🅿️ Running a company in Bali is a dream for many foreigners—but what happens when that dream starts to sink? 📉 Many business owners find themselves stuck when their company begins losing money and they’re unsure how to close it without facing legal trouble or employee backlash.
🅰️ Ignoring the proper steps can lead to unpaid staff salaries, labor lawsuits, BPJS claims, tax debt, or even personal liability 😰 Many foreigners try to quietly shut down without understanding Indonesia’s strict business closure laws—only to end up with bigger problems later.
🆂 The smart solution is to legally dissolve your company while honoring your obligations. This includes employee severance, tax clearance, and formal notifications to agencies like BKPM, Manpower, and Immigration. With expert help, it’s fully manageable ✅
🆃 “I was overwhelmed by all the paperwork and rules,” says Daniel, a foreign café owner in Ubud. “But working with a legal advisor helped me close the business properly and avoid staff conflict or legal risks.” 💬
🅴 For example, some PT PMA owners fail to formally notify the Manpower Office, leaving their company technically ‘alive’—which can trigger tax fines or BPJS claims months later ⚠️ Closing the right way means peace of mind.
🅰 Ready to exit cleanly and legally? ⚖️ Talk to a professional before making any move. We’ll guide you through each step of the closure process so you stay protected, compliant, and stress-free.
Table of Contents
- How to Legally Shut Down a Failing Company in Bali ⚖️
- What Happens If You Owe Employee Salaries or Severance? 💵
- Navigating BPJS, Taxes, and Labor Office Notifications 📄
- Why “Just Walking Away” Can Lead to Long-Term Penalties 🚫
- The Role of the Director and Legal Responsibility in Closure 🧑⚖️
- What Documents You Need to Properly Dissolve a PT PMA 📁
- Common Mistakes Foreigners Make When Closing Businesses 🛑
- FAQs About Company Closure, Employee Debt, and Legal Risk ❓
How to Legally Shut Down a Failing Company in Bali ⚖️
Closing a company in Bali as a foreigner requires more than just ceasing operations. You must formally notify the Ministry of Law and Human Rights, revoke your company’s NIB (Business ID), and submit final tax reports.
This is especially true for PT PMA entities, which are subject to strict foreign investment regulations. Failure to follow these legal procedures can result in continued liability—even after the business has stopped running.
What Happens If You Owe Employee Salaries or Severance? 💵
Employees are entitled to severance pay and salary settlements when a company closes. Under Indonesian labor law, unpaid wages can result in lawsuits, Manpower Office intervention, and even bans on your future visa or company registrations.
Always prepare a detailed severance plan and notify workers in writing before initiating closure. It’s not just ethical—it’s legally required.
Navigating BPJS, Taxes, and Labor Office Notifications 📄
You’ll need to close out all BPJS (health and employment insurance) accounts, finalize tax payments, and submit written closure notices to the Manpower Office.
BKPM (the Investment Coordinating Board) may also require a deactivation notice for your PT PMA.
Skipping these steps can leave your company ‘active’ on official records, risking penalties or future audits.
Why “Just Walking Away” Can Lead to Long-Term Penalties 🚫
Some foreign business owners think they can abandon their business and avoid consequences.
But if your company is still legally registered, you can be personally liable for employee debts, taxes, and immigration issues.
Even leaving the country won’t shield you if your name is tied to unresolved obligations in the Indonesian system.
The Role of the Director and Legal Responsibility in Closure 🧑⚖️
The company director holds legal responsibility during closure—even if the company is inactive.
This includes responsibility for tax filings, employee settlements, and immigration compliance.
If a director resigns before closure, a new director must be appointed to handle the process. Ignoring this could cause major bureaucratic problems down the line.
What Documents You Need to Properly Dissolve a PT PMA 📁
Key documents for PT PMA closure include: Articles of Dissolution, shareholder meeting minutes, clearance letters from the tax office, BPJS closure forms, and notifications to BKPM and Manpower.
It’s best to compile these with the help of a legal consultant or notary to avoid missing steps or submitting incomplete documents.
Common Mistakes Foreigners Make When Closing Businesses 🛑
The biggest mistakes include failing to notify authorities, not settling employee rights, and assuming the company will disappear on its own.
Others include keeping the bank account open or not updating immigration. These errors can result in legal action, denied KITAS renewals, or unwanted visits from the tax office—even years later.
FAQs About Company Closure, Employee Debt, and Legal Risk ❓
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Can I close a business without paying employee severance?
No. Severance must be paid under Indonesian law.
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What if I leave the country before officially closing my company?
You may still be liable. Your company remains active unless dissolved legally.
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Can unpaid BPJS or tax bills follow me later?
Yes. Outstanding obligations can block future business or visa applications.
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How long does the closure process take?
It can take 1–3 months, depending on your documents and legal steps.
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Do I need legal help to close my PT PMA?
Yes. The process is complex and should be handled professionally.
