Can Digital Nomads in Bali Open a PT or CV? What’s Actually Legal in 2026

Bali has become the world’s favorite home base for digital nomads. The island offers everything remote workers tend to look for: warm weather, stable Wi-Fi, low living costs, and a genuinely thriving global community. After a few months of enjoying the island, though, many digital nomads start asking the same question: can a company legally be opened in Indonesia?

The short answer is that a company can be opened by foreigners in Indonesia, but not in the form of a regular PT or CV. Strict rules, specific structures, and compliance steps must be followed instead. In this guide, how foreigners can actually start a business in Indonesia is explained clearly, along with the real difference between PT, CV, and PT PMA, and what needs to be prepared before a digital nomad in Bali sets up their own company.

PT vs CV vs PT PMA: What Foreigners Need to Know

Why a CV Is Never an Option for Foreigners

A CV or Commanditaire Vennootschap, is a local partnership structure, and it is one that foreigners simply cannot open or own, even on a partial basis. CV ownership is restricted entirely to Indonesian citizens, and no legal workaround exists that allows a foreigner to hold even a minority stake in this structure directly. This restriction is often misunderstood by newcomers, who assume that some partial or silent ownership arrangement might be tolerated if structured carefully enough.

In reality, this assumption is exactly where many foreigners run into trouble, since no such flexibility is written into Indonesian law regardless of how the arrangement is documented. Understanding this limitation clearly, before any informal agreement is even considered, is the first step toward avoiding a serious legal misstep.

Why a Regular PT Is Off the Table Too

A regular PT, or Perseroan Terbatas, is also not available for foreign ownership, and this surprises many nomads who assume a standard limited liability company would be the obvious starting point. Foreigners cannot be shareholders, directors, or commissioners of a local PT, since this structure is strictly reserved for Indonesian nationals. This means that even setting up a company with a majority Indonesian ownership and a foreigner holding a supporting role is not a legitimate path if the intention is genuine foreign control or benefit.

Some newcomers are advised informally that a local PT can simply be “set up together” with an Indonesian friend or partner, but this advice tends to sidestep the underlying legal restriction rather than resolve it. Recognizing that a local PT is entirely off the table for foreign ownership is essential before any incorporation conversation moves further.

PT PMA: The Only Legal Path for Foreign Ownership

A PT PMA, or Penanaman Modal Asing, is the only structure through which foreigners can legally be shareholders in an Indonesian company, and it exists specifically to accommodate foreign individuals or foreign companies as owners. For digital nomads, entrepreneurs, or freelancers who genuinely want to run a business inside Indonesia, a PT PMA is the correct and only fully compliant option available.

This structure is treated by the government as a foreign investment vehicle, which means it carries its own specific registration process, capital requirements, and reporting obligations distinct from a local PT. Because it is purpose-built for foreign ownership, a PT PMA also allows the structure to support things a local entity cannot, such as sponsoring a foreign director’s own work and stay permit.

Also Read: PT PMA Tax Obligations in Indonesia: Guide to Income Tax, VAT, and Withholding

Why Using a Local Friend’s Company Is a Serious Risk

How Nominee Arrangements Actually Work (and Why They Fail)

A common misconception among newcomers in Bali is the belief that a local friend’s PT or CV can simply be operated under, effectively borrowing their legal identity to run a business informally. This kind of nominee arrangement is illegal under Indonesian law, and it creates serious immigration risk for the foreigner involved, regardless of how the arrangement is privately structured or how much trust exists between the parties. Because the foreigner does not legally own the company in this scenario, asset loss becomes a genuine possibility if the relationship with the nominee sours or if the nominee simply chooses to walk away.

Tax violations can also be triggered under these arrangements, since income and reporting obligations become murky when the legal owner on paper is not the person actually running the business. What might feel like a convenient shortcut in the early months of building a business in Bali tends to become a serious legal liability the moment anything goes wrong.

What Enforcement Looks Like Today

Enforcement around unregistered and informally operated businesses in Indonesia has tightened considerably in recent years, and this trend shows no sign of reversing. If an unregistered business is run, payments are accepted locally, or services are promoted without the correct permit, fines or even deportation can result for the foreigner involved.

Immigration and business licensing systems have become more integrated, making it increasingly difficult for an unregistered or informally operated business to remain unnoticed indefinitely. This is particularly relevant for digital nomads who have built a genuine local client base or a recognizable local brand presence, since visibility itself increases the likelihood of being flagged.

Also Read: How U.S. Accountants Can Safely Outsource Bookkeeping: A Practical, IRS-Compliant Guide

What a Digital Nomad Can Legally Do Without a Company

Tourist, Visit, and Social Visas

A Tourist Visa or Visa on Arrival does not allow working locally or conducting business of any kind, and this remains true even if the work being done is entirely remote and serves clients outside Indonesia. A Social or Visit Visa carries the same restriction, meaning commercial activity is still not permitted regardless of how casual or low-key that activity might feel. These visa categories are designed purely for tourism, family visits, or short-term social purposes, not for any form of income-generating activity conducted while physically present in the country.

Many digital nomads mistakenly assume that because their income comes from abroad, local visa restrictions on “working” don’t apply to them, but Indonesian immigration authorities have not historically drawn that distinction so generously. Understanding these visa limitations clearly is what prevents an otherwise well-meaning digital nomad from unintentionally violating their visa terms.

The Remote Worker/Digital Nomad Visa

A Remote Worker or Digital Nomad Visa allows work to be performed for foreign clients while based in Indonesia, but it does not permit a business to actually be run inside Indonesia itself. This distinction matters considerably: working remotely for an overseas employer or client is different, in the eyes of Indonesian law, from selling services locally, hiring staff, collecting payments from Indonesian customers, or signing local clients.

If any of these local activities are intended, whether hiring staff, leasing office space, or signing Indonesian clients, a PT PMA paired with the correct work permit, typically an Investor or Work KITAS, becomes necessary. Many nomads use this visa category successfully for years without ever needing a local entity, simply because their business model never touches Indonesian soil in a commercial sense.

What’s Required to Open a PT PMA in 2026

Capital Requirements After the 2025 Reform

A significant regulatory change took effect in October 2025 that foreign founders should be aware of: the minimum paid-up capital for a PT PMA was reduced from IDR 10 billion to IDR 2.5 billion under BKPM Regulation No. 5 of 2025, a reduction of 75 percent.

This figure, the paid-up capital, must be committed at incorporation, though it does not need to be fully deposited immediately, since a capital declaration letter is generally accepted at registration with the actual deposit made once the corporate bank account is opened.

A separate figure, the total investment plan, still needs to exceed IDR 10 billion per KBLI business activity code and per project location, excluding land and building costs, and this represents the company’s broader investment commitment over time rather than an immediate cash requirement. It is worth noting that this reduced paid-up capital threshold does not automatically qualify a founder for an Investor KITAS, since that specific visa category still generally requires an individual shareholder’s stake to reach IDR 10 billion in value.

Shareholders, Directors, and Licensing

Beyond capital, a PT PMA requires at least two shareholders, who may be foreign individuals or foreign companies, along with at least one director and one commissioner, both of whom can be foreigners under this structure. A registered business address is required, and business licensing is processed through Indonesia’s OSS-RBA system, which typically takes several weeks to complete once all documentation is in order.

Tax registration, covering both an NPWP and an NIB, needs to be completed as part of this process, alongside selecting the appropriate business classification, known as a KBLI code, that accurately reflects the company’s intended activities. Some industries allow full foreign ownership, while others require partial Indonesian ownership under Indonesia’s Negative Investment List, now more commonly referenced through the Positive Investment List framework, so this should be confirmed early for the specific business activity being planned. Preparing all of these elements methodically tends to result in a considerably smoother incorporation experience.

Should You Actually Open a PT PMA?

When a PT PMA Makes Sense

A PT PMA is ideal for digital nomads who have transitioned from being a solo freelancer to genuinely building a business with local roots and ambitions. It makes sense when Indonesian clients are being signed directly, when a legal stay permit through an Investor KITAS is needed, or when long-term operations in Indonesia are genuinely being planned rather than a short, exploratory stay.

It also makes sense when global invoicing through a local entity is wanted, when Indonesian or foreign staff need to be hired, or when tax clarity and long-term legal security have become genuine priorities rather than afterthoughts. For consulting practices, creative agencies, coaching businesses, SaaS products with local ambitions, or hospitality ventures, a PT PMA tends to be the natural and expected next step once the business reaches a certain scale.

When It Might Be Overkill

A PT PMA may be unnecessary if only foreign clients are being served, if the stay in Indonesia is genuinely short-term, or if no legal entity inside Indonesia is actually needed to operate the business as it currently exists. In these cases, maintaining a foreign company structure, such as a US LLC or a Singapore company, is often considerably simpler and avoids the ongoing compliance obligations that come with an Indonesian entity. Many successful remote businesses are run for years entirely through a foreign entity, with Indonesia serving purely as a lifestyle base rather than a place of legal business operation.

It is worth periodically reassessing this decision as the business grows, since a structure that made sense in year one may no longer fit once local clients, local staff, or long-term plans enter the picture. Being honest about actual business activity, rather than setting up a PT PMA purely because it feels like the “proper” thing to do, tends to lead to a more appropriate decision either way.

Tax Obligations Once You’re a PT PMA

Corporate Tax, VAT, and Withholding

A PT PMA is taxed like any other Indonesian company once established, meaning a flat 22 percent corporate tax rate applies to taxable profits regardless of whether the shareholders are foreign or domestic. VAT, currently applied at an effective rate around 11 percent, may also become relevant depending on revenue once the company is registered as a VATable entrepreneur. Withholding tax obligations apply for certain categories of payment as well, whether to employees, local vendors, or overseas parties, and each of these carries its own specific rate and filing requirement.

For nomads accustomed to very light or informal tax administration in their previous setup, this structured system can feel like a meaningful shift, though it brings genuine long-term stability and legal certainty in return. Understanding these obligations before incorporation, rather than being surprised by them afterward, allows realistic financial planning from day one.

Monthly and Annual Reporting Rhythm

Reporting obligations for a PT PMA run on both a monthly and an annual basis, covering tax filings, VAT returns where applicable, and a separate quarterly investment activity report known as LKPM, filed through the OSS system regardless of the tax office’s own schedule.

Even a company with minimal or no income during a given period is generally still expected to file, since many of these obligations are tied to the company’s existence rather than its profitability. This rhythm can feel unfamiliar at first, particularly for nomads used to a single annual tax filing back home, but it becomes considerably more manageable once proper bookkeeping systems are put in place from the start.

Missing these filings, even unintentionally, tends to create compounding administrative issues that are far more time-consuming to resolve than they would have been to prevent. Building this reporting rhythm into the business from its very first month is one of the most valuable habits a new PT PMA owner can develop early.

Conclusion

Yes, a business can be started by digital nomads in Indonesia, but only through a PT PMA. A regular PT or CV simply cannot be opened by foreigners, while a PT PMA can be legally owned and operated, since it is the government-approved structure specifically designed for foreign entrepreneurs.

If a serious business is being built in Bali, whether a consulting practice, a creative agency, a coaching business, a SaaS product, or a hospitality venture, a PT PMA remains the safest and most compliant way to operate.

Understanding the structure, the compliance obligations, and the long-term commitments involved before getting started is what matters most, and our team at IndoLedger is glad to help walk through exactly what that looks like for your specific situation.