Buying an Existing Business in Bali: What You Need to Know Before You Take the Plunge
Buying a business in Bali might look easy, but there’s more beneath the surface than most expect.
Read this quick answer if you’re short on time: Acquiring an established business in Bali involves a share transfer of a PT PMA, meaning you legally inherit the company's entire history - including all tax obligations, liabilities, and assets. At Bali Solve, we recommend proceeding only after exhaustive due diligence and with extreme caution. Outside of rare exceptions, such as acquiring an irreplaceable brand, the inherent complications often require a highly strategic approach.
Isn’t Buying an Existing Business Easier?
If you've spent any time in Bali, you might have seen some businesses for sale, or been approached by a fellow entrepreneur with an exciting business opportunity. On the surface, buying an existing operation feels like a smart move because it makes sense to skip the setup, inherit something that’s already working and get straight to it.
However, the reality is that it’s rarely that straightforward; there are plenty of things to be mindful of that might not be so obvious initially. So before you make a decision, read on to find out what you need to know about buying an existing business in Bali in 2026.
What Buying a Business in Bali Actually Means
As a foreigner, doing business in Indonesia requires a PT PMA (Perseroan Terbatas Penanaman Modal Asing), which is the foreign-owned limited liability company structure available to non-Indonesians.
When you buy a business in Bali, you’re not just purchasing operations, you are taking over the legal entity itself, with everything attached to it.
When you buy an existing business, you are not purchasing its assets directly (with some exceptions). In most cases you are purchasing the company itself, through a process called a share transfer (akuisisi saham). The existing shareholders sell their shares to you, and you step into their position as the new owner of that entity. The company's name, tax registration, licences and contracts all stay exactly as they were. This is the part that catches most people off guard, as effectively, you’re not just buying the good stuff.
What You’re Actually Taking Over
When shares transfer, everything inside the company comes with them. That includes what you want, such as the lease, the equipment, the brand and the staff contracts. However, there may also be hidden liabilities that you didn’t bank on when purchasing your business.
Outstanding Taxes
The most common hidden costs in Bali businesses are unpaid or incorrectly filed taxes. Indonesian companies are required to pay corporate income tax, withhold and remit taxes on employee salaries (PPh 21), and file returns on a monthly and annual basis. Additionally, businesses in the hospitality and tourism sectors are subject to a 10% local tax (often referred to as PB1). This is a regional requirement specific to Bali that must be collected and paid to the local government.
It is also vital to check if the company’s annual turnover has already surpassed the IDR 4.8 billion threshold. Once a business reaches this mark, it is legally required to register as a PKP (Taxable Entrepreneur) and becomes subject to VAT (PPN) at 11%. If the current owners have crossed this revenue line but failed to register or collect VAT, you could inherit significant tax liabilities and government penalties upon acquisition.
Acquiring a company means inheriting both its strengths and its risks, including assets, obligations, and any hidden liabilities.
In practice, many small businesses in Bali have some gaps or issues with their filings. These can include late filings, underreported income and employee taxes that were never properly handled.
As the new shareholder, these liabilities will now become yours. Unfortunately, the Indonesian tax authority does not care that you were not the owner when the problem occurred. Before any takeover, verifying that all tax obligations are current and correctly filed is one of the most important things you can do.
Business Loans
While PT PMAs typically face significant hurdles in accessing traditional Indonesian bank financing, many businesses carry debt in the form of private shareholder loans, outside investor funding, or related-party liabilities. It is critical to recognize that any such outstanding obligations are transferred to the new owner upon acquisition. It is essential you conduct a rigorous financial audit to ensure you are not inadvertently inherit hidden debts before finalizing the purchase.
Assets
This is where things can get somewhat messy in Bali. For a business to have real value in a share transfer, its assets need to be owned by the company, not by the individual who founded it. Lease agreements, equipment, vehicles and furniture should all be formally registered under the PT's name, with proper invoices and contracts to match.
In practice, many Bali businesses are set up informally. Founders might sign commercial leases or register a vehicle used by the company under a personal or family member’s name. Equipment might have been bought with cash without being recorded as a company asset. As such, when the shareholders change, some important assets might not automatically follow.
A more extreme example of this could be that the property lease is not in the PT’s name, resulting in a loss of access to the business premises as soon as the original owner walks out the door. Doing thorough due diligence which covers all these bases is a very important step in deciding whether a business is what it appears to be on the surface.
Starting Fresh
Starting a new PT PMA allows you to benefit from a lower corporate sales tax rate of 0.5% for the first three years, which can significantly reduce early costs.
One of the most compelling reasons to start a fresh PT PMA is the 0.5% turnover tax rate available for the first three years (for turnover under IDR 4.8 billion per year). This incentive provides a critical cushion for new businesses still scaling their revenue. When you buy an older company (3 years+), you lose this introductory period entirely. Instead of the 0.5% turnover rate, you step straight into the 11% tax on profits, paying standard rates from day one that a new business wouldn't otherwise face until its fourth year of operation.
If what you actually want is the specific location and you plan to rebrand completely, the smarter move is often to set up a new PT PMA, negotiate a fresh lease directly with the landlord or purchase an existing leasehold agreement and benefit from tax savings for three years. While you may lose the existing brand, the tax savings might be worth it.
Joining Someone Else's Business
Not every situation is a full takeover. Sometimes a friend has a café that needs investment or someone approaches you with a partnership opportunity. This is partial ownership, and it comes with its own rules.
Not all investments involve full ownership, many involve partnerships, which must follow proper legal structures to be valid.
To be legally recognised as a partial owner of an Indonesian business, your name needs to appear on the company's formal establishment documents, specifically SK Pengesahan (Decree of Approval). This happens through one of two routes - an existing shareholder transfers a portion of their shares to you, or the company issues new shares that you subscribe to. Either way, the process requires a notarial deed, approval from the Ministry of Law and Human Rights and updates to the company's official records.
Once you are on board, roles in the company need to be clearly defined. You’ll need to decide who the director is, who the commissioner is, and who has access to the company bank account. These are not just administrative titles as they determine what you can actually do within the business.
Relying on Trust Alone
It is surprisingly common in Bali for investment arrangements to be made informally on the basis of trust. Often, money is transferred to someone's personal bank account, people shake hands on a deal or something is written down privately. Ultimately, the understanding is that this money represents a stake in the business.
However, under Indonesian law, these kinds of arrangements give you almost no protection. If your money goes to a personal account rather than the company's bank account, and your name does not appear on the company's formal shareholder documents, you don’t have legally recognized ownership of that business. Private agreements between individuals are not reliably enforceable in Indonesian courts if they contradict the formal company records. If your partner disappears, changes their mind or disputes the arrangement, there is very little you can do about it.
Roles such as Director or Commissioner are not just titles, they define your authority and control within the company.
Any money you invest in a business should go directly into the PT's bank account, not to an individual personally. Make sure that your name is already on the company documents before moving any money.
When Buying Makes Sense
Despite the issues mentioned above, there are genuine situations where acquiring an existing PT PMA is the right call. The clearest case is when the business has real, transferable value that would be difficult to build from scratch. This could come from:
A strong brand with established reviews and a loyal customer base, and/or a registered trademark the market already recognises.
Staff who know the operation very well or have contracts properly tied to the company entity.
A commercial lease (or other significant assets) that are in the company's name that is well-structured and with meaningful time remaining.
If a business has all of those things, is clean from a tax and legal perspective and the price is fair, buying might be the best decision as you could walk in on day one with something already working. The key question to ask yourself is if the value is in the business, or just in the location. If it is the latter, starting fresh is potentially the smarter path.
Need Help?
If you’re considering buying a business in Bali, getting professional advice can help you avoid costly mistakes and make informed decisions.
Buying an existing business in Bali can work, but you should go in with your eyes open and do the groundwork properly. If you would like help thinking through whether to buy or would rather set up your own company, get in touch with the team at Bali Solve. You can reach us via WhatsApp or visit our office in Pererenan, near Canggu, we’d be happy to talk through your specific situation to see how we can help you best.
Frequently Asked Questions
Q: What is a share transfer in Indonesia?
A: A share transfer (akuisisi saham) is the process by which ownership of a company changes hands. The existing shareholders sell their shares to the buyer, who steps into their position as the new or additional owner of the entity. The company itself, including its licences, tax registration and contracts, continues unchanged.
Q: Do I inherit tax liabilities when I buy a business in Bali?
A: Yes. When you acquire shares in an Indonesian company, you take on everything inside that company, including any outstanding tax liabilities from before your ownership. This is why thorough due diligence on tax filings and payments is essential before any acquisition.
Q: Can a foreigner buy an existing business in Bali?
A: Yes, through the PT PMA structure. As a foreign investor, you can acquire shares in an existing PT PMA through a share transfer or capital raise, provided the business sector is open to foreign ownership under Indonesia's current investment regulations.
Q: What is the 0.5% tax rate for new companies in Indonesia?
A: New PT PMAs with annual turnover under IDR 4.8 billion qualify for a corporate sales tax of 0.5% on gross turnover for their first three years of operation. After that period, the company moves to the standard corporate income tax regime (11% from profit). Buying an existing company that is already more than three years old means this benefit is no longer available.
Be aware that local hospitality taxes (10%) and VAT (11%) may also apply based on your business type and revenue scale.
Q: Is it safe to transfer money to someone's personal account to invest in their Bali business?
A: No. Under Indonesian law, transferring money to a personal account in exchange for an informal stake in a business offers very little legal protection. If your name is not formally recorded on the company's shareholder documents, you have no legally recognised ownership. Any investment must go directly into the PT's bank account, and your name must be on the company documents before any funds are transferred.
Q: What should I check before buying a business in Bali?
A: The key things to verify are: all tax filings and payments are current, all assets (leases, equipment, vehicles) are registered under the company's name and not under an individual's name, there are no outstanding loans or liabilities, and all licences are valid and properly held by the PT. Professional due diligence support is strongly recommended before committing to any acquisition.
Written by Bali Solve Team
10th May 2026
