Jakarta, Indonesia Sentinel — Bali Governor Wayan Koster has raised concerns over a surge in foreign investment that he says is encroaching on businesses traditionally run by local residents.
“There are sectors meant for local livelihoods, such as motorbike rentals and small lodging services, that are now being taken over by foreigners. It is not acceptable, for example, for motorbike rental businesses to be owned by foreign nationals,” Koster said in a statement released on Saturday (November 15).
Koster said Bali is currently in a situation that requires strict oversight of incoming investment. He noted that many business permits submitted through Indonesia’s Online Single Submission (OSS) system do not reflect the actual conditions on the ground.
Beyond taking over local businesses, he added, some foreign investors have also manipulated capacity data for tourism operations, such as the number of seats in restaurants, on their permit applications.
“The license may state a certain capacity, but the real situation far exceeds that. We’ve conducted evaluations, issued new regulations, and now enforcement must be carried out properly,” he said.
To address these issues, Koster outlined three main proposals for regulating investment in Bali: ensuring that foreign investments entering the island exceed Rp10 billion (about $620,000), protecting small and medium enterprises (SMEs) from being overtaken by large investors, and prohibiting the conversion of productive land, especially rice fields.
“Land conversion in Bali is already high. If we let it continue, our ecosystem will be damaged and food sources threatened within the next decade. We will tighten controls,” he said.
The provincial government also discovered numerous illegal villas operating without paying taxes, which disadvantages compliant local businesses. Koster said authorities will take firm action against violators.
“We support investment, but it must be controlled. Anyone breaking the rules will face consequences. Investment must not deprive local communities of their rightful share,” he said.
Koster told the deputy minister he plans to issue a new circular to serve as a technical guideline for tightening investment controls and curbing problematic investors.
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Meanwhile, Deputy Minister for Investment and Downstreaming, Todotua Pasaribu said the central government is committed to revoking permits from noncompliant investors.
“We have already revoked hundreds of licenses, from those harming SMEs to those violating local customs. The central and local governments cannot work separately, protecting local businesses must be a priority,” he said, adding that foreign capital must be balanced with meaningful contributions to local communities.
“We must regulate and ensure that foreign investors not only do business here but also deliver tangible benefits for the region and the country,” he said.
In response to Bali’s situation, Pasaribu announced plans to open a dedicated licensing desk for Bali to speed up coordination between the central government and the provincial administration. The desk will help streamline permit processing and enforcement, addressing long-standing operational issues.
(Raidi/Agung)
