Can Foreigners Start a Sole Proprietorship in Bali, Indonesia?

🅿️ Many foreigners think opening a small guesthouse or café in Bali is as simple as renting a space and putting up a sign 😌 But when it comes to the sole proprietorship model (Usaha Dagang), the situation gets tricky—especially if you’re not an Indonesian citizen.

🅰️ Some expats get convinced by locals to put the business under their partner or friend’s name, thinking it’s just “how things are done here.” But this shortcut can lead to serious problems—like losing your business, getting reported to immigration, or even being deported 😓 Without legal ownership, you have no protection under Indonesian law.

🆂 The truth is: foreigners cannot legally operate a sole proprietorship (Usaha Dagang) in Indonesia. These businesses are strictly reserved for Indonesian citizens. If you want to run your own business in Bali, you need to go the proper route—like forming a PT PMA, which is a foreign-owned limited liability company.

🆃 “I thought I was safe,” says Marco, an Italian digital nomad who ran a juice bar in Ubud under his local girlfriend’s name. “But once we had a fight, she shut me out and reported me. I lost everything overnight.” Marco’s story isn’t unique—it’s a warning to every foreigner considering the easy way out.

🅴 A British yoga teacher wanted to open a retreat in Canggu and was advised to register it under her local driver’s name. Luckily, she sought a second opinion and ended up opening a legal PT PMA instead. Now, her business is thriving, and she doesn’t lose sleep worrying about immigration checks or local disputes.

🅰️ Thinking about starting a business in Bali? 🧾 Make sure you know what’s legal—and what’s not. This guide will walk you through why sole proprietorship is off-limits for foreigners, and how to set up your business the right way. Let’s get started 💼