Setting up a PT PMA (Foreign Owned Company) in Bali, Indonesia, is an exciting venture that requires a deep understanding of the island’s unique land, zone, and area management.
Based on data from the Investment Coordinating Board (BKPM) in 2022, Foreign Direct Investment (PT PMA) in Bali reached IDR 8.7 trillion, with 12,975 projects.
However, many are unaware of the types of businesses that are permitted in specific areas. Each region in Bali is divided into zones regulated by the local government.
For example, villas and guesthouses can be built in orange and yellow zones, designated for tourism activities.
If a green zone is used for commercial activities or shops, it violates Bali’s spatial planning and environmental regulations.
This can result in fines, business closures, or even demolition of buildings.
This blog post will delve into the critical aspects of land zoning in Bali, shedding light on why certain zones may be more advantageous for particular business endeavors.
What is Land Zone in Bali
Land zoning in Bali, as per the regional regulation, involves the spatial arrangement of the province to optimize land use in a sustainable manner, ensuring the preservation of cultural and natural resources.
Every district in Bali has its own land zone, it differs by the color.
This process organizes the land into specific zones, such as protected areas and development areas, to balance economic growth with environmental conservation.
Different Types of Zones
Here are the different types of zones in Bali based on they color area, this color plate we got from OSS website https://oss.go.id/
- Yellow Zone ( Residential Zone)
Based on the picture by the topographic from OSS, we can see the yellow zone or “zona kuning” is designated for residential land use, specifically for housing and residential development, but you can also make shops, warung, guesthouses, and many other activities.
For PT PMA you can set up private and non private housing here.
This zone includes a variety of housing types from single-family homes to multi-unit apartment complexes, often surrounded by local parks, small businesses like cafes and convenience stores, and community centers.
- Orange Zone (Commercial & Residential Land)
The Orange Zone or “Zona Orange” is earmarked for Mixed Zone, catering to both domestic and international visitors. This area includes a mix of hotels, resorts, cultural attractions, and entertainment facilities like theaters and museums.
Cafe, restaurant, spa, sport center, Bar and consulting services business, aiming to provide a diverse tourism experience. But star hotels, malls, and beach clubs are not permitted to set up in these zones.
- Green Zone (Agricultural Land)
Dedicated to agricultural activities, the Green Zone or “Zona Hijau” supports both traditional farming and modern agritourism ventures.
This zone features expansive fields growing a variety of crops, orchards, vineyards, and sustainable farming operations.
Agrotourism is encouraged, with farms offering tours, farm-to-table dining experiences, and overnight stays. Conservation of natural habitats is a priority here, with efforts to preserve local flora and fauna and maintain biodiversity.
- Pink Zone (Tourism and Commercial Land)
Based on the picture by the topographic from OSS, we can see The Pink Zone or “Zona Pink” is designated for tourism and commercial use, you can develop cafes, restaurants, villas, hotels, guesthouses, malls, shops, and many more businesses for tourism purposes in this zone.
Beach clubs and sport clubs are also permitted in this zone.
- Purple Zone ( Government Land)
The Purple Zone or “Zona Ungu” is allocated for government and educational institutions. It houses government buildings, from local city halls to federal agencies, providing various public services.
Educational facilities range from primary schools to universities, often including research institutes and libraries.
This zone also features public squares, monuments, and parks that celebrate local history and culture. Infrastructure is designed to be robust, with a focus on accessibility and public transportation.
What is The Impact of Zoning on Business
Zoning impacts businesses by determining where certain types of business activities can take place, influencing real estate values, and ensuring that business operations do not conflict with local planning objectives.
This regulatory framework is crucial for foreign investors to understand to ensure their business activities are aligned with zoning laws.
Before making the decisions to buy a land, develop a building, or rent a place, it’s important to know what kind of business you can do in that area, so when you apply for a license for your business, you will be permitted by Bali’s government.
Legal Requirements for foreign investors in Bali
Foreign investors need to comply with land zoning regulations which are part of broader legal requirements that include obtaining proper permits and adhering to environmental and building regulations.
There are a lot of requirements for foreigners to set up a company in Bali. Our agency offers a service for setting up PT PMA in Bali, just contact us by WhatsApp, we can help you.
These laws ensure that their investment contributes positively to the local economy and environment.
How to choose an Office Address for PT PMA
Choosing a location within the zoning framework involves understanding the designated uses of different zones, the local regulatory environment, and the strategic importance of locations in terms of connectivity, accessibility to markets, and the local community’s characteristics.
Investors should align their business needs with the zoning restrictions to select the most appropriate office address, whether you want to set up a Virtual Office or Real estate in Bali, your office address should have IMB / PBG or building certificates from the Indonesian government.
Be careful some agents which offer service to set up Virtual Office PT PMA don’t have this certificate with them and it will make it difficult for you in the future to get a license for your business. So, it’s important to choose the right agent.
In other cases, for example your office is registered in a residential area and it has IMB certificated, even if it has IMB certificated and registered in OSS you can not have a license for your business because it’s registered as a private area not public or commercial area.
If you need help to choose an office address for your business in Bali, we can assist you, just contact us by WhatsApp.
Frequently Asked Questions
- What are the key considerations when selecting a land zone in Bali for a PT PMA?
Key considerations include understanding the specific characteristics and advantages of each zone, the nature of your business, the zone's regulatory environment, and its accessibility. It's essential to choose a zone that aligns with your business activities and strategic objectives while adhering to local zoning laws.
- How does the zoning in Bali affect the type of business activities that can be conducted?
Zoning in Bali determines where specific types of business activities can be legally conducted. For instance, tourism-related businesses thrive in the Orange Zone, while agricultural ventures are best suited for the Green Zone. Compliance with these zones ensures that business operations align with local planning objectives.
- What are the benefits of setting up a business in the Orange Zone for a tourism-related PT PMA?
The Orange Zone is ideal for tourism-related businesses due to its focus on accommodating domestic and international tourists with facilities like hotels, resorts, cultural attractions, and entertainment venues. This zone is designed to support high traffic and provides diverse opportunities for business growth in the tourism sector.
- What types of business infrastructures are most developed in the Yellow Zone?
The Yellow Zone is well-developed for residential purposes, featuring a mix of housing options, community centers, and local businesses that cater to the daily needs of residents. This zone is ideal for businesses that serve the local community, such as retail stores, personal services, and small-scale commercial ventures.
- How can a PT PMA in the tourism sector benefit from the strategic location choices in Bali’s zoning plan?
Strategic location choices in the zoning plan can maximize foot traffic, accessibility to tourist attractions, and synergy with other tourism-related businesses. Selecting the right zone, like the Orange Zone, enhances the visibility and accessibility of tourism businesses, directly impacting their success and growth.
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