A recent case in Bali, in which two Dutch nationals were blacklisted by Indonesian immigration and the activities of the club they organized came under review, has drawn attention among Bali’s foreign founder community. We are not going to add commentary to the case itself. What we want to do is share what we, as practitioners advising foreign-owned businesses in Indonesia every day, took away from what has been publicly reported. Because the technical points behind the story are ones many Bali founders should hear.
A lot of people running similar activities in Bali, whether running clubs, wellness meetups, coworking dinners, food events, or expat social groups, may have read the reporting and wondered, quietly, whether their own setup would stand up to close review. For many of them, the honest answer is: probably not. And the reason is instructive.
Community-building is not the problem
Building community around a shared activity, whether running, wellness, coworking, food, art, or anything else, is valuable to the people who take part. Nothing in this reflection is about discouraging that. Consilio itself is built on community, and many of our clients are people creating genuine gatherings in Bali with Indonesian members, hosts, staff, and partners at the centre of them.
What Indonesian law does say clearly is this: if an activity charges fees, controls admission, promotes publicly, or holds structured events, it is a business. Regardless of what the founders call it. And a foreigner-run business needs to sit on a structure that matches what the business actually does.
Reading the story as practitioners
Two technical points from public reporting stand out to us. Neither is unusual on its own. Both are fixable. But together they describe a pattern we see often in Bali.
A PT PMA existed, but the authorization to run the actual activity was not fully in place. In Indonesia, a PT PMA is not a general licence to do business. It is a company registered for specific activities, coded by KBLI (Klasifikasi Baku Lapangan Usaha Indonesia). Each KBLI is the authorization for a specific type of business, and every KBLI needs to be activated in OSS to be legally usable, and for many KBLIs, a Sertifikat Standar must be issued and held before the activity can operate.
This is where we see many PMAs run aground. The KBLI appears on the company’s registration documents. It looks covered. But when you check OSS, either the KBLI was never activated, or it was activated but the required Sertifikat Standar was never obtained. In both cases, the PMA is not actually authorized to do that activity. On paper, yes. In practice, no.
The point: having a PMA is not the same as being authorized to run your activity. The chain runs KBLI, then activation in OSS, then Sertifikat Standar where the risk tier requires it, then operating.
A residence permit is not the same as work authorization. Public reporting indicates that one of the individuals involved held an Investor KITAS (E28A). This is the second, and more common, mistake we see in Bali.
An Investor KITAS is a residence permit granted to foreign shareholders of a PT PMA above a certain share-value threshold. It gives the holder the right to reside in Indonesia as a passive investor. Someone whose relationship to the company is capital, not day-to-day work.
What it does not give the holder is the right to actively work in the company. Directing operations, organizing events, showing up as the operational face of the business: these are labour activities. Labour activities performed by foreigners in Indonesia require a Working KITAS (E23 or E25), which comes with its own chain of authorizations: an approved RPTKA (foreign worker utilisation plan), an IMTA (work permit), and a monthly DPKK contribution.
An Investor KITAS holder actively working in the company is doing unauthorized work. You either have work authorization for what you are actually doing, or you don’t.
The two gaps compound
Either error on its own is fixable. A PMA can activate additional KBLIs and pursue the required Sertifikat Standar. A shareholder can transition from Investor KITAS to Working KITAS through the proper RPTKA and IMTA process.
Together, they describe the same underlying miss: the actual activity, the corporate authorization, and the personal work authorization were not aligned. The founders had built what they thought a responsible foreign entrepreneur builds. Not what the specific activity required.
In our practice, this is one of the most common gaps we inherit from other agents when clients ask us to review their existing setup. The entity exists, the residence exists. But the two are not properly wired to what is actually being done.
What proper setup looks like for a foreigner-run community activity in Bali
If you are building a Bali running club, a wellness collective, a food event series, a coworking community, or any structured activity involving fees, admission, or public promotion, the framework is roughly this.
Start from the activity, not the entity. What is the actual thing you are doing? Organizing sports events. Running retreats. Hosting dinners. Wellness sessions. Language exchanges with a fee. Each of these maps to specific KBLI codes. The mapping happens before the entity is formed, because it decides the corporate structure downstream.
Activate the KBLI and obtain its Sertifikat Standar where required. A KBLI listed on the company’s registration is a starting point, not the finish line. It has to be activated in OSS. Where the risk tier requires a Sertifikat Standar, that has to be applied for and held. Only then is the activity actually authorized. Skipping this step is the most common reason we see PMAs operating without real authorization even though everything looks in order at first glance.
Get the right KITAS for the person doing the work. If you are actively operating, organizing, hosting, leading, then Working KITAS (E23) through the PMA, with RPTKA and IMTA in place. Investor KITAS is not the right instrument if you are the one running the business day to day. Most Bali founders are actively working in their own PMA, which means Working KITAS is the correct route.
Include Indonesian participation, because the structure requires it. Under Indonesian regulations, foreign workers do not exist on their own inside a PT PMA. Every Working KITAS is issued on the basis of an approved RPTKA, and the RPTKA requires Indonesian workers to be employed alongside the foreign one. Those Indonesian workers must be on the company’s formal payroll, registered with BPJS Kesehatan and BPJS Ketenagakerjaan, with their contributions paid every month. This is not optional. It is one of the foundations the KITAS itself rests on.
In practice this means that having Indonesian staff on payroll, with proper BPJS registration, is not a nice-to-have. It is part of what makes your KITAS valid. A PT PMA that operates without local staff on payroll, or without BPJS contributions being paid, is a PT PMA whose KITAS holders are exposed at the next review.
Beyond the KITAS requirement, Indonesian participation, whether as staff, members, or partners depending on the activity, is what makes a foreigner-run business in Bali sustainable in the long run. The regulation exists for a reason, and building the structure around it from day one is easier and cheaper than reverse-engineering it later.
What we take from the case
The specifics of any single case are always more complex than public reporting can capture. What we take from what has been shared publicly is not a story about individuals, but a reminder about structure.
A PT PMA on its own is not a shield. A KITAS on its own is not authorization to work. The right combination, KBLI activated properly, Sertifikat Standar in place where the risk tier requires it, matched to a KITAS that covers the actual work being done, with Indonesian staff properly on payroll and BPJS, is what makes a foreigner-run business in Bali both legal and durable.
If your current setup was built for one activity but you are actually doing another, or if you inherited a structure from another agent that you have never fully verified, this is a good moment to have someone check it. Quiet review beats loud discovery.