sanctions for licensing and compliance violations. Therefore, the province moved to close the loophole.
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Low and medium-low risk KBLI codes are blocked for new PT PMA in Bali
The OSS system automatically rejects new PT PMA applications with a Bali address under affected codes. Virtual office addresses in Bali are also no longer accepted for new registrations.
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Higher-risk KBLI codes remain open in Bali
Hospitality, food and beverage, wellness, and many tourism-related business classifications remain open for new PT PMA registration in Bali. The block is targeted, not total.
✓
Existing PT PMA companies keep their licenses
If you already hold a PT PMA in Bali, your Business Identification Number (NIB) and licenses remain valid. However, the compliance environment is stricter — companies with no real activity, no reported investment, or a virtual office address can expect closer scrutiny.
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The capital requirements apply nationally — not just in Bali
A PT PMA must plan an investment above IDR 10 billion per business classification and location, with at least IDR 2.5 billion in paid-up capital. This is a national rule. It follows you to any island you choose to invest in.
The real shift: Bali has become selective. And when one market becomes selective, experienced investors start looking at the map. The four islands covered in this series are where those conversations are heading right now.
The Four Islands Worth Watching
Beyond Bali: An Honest Look at Four Indonesian Investment Markets
Indonesia has more than 17,000 islands. Four keep coming up in conversations with our clients in 2026. Each has real potential — and each has real challenges. Here is an honest introduction to all four before we cover them in detail in the posts that follow.
Part 2 of this series
Lombok
The clear front-runner — infrastructure-backed and already moving fast.
One of Indonesia's five Super Priority Destinations, backed by billions in government infrastructure spending. The Mandalika Special Economic Zone, a functioning international airport, and the annual MotoGP race have transformed Lombok from "the island next to Bali" into a market of its own. Land still costs far less than comparable Bali locations, and the standard PT PMA framework applies without the KBLI block.
Part 3 of this series
Sumbawa
The frontier — high upside, thin infrastructure, long time horizon.
Three times the size of Bali, with world-class surf breaks and minimal development. Land is cheap and competition is minimal. However, infrastructure is limited and any business here requires a long-term commitment. Sumbawa suits early movers who can afford to wait — not operators who need revenue in year one.
Part 4 of this series
Sumba
Premium eco-tourism — the model proven by Nihi Sumba.
Sumba is not chasing visitor volume. Instead, it is building a reputation for low-density, high-value eco-tourism — a model already proven by internationally recognised ultra-luxury resorts. It suits investors with patience and a premium concept. Volume villa operations will not find the same economics here as in Bali.
Part 5 of this series
Mentawai Islands
The specialist play — world-class surf, high-spending repeat clients.
Some of the most consistent surf on the planet, a dedicated high-spending repeat clientele, and a local government beginning to formalise tourism rules. Everything arrives by boat. The market only works if your business is built around surf. For the right operator, that focus is the whole point — and the barrier to entry keeps the competition thin.
What connects all four: Each island has genuine opportunity. Each also has genuine challenges — land status, licensing complexity, logistics, and far thinner professional support services than Bali. The importance of structuring correctly from day one is, if anything, higher outside Bali than inside it.
What Investors Often Miss
The Bali Rules Are Not an Exception. They Are a Preview.
Here is the part many investors moving beyond Bali miss entirely. The compliance standards that caught people out in Bali — minimum investment values, real business addresses, honest LKPM (quarterly investment report) submissions — are national rules. The Bali KBLI block is not an exception to the Indonesian system. It is an enforcement of it.
In other words, the same approach that created problems in Bali — paper companies, virtual offices, mismatched KBLI codes, no real business activity — will create the same problems in Lombok, Sumbawa, Sumba, and Mentawai. The rules travel with you. Therefore, the advantage no longer goes to whoever registers first. It goes to whoever structures their company correctly from day one.
What a correct structure looks like: The right KBLI codes matched to your actual business activity. A real registered business address in the location where you operate. A credible investment plan above IDR 10 billion per code and location. Paid-up capital of at least IDR 2.5 billion. Accurate quarterly LKPM reporting. These are not onerous requirements for a genuine business — but they catch investors who were cutting corners.
What's Next in This Series
Coming Up: One Island at a Time
Over the coming weeks, we cover each island in detail. Each post addresses the same core questions: why investors are interested right now, who the island actually suits, the honest downsides, and what a compliant PT PMA setup looks like in practice.
02
Lombok
The infrastructure boom, the Mandalika effect, and what the numbers really say
03
Sumbawa
Early positioning on a frontier island — and the risks that come with it
04
Sumba
The premium eco-tourism model and why land here works differently
05
Mentawai
Building a surf business in one of the most remote markets in Indonesia
Frequently Asked Questions
Common Questions About Investing Beyond Bali
Is Bali closed to foreign investment in 2026?
No. Bali has blocked new PT PMA registrations under low-risk and medium-low-risk KBLI codes only. Higher-risk classifications — including hospitality, food and beverage, wellness, and many tourism activities — remain open for new PT PMA registration. In addition, existing PT PMA licenses remain valid.
Can foreigners set up a PT PMA in Lombok, Sumbawa, Sumba, or Mentawai?
Yes. The Bali KBLI block applies only to companies with a Bali business address. On other islands, the standard national PT PMA rules apply: a planned investment above IDR 10 billion per KBLI code and location, and at least IDR 2.5 billion in paid-up capital.
Which island is best for foreign investors after Bali?
It depends on your business model and timeline. Lombok offers the strongest infrastructure and the most active government backing. Sumbawa suits early land positioning with a long investment horizon. Sumba fits premium, low-density eco-tourism concepts. Mentawai works specifically for surf-focused operators. We cover each one in detail in this series.
Do the same compliance rules apply outside Bali?
Yes — and this is the point most investors miss. The minimum investment values, real business address requirements, and LKPM reporting obligations are national rules, not Bali-specific ones. The Bali block is an enforcement of those national standards. The same expectations apply on every island.
Can I use a virtual office address for my PT PMA outside Bali?
Virtual offices are no longer accepted for new PT PMA registrations in Bali, and the regulatory direction is toward stricter address verification nationally. As a result, we strongly recommend using a genuine registered business address that matches your actual operational location from the outset.
Smart Advisory Solutions · Our View
The Opportunity Beyond Bali Is Real — So Is the Need to Structure It Correctly
At SAS, we have worked with foreign investors in Bali for years — and in 2026, more of our client conversations are starting with the words "not Bali." That shift is real, and it reflects a genuine change in the investment landscape. The four islands covered in this series are not consolation prizes. Several of them represent opportunities that simply did not exist in a usable form five years ago.
However, the compliance lesson from Bali travels with every investor who moves to a new island. The companies that struggled in Bali — paper structures, mismatched KBLI codes, no real operational presence — will face the same problems in Lombok or Sumbawa. Indonesia is not creating a new frontier of looser rules. It is extending the same rules, with improving enforcement capacity, across more of its territory.
A short conversation before you commit to any location — to check which KBLI codes fit your business, what the capital requirements mean in practice, and how to structure correctly from day one — is always worth the time. A correction made later is more expensive in every sense than a structure built right from the start.
This article is for informational purposes only and does not constitute legal or investment advice. Laws and regulations are subject to change. Please consult a qualified Indonesian corporate law professional or contact the SAS team for guidance specific to your situation.
