DENPASAR - The Bali Provincial Government (Pemprov) has closed access to the integrated licensing system (OSS) on 18 Indonesian Business Field Classification (KBLI) for foreign investment (FDI).
The Governor of Bali Wayan Koster explained that this was done based on the results of the evaluation of business permits for PMA business activities in the low-risk and low-medium risk categories of the KBLI which eventually took up the business spaces of local communities.
"The Bali Provincial Government's licensing evaluation team is trying to find indications of misuse of the risk-based licensing system by investors to enter business sectors closely related to MSMEs (micro, small, and medium enterprises)," he said as reported by ANTARA, Thursday, July 23.
A number of foreign investors take advantage of the low-risk KBLI category which only requires a Business Registration Number (NIB) as a loophole to carry out business activities without the obligation of significant capital investment.
KBLI in the low and medium low risk categories are utilized through regulatory gaps in the OSS system, because the registration process for these categories can be issued automatically and does not require standard certificates or permits.
Finally, a number of PMA entered to establish businesses that threaten MSMEs, including by using virtual offices.
"This condition has the potential to create unhealthy business competition and provide significant pressure on the sustainability of local business actors, especially MSMEs, in sectors that should encourage partnerships with cooperatives and MSMEs," said Governor Koster.
After obtaining approval from the Minister of Investment and Industrialization/Head of the Investment Coordinating Board (BKPM), the Bali Provincial Government immediately closed access to the OSS system for a number of low-risk and medium-low risk business categories.
The restricted business areas include the accommodation, rental, retail trade, consulting services, and other sectors that are very close to the SME business space.
A total of 18 KBLI are code 55110 Star Hotels (building area < 6,000 m²), 68111 Real Estate owned or leased, 55120 Melati Hotel (building area < 6,000 m²), 70209 Other Management Consulting Activities, 77100 Car, Bus, Truck, and Similar Rentals, 47711 Retail Trade in Clothing, and code 47511 Retail Trade in Textiles.
Then code 77311 Motor Rental Without Option Rights, 47249 Retail Trade of Other Food, code 47991 Retail Trade of Food Commodities from Agricultural Products, 55900 Other Accommodation Providers, 56303 Drinking House / Cafe, 56305 House / Traditional Medicine Shop, 14120 Tailoring and Making Clothes to Order.
Furthermore, code 93111 Stadium Facilities, 93116 Fitness Center Facilities/Fitness Center, 93191 Sports Event Promoter, and 70204 Industrial Management Consulting Activities.
"The closure of OSS access itself has been in effect throughout the territory of the Province of Bali starting from the third week of May 2026," he said.
With this closure, PMA can no longer apply for new business licenses through the OSS system for the intended business areas until there is further policy in accordance with applicable laws and regulations.
The company still has the obligation to submit the Capital Investment Activity Report (LKPM) to the KBLI related to being deactivated or deleted from the licensing system.
Koster ensured that he and the mayor/bupati would act decisively against various forms of licensing violations. However, for quality investments, responsible, and provide real benefits for the local economy, the Bali Provincial Government is very open.
"The incoming investment is expected to be in line with Bali's development vision, respect for local wisdom, and support for strengthening the people's economy based on MSMEs," said Koster.
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