Do You Really Need Business Consulting for Your Bali-based Company?
Opening a business in Bali sounds like a dream, until you realize there’s a huge number of regulations, tax obligations and business limitations that you need to be aware of. Nobody pictures themselves filling in a mountain of paperwork instead of relaxing on the beach, but the truth is, setting your business up in the right way from the start is necessary if you want to avoid extra costs later.
So, how do you find out everything you need to do and know? The choice is yours - spend hours trawling through the internet, and still remain unsure if what you know is up to date, or do yourself a big favour and get a consultant.
Now, you may be thinking, ‘sounds like an extra expense,’ but plenty of things are worth much more than money, like saving time, energy and having peace of mind that your Bali business is doing everything above board. And perhaps in the long run, cutting costs now on an expert consultant may lead to surprises later. Surprises seem nice, but only if they are the kind where a friend surprises you with a gift, and not where you get a fine for non-compliance.
If you need any more convincing on why professional consulting is always the way to go, here are some things that an expert business consultant can do for you.
Help You Understand the Right Visa for You:
If you’re a foreigner in Bali, one of the most important aspects to understand when opening your business is how to deal with the visa system. Your visa will directly determine the type of work or business you can do, which is a connection that is often not considered enough by new business owners.
A business consultant can guide you with:
1. Choosing the right visa type for your business activities.
2. Explaining the pros and cons of different visa categories.
3. Ensuring you’re compliant with visa regulations to avoid legal issues.
4. Completing the application and renewal processes efficiently.
Advise You on Your PT PMA:
The most common type of business structure in Bali for foreigners is the PT PMA, (Perseroan Terbatas Penanaman Modal Asing), or foreign-owned limited liability company.
A PT PMA will:
1. Allow you to have 100% foreign ownership in some sectors, although there are restrictions for other fields, for example, construction, which may require partnering with a local person or corporation.
2. Give your business a legal entity status.
3. Enable you to conduct full business operations, including hiring employees and generating revenue.
4. Involve a more complex setup process compared to local companies.
Getting a business consultant to help with company set up is crucial. It will help you put your assets in the right place, understand your obligations as a PT PMA and prepare your business for the future.
Give Guidance on Viable Business Types in Bali
If you are new in Bali, you may wish to speak to someone with local knowledge of the Bali business landscape. In such a case, seeking the services of a business consultant can help you understand which types of businesses tend to do well in Bali.
To give you an idea, some of the most popular business types are:
1. Tourism and hospitality (hotels, villas, restaurants).
2. Wellness and spa businesses.
3. Services for digital nomads, like co working spaces.
4. Artisanal products.
5. Retail boutiques.
Speaking with a consultant can provide you with a better understanding of the legal requirements of opening up different kinds of businesses. They will be able to bring practical considerations to the fore and discuss potential challenges related to each field.
Set Up Your Property Business in the Right Way
Given the thriving property and tourism sector that Bali has, it’s no wonder that property businesses are exceptionally popular among foreign investors. Nevertheless, there are a number of things to look into when opening a property business, such as:
1. Ownership laws for foreigners (leasehold vs. freehold).
2. How to navigate Hak Pakai (right to use) and Hak Guna Bangunan (right to build) systems.
3. How to put your property investments under your PT PMA if you plan to rent them out .
4. Comprehending zoning laws and building regulations.
5. Understanding the potential of different areas of Bali, as well as the different renting models (e.g., long-term rentals, vacation rentals, property development).
By getting a consultant, you can minimize legal disputes and future issues that may arise from not understanding the complex legislation around property ownership.
Ensure Compliance
Compliance with local regulations can be a complicated but important part of running a business in Bali. Some of the areas you need to be aware of are:
1. Business licensing and permits.
2. Tax registration and compliance.
3. Employment laws and regulations.
4. Industry-specific regulations.
Making sure you know which regulations apply to your business will help you to avoid fines or operational disruptions.
Prepare for Tax and Accounting Obligations:
Knowing what kind of taxes your business will incur is important when starting your enterprise, as it may guide your business plans. Some areas consulting may help you with are:
Knowing which kinds of taxes apply to your business - for example, consulting businesses may not be subject to local taxation, whereas restaurants and short-term rentals are subject to 10% local tax.
Setting up a business that is tax efficient.
Learning more about your business’ accounting needs so you can avoid confusion and prepare for the future by keeping your books in good order from the beginning.
Following your annual and monthly reporting requirements.
Many new business owners struggle with their accounting and realize their reporting obligations when it's too late. Preparing ahead of time can help you to avoid fines and expensive accounting mistakes, as well as ensure that you don’t open a business only to find out later that it is subject to heavy taxation.
Understand BPJS:
In Indonesia, all employers need to register their employees for national health insurance (BPJS Kesehatan). Similarly, as the owner of a PT PMA, you will also be required to register for the service. Knowing who you need to register and how will mean that you are compliant with local regulations and covered in the case of an accident.
Arm You with Knowledge of Local Business Practices
Success in Bali isn't just about legal compliance—it's also about adapting to local business culture. A good business consultant can provide insights into:
1. How to work with local partners, employees and customers.
2. Maintaining relationships in the Balinese business community.
3. Local customs and etiquette that affect your business.
4. Dealing with cultural misunderstandings or conflicts.
Given the wonderfully unique culture here in Bali, you can expect some cultural differences. Community is very important in Bali, so knowing what to expect and how to communicate with people effectively can make all the difference to your success.
Manage Your Finances:
Managing your finances in Bali may look different from at home. Some things a consultant can advise you on are:
1. Setting up local bank accounts and understanding banking regulations.
2. Basic financial forecasting and budgeting considerations for the Bali market.
3. Understanding local tax obligations and optimizing tax strategies.
So, Do You Really Need a Business Consultant?
If you can handle all these things whilst setting up your business, perhaps you don’t, but most of us aren’t superhuman. If you’d like to avoid headaches and save both time and money, consider investing in expert advice. At Bali Solve, we have a team of professional consultants and visa agents who are well-versed in all aspects of setting up a business, and would be more than happy to help you get on the right path. If you’re interested, feel free to arrange a meeting with one of our experts via Whatsapp or at our Bali Solve office in Pererenan.
Written by Team Bali Solve