Bali may be paradise on Earth, but beneath its golden beaches and warm hospitality lies a growing tension. While millions of international tourists arrive each year, an alarming number are no longer just here to holiday — they’re opening businesses, cutting into local livelihoods, and skirting regulations. Now, Bali is fighting back.
Foreign Business Boom: Paradise or Problem?
The Island of the Gods welcomed over 2 million international visitors in the first four months of 2025 alone — a 10.55% rise from last year. But along with sun-chasers and digital nomads came something else: a surge in unlicensed foreign-owned businesses.
Governor I Wayan Koster didn’t mince words:
“There are around 400 foreign-controlled car rentals and travel businesses in Badung alone. Many have no offices and don’t even live here. It’s outrageous!”
From illegal villas and rogue tour guides to shop-owning tourists, foreign nationals have found loopholes through Indonesia’s OSS (Online Single Submission) system, originally meant to ease investment — not exploit it.
The Hidden Cost of Hospitality
Balinese locals are known for their tolerance and generosity. But experts say this kindness is being taken advantage of. According to INDEF’s Izzudin Al Farras, tourists are now benefiting more than contributing, often sending profits back home instead of reinvesting locally.
Worse, many exploit Indonesia’s Visa on Arrival system. Critics argue it enables a wave of backpacker entrepreneurs who start homestays, cafes, or rental businesses with little oversight.
The 5 Modus Operandi of Foreign Business Takeovers
Economic analyst Nailul Huda from Celios detailed how foreign nationals often:
- Marry locals to acquire land and business rights.
- Buy assets from locals, pushing out original communities.
- Promote their businesses to tourists from their own country.
- Manipulate OSS licensing by using local names as legal fronts.
- Pose as remote workers, doing border runs while running businesses illegally.
Government Steps In: Crackdown Begins
In response, the Bali government launched an audit of tourism businesses, signed enforcement circulars, and initiated joint operations with Satpol PP and police. The Ministry of Immigration is also involved, deporting foreigners violating visa terms through Ops Bali Becik.
Agus Andrianto, Minister of Immigration, emphasized:
“Foreigners opening grocery stores or becoming guides without proper permits are taking jobs from locals. That’s not acceptable.”
What’s Next for Bali?
Experts now call for a shift from mass tourism to quality tourism, promoting smaller, personalized experiences over backpacker crowds. There’s also growing support to tighten visa rules, regulate micro-investments, and empower local MSMEs (UMKM) to thrive.
As Bali stands at a crossroads, one thing is clear: the island’s charm must not come at the cost of its soul.
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