Bali blocks foreign investment in 18 business categories

Bali has blocked foreign investors from accessing Indonesia's online licensing system for 18 business categories, citing concerns that foreign-owned companies are crowding out local businesses, including micro, small and medium enterprises MSMEs. Governor Wayan Koster stated that the decision followed an evaluation of licenses issued to foreign-investment companies in low- and medium-low-risk business categories. The provincial licensing evaluation team is investigating possible misuse of risk-based licensing rules by investors entering sectors closely linked to MSMEs. Some foreign investors are exploiting low-risk business categories, which require only a Business Identification Number, as a loophole to avoid significant capital investment requirements. These categories are vulnerable to regulatory loopholes because registrations are automatically issued without standard certificates or other permits. Some foreign-investment companies have entered the market through businesses that threaten MSMEs, including operations using virtual offices, which may result in unfair competition and put significant pressure on local businesses. After obtaining approval from the investment minister, Bali revoked access to the online licensing system for several low- and medium-low-risk business sectors. The restricted sectors include accommodation, rentals, retail, consulting, and other activities closely linked to the MSME business environment. Specific categories include star-rated and budg