Foreign and domestic investors continue to find Bali attractive for company formation, with 19,262 PT PMA business actors registering between 2021–2025. This accounts for approximately 40% of all national PT PMA Business Registration Numbers (NIB) issued. However, the province is implementing stricter regulations, particularly for PT PMA entities perceived as ‘paper companies’.
Bali Location Permit Guide: How to Get PBG and Environmental Approval for Your New Company
Opening a company in Bali, especially a PT PMA, involves navigating specific local regulations concerning location permits, building approvals (PBG), and environmental impact assessments. While Bali remains a significant hub for foreign investment, recent regulatory tightening aims to ensure genuine economic activity and compliance with spatial planning and environmental standards. This guide details the necessary steps and considerations for securing the required permits for your new company in Bali.
2027 Note on Bali Regulations
By 2027, Bali is expected to have fully implemented its revised spatial planning regulations (Rencana Tata Ruang Wilayah – RTRW) and enhanced enforcement mechanisms for environmental compliance. This will specifically impact the permissible business activities in certain zones and the requirements for obtaining Building Approval (PBG) and environmental permits, potentially making approvals more stringent for projects in sensitive areas or those with significant environmental footprints.
1. Understanding the Regulatory Landscape in Bali
Bali accounts for a very large share of Indonesia’s foreign-investment companies and is seeing regulatory moves that will reshape how and where new entities can be set up. Between 2021–2025, Bali registered 19,262 PT PMA business actors, accounting for ~40% of all PMA Business Registration Numbers (NIB) issued nationally. These Bali-based PT PMA entities generated 55,458 registered projects over that period. This makes Bali one of Indonesia’s densest provinces in terms of foreign-investment corporate presence, especially relative to its population and land area.
Foreign investment realization in Bali recorded IDR 25.60 trillion of realized foreign investment (PMA) in 2025, across hospitality, wellness, digital services, F&B and other sectors. At an exchange rate in the IDR 15,000–16,000 per USD range, this corresponds roughly to USD 1.6–1.7 billion in realized PMA inflows in Bali for 2025. This significant investment activity necessitates robust regulatory frameworks to manage development and ensure sustainability.
2. Key Permits Required: PBG and Environmental Approval
For any physical business presence in Bali, two primary permits are crucial:
- Persetujuan Bangunan Gedung (PBG) – Building Approval: This permit, replacing the Izin Mendirikan Bangunan (IMB), is required for constructing, renovating, or significantly altering any building. It verifies that your building plans comply with local spatial planning regulations (RTRW) and building codes.
- Environmental Approval (Persetujuan Lingkungan): Depending on the scale and nature of your business activities, you will require an environmental permit. This can range from a Statement of Environmental Management and Monitoring Capability (Surat Pernyataan Kesanggupan Pengelolaan dan Pemantauan Lingkungan Hidup – SPPL) for low-impact activities, to an Environmental Management Effort (Upaya Pengelolaan Lingkungan Hidup – UKL) and Environmental Monitoring Effort (Upaya Pemantauan Lingkungan Hidup – UPL) for medium-impact activities, or a full Environmental Impact Analysis (Analisis Mengenai Dampak Lingkungan – AMDAL) for high-impact projects.
3. The Process for Obtaining PBG
3.1 Spatial Planning Conformance (KKPR)
Before applying for a PBG, you must obtain a Konfirmasi Kesesuaian Kegiatan Pemanfaatan Ruang (KKPR) – Spatial Planning Conformance. This document confirms that your proposed building and its intended use align with the local spatial plan. The application is typically submitted through the Online Single Submission (OSS) system.
3.2 Technical Plan Submission
Once KKPR is secured, you will submit detailed technical plans for your building project. These plans must be prepared by a certified architect or civil engineer and include:
- Architectural drawings (floor plans, elevations, sections)
- Structural calculations and drawings
- Mechanical, electrical, and plumbing (MEP) plans
- Fire safety plans
- Geotechnical investigation reports (if applicable)
The technical plans are reviewed by the local government’s technical team to ensure compliance with building codes and safety standards.
3.3 PBG Issuance
Upon approval of the technical plans, the PBG is issued. This permit authorises the construction or renovation work. It is crucial to display the PBG prominently at the construction site.
4. Environmental Approval Process
The type of environmental approval required depends on your business’s potential environmental impact. Indonesia has shifted from a Negative Investment List to a Positive Investment List (Presidential Regulation No. 10/2021), opening 246 priority business fields to foreign capital, including hospitals, commercial digital platforms, and logistics. However, environmental regulations remain stringent.
4.1 SPPL (Low Impact)
For businesses with minimal environmental impact, such as small offices or retail outlets, an SPPL is sufficient. This is a self-declaration stating your commitment to managing and monitoring environmental aspects. It is usually processed via the OSS system.
4.2 UKL-UPL (Medium Impact)
Businesses with medium environmental impact, such as restaurants, hotels, or small manufacturing facilities, require UKL-UPL. This document details the potential environmental impacts of your activities and the proposed management and monitoring efforts. The UKL-UPL report is submitted to the local environmental agency for review and approval.
4.3 AMDAL (High Impact)
Large-scale projects with significant potential environmental impact, such as major resorts, industrial facilities, or large infrastructure projects, require an AMDAL. This involves a comprehensive study assessing potential impacts and proposing mitigation measures. The AMDAL process is extensive, involving public consultation and review by an expert commission. Key growth sectors nationally include health and wellness (CAGR 10–15%), experiential travel (CAGR ~12%), and premium/luxury goods, many of which may require UKL-UPL or AMDAL.
Here is a simplified overview of the environmental permit types:
| Impact Level | Permit Type | Description |
|---|---|---|
| Low | SPPL | Self-declaration of environmental commitment. |
| Medium | UKL-UPL | Detailed plan for environmental management and monitoring. |
| High | AMDAL | Comprehensive environmental impact assessment and mitigation. |
5. Post-Permit Obligations
Obtaining PBG and environmental approval is not the final step. Businesses must comply with the conditions stipulated in their permits. For PBG, this includes adhering to approved plans during construction and obtaining a Certificate of Worthiness (Sertifikat Laik Fungsi – SLF) upon completion. For environmental permits, regular monitoring and reporting of environmental performance are mandatory.
6. Penalties for Non-Compliance
Bali is tightening rules, especially for PT PMA “paper companies,” and non-compliance with location, building, and environmental permits can lead to significant penalties. These may include:
- Fines
- Suspension or revocation of business permits
- Orders to cease operations
- Demolition of non-compliant structures
- Legal prosecution
The regulatory environment in Bali is becoming more stringent to ensure sustainable development and genuine economic contributions from foreign investments.
7. How Open Company In Bali Can Assist
Navigating the complexities of obtaining PBG and environmental approvals in Bali requires local expertise and an understanding of the evolving regulatory landscape. Open Company In Bali specialises in assisting foreign investors with company registration and permit acquisition. Our team provides guidance through each step, ensuring compliance with all local regulations and facilitating a smooth process for your business setup.
For assistance with obtaining PBG, environmental approvals, and other corporate services for your PT PMA in Bali, request a free company-setup assessment on WhatsApp.