Bali Urged to Crack Down on Illegal Foreign Businesses Threatening Local Communities
Jakarta, August 13, 2025 — The Indonesian government has been urged to take decisive action against the growing problem of foreigners operating illegal businesses in Bali, a move seen as crucial to protecting local communities and small enterprises on the resort island.
Chusnunia, deputy chair of Commission VII of the House of Representatives (DPR), which oversees industry, small and medium enterprises, creative economy, and tourism, highlighted concerns over the negative impact these illicit foreign enterprises have on the island’s economy. In a recent statement, she emphasized the urgent need to stop Bali from becoming a “free market” that ultimately harms its own people.
Local Businesses Under Threat
Complaints about illegal foreign-owned businesses have surged among Balinese locals and small business owners, reaching Commission VII and sparking widespread discussion on social media platforms. According to Chusnunia, these unauthorized operations create unfair competition, diminish economic opportunities for local entrepreneurs, and exacerbate economic inequalities.
A significant consequence of these illegal activities is visible in Bali’s hotel occupancy rates. Despite a steady influx of foreign tourists, many are reportedly staying at unlicensed lodgings like guesthouses run illegally by foreigners, which do not contribute to the official hospitality sector statistics.
Exploitation of Licensing Loopholes
Chusnunia pointed to the exploitation of loopholes within Indonesia’s Online Single Submission (OSS) licensing system. Some foreigners have been able to register businesses in strategic and micro sectors—such as car rentals and homestays—without proper authorization, intensifying the struggles of local companies to compete fairly.
Moreover, many foreigners are reportedly working illegally on tourist visas as photographers, tour guides, surf instructors, and in other tourism-related professions. This practice is not only unlawful but also undermines employment prospects for local workers.
Calls for Stronger Regulation and Enforcement
To tackle these challenges, Chusnunia urged stricter regulatory measures concerning foreign ownership in Indonesia’s tourism industry. She stressed the importance of the government’s firm response against illegal businesses and unauthorized foreign workers.
Further, she called for enhanced coordination between central and local governments to manage over-tourism in Bali effectively and tighten foreign investment rules, particularly in the micro, small, and medium enterprise (MSME) sectors.
Ongoing Efforts and Related Developments
The issue adds to ongoing efforts to preserve Bali’s economic and cultural integrity while promoting sustainable tourism. Recent initiatives include boosting collaboration across stakeholders to address tourism challenges, developing Bali as a premier wellness destination, and preserving the island’s rich heritage.
Balinese authorities have also been scrutinizing foreign-run villas and other hospitality businesses to ensure compliance with regulations. The government continues to implement programs to streamline immigration at Bali’s airport and to enhance public health and safety services.
As Bali faces the complexities of tourism-driven growth, tackling illegal foreign business operations has become a pivotal concern for safeguarding local welfare and economic equity.
For further updates on Bali’s economic and tourism policies, stay tuned to our news coverage.
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