Bali to clamp down on illegal foreign owned businesses

JAKARTA - Bali Governor I Wayan Koster has formed a special task force to crack down on illegal foreign-owned businesses, following widespread permit violations by foreign investors that are believed to be harming the local economy.

According to Mr Koster, the team will consist of local stakeholders and tourism associations and will be tasked with thoroughly auditing tourism business permits in Bali.

“I will also issue a circular that will serve as a legal basis for the Bali Public Order Agency and the Bali Police to take action against businesses that violate their permits,” Mr Koster said on June 1, as reported by Antara.

He will also require all travel agencies, including those owned by foreigners, to join the local tourism association to ensure better management and oversight.

Mr Koster said the crackdown was essential to protect Bali from “economic, social and tourism setbacks”, arguing that illegal foreign businesses might exacerbate the wealth gap on the island and accelerate the deterioration of the local economy.

“There are numerous challenges facing tourism in Bali, such as traffic congestion, mounting waste issues, illegal villas and rowdy tourists.

“While we are committed to addressing these problems, the root causes must be tackled upstream through stronger regulations and stricter permit enforcement,” he said.

Mr Koster stated that in recent years, he has received numerous complaints about an increasing number of micro, small and medium-sized enterprises (MSMEs) in Bali being operated or controlled by foreign nationals.

According to existing regulations, foreign investment businesses must have a minimum capital of 10 billion rupiah (S$791,000) excluding the value of land and buildings, an amount that exceeds the capital of MSMEs. Any investment below that threshold is strictly reserved for domestic direct investment.

However, Mr Koster said many foreign investors have been exploiting loopholes in the government’s Online