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Bali Governor Wayan Koster Limits OSS Access for Foreign Investors in Selected Business Classifications to Safeguard Local Small Businesses
24 Juli 2026 17:58 WITA
Denpasar – The Bali Provincial Government has officially restricted foreign-owned companies (Foreign Direct Investment / PMA) from obtaining business licenses in 18 Indonesian Standard Business Classification (KBLI) sectors by closing access through the Online Single Submission (OSS) licensing system.
Bali Governor Wayan Koster announced on Thursday that the decision follows an evaluation of business licenses issued to foreign investment companies operating in low-risk and lower-medium-risk business categories. The review found that many foreign-owned businesses had entered sectors traditionally reserved for local small businesses, reducing business opportunities for local entrepreneurs.
"The Provincial Licensing Evaluation Team found indications that some foreign investors were taking advantage of the risk-based licensing system to enter business sectors that are closely related to MSMEs (Micro, Small, and Medium Enterprises)," Governor Koster said.
According to the provincial government, some foreign investors have been using low-risk KBLI classifications, which only require a Business Identification Number (NIB), as a loophole to establish businesses without meeting significant capital investment requirements.
Under the OSS system, businesses categorized as low-risk or lower-medium-risk can be registered automatically without the need for additional permits or standard certifications. This regulatory gap has allowed some foreign-owned companies to enter sectors that were originally intended for local entrepreneurs.
As a result, a number of foreign-owned businesses have been established in sectors that directly compete with local MSMEs, with some even operating through virtual offices.
Governor Koster stated that this situation could create unfair business competition and place considerable pressure on the sustainability of local businesses, particularly MSMEs, in sectors that should instead encourage partnerships between foreign investors, cooperatives, and local enterprises.
After receiving approval from Indonesia's Minister of Investment and Downstream Industry / Head of the Investment Coordinating Board (BKPM), the Bali Provincial Government immediately blocked OSS licensing access for foreign investors in several low-risk and lower-medium-risk business sectors.
The restricted sectors include:
- Accommodation and lodging services
- Rental and leasing businesses
- Retail trade
- Consulting services
- Various other business activities that are closely associated with local MSMEs
