How to run a startup in Bali

The island of Bali is one of the provinces of Indonesia, but differs from all others by a unique feature - religion. The Balinese are the only ethnic group in a Muslim country that professes its own religion - Balinese Hinduism or belief in ghosts. Therefore, if you decide to conduct your business in this area, then get ready for the features that I will now try to tell you.

Step one. How to come to Indonesia in order to create a startup

The startup in which I participated concerned the creation of an electronic map of the island for tourists. To open a company, they chose a form of a limited liability company with foreign capital (PMA in Indonesian). Perhaps this is the most difficult option for opening a legal entity, but the business owner did not want options when one of the founders is a citizen of Indonesia (although this gives certain privileges more quickly).
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The most important thing that will be required at the first stage is the legality of your stay in the country. If you have arrived on a tourist visa for 30 days, not a single notary will agree to prepare for you a set of primary registration documents. Thus, you need to enter the country on a business visa for 180 days, you can issue such a visa at the Embassy of Indonesia. An important nuance - the set of documents includes a letter from the sponsor-citizen of Indonesia and his ID (citizen card, like our passport). Such a sponsor could be your potential partner, a person who rents you an office or a car on the island or, in general, any person with whom you can agree in advance. Google will offer you a lot of agencies in Bali that provide sponsorship for a business visa. Subsequently, you will be able to change the business visa to a working one under your already registered company.

Step two. How to register your company if you are a foreigner

So, arriving on the island with a business visa, you can begin the registration procedure. Documents on Bahasa Indonesia (Indonesian) will prepare you any notary, of whom on the island of darkness. You can even find them on the street on the label NOTARI. In one working day, the notary will prepare for you the company's charter and the decision on creation. But, unfortunately, for a company with foreign investments, this is not enough to get started.
The next step is to obtain a work permit from the Ministry for the Coordination of Foreign Investments, which must be received - a surprise! - on the island of Java, in the capital, Jakarta. Indonesians call this body BKPM for short. The fact is that this body has no regional offices. Get ready to fly there to submit and collect documents.

I flew to Jakarta for two days with a reserve, as the work schedule for officials due to the abundance of religious holidays and ceremonies in the whole country can be very unstable. For example, at the stated start of work from 09:00, our curator came to work only at 10:30. To my question "What is the matter?" Answered: "Sorry, miss, morning fitness class." BKPM needs to submit a decision on the creation of a legal entity, a charter, copies of passports and founders' visas, application form and a business plan in any form. Specialists will consider the documents for 1-2 weeks, after which they will contact you by means of a notification in their personal account on the ministry’s website (they will tell you about this after receiving the documents).

Our documents were approved the third time, the statement found inaccuracies and asked for the corrected papers to be sent. By the way, there is no state fee for this permission.

Step three. How to tell about your company to interested government agencies

After receiving permission from the capital, we began to tax the company in Bali. The local tax authority is called Direktorat Jenderal Pajak. He will ask you for all the above-mentioned documents, including permission from BKPM, and a very interesting document (domicile) from the banjar. Banjar in Bali is a religious management company that divides the whole island into districts.

We asked the head of the Banjar, where we rented the office, to give us permission to work in their territory. In fact, on a piece of paper it is written that "the spirits of the Banjar have nothing against the coming of foreigners to our lands." In this case, the spirits raped us $ 30. In addition, the Bangazhar member on duty will come to you every month and ask for a $ 10 fee for cleaning the area. By the way, they really water the grass, take out the garbage, sweep the parking lot, bring sacrificial baskets of flowers for the spirits of the office and keep order in the territory entrusted to them. I advise you to be friends with your banjar, as they can influence even government officials.

After a week, the tax inspectorate will issue you a card with an INN and prompt you to contact the next authority, One Step Service. This is a very convenient organization, such as our multifunctional centers. There, on the basis of all available documents, you will be given a local license for the type of activity and social insurance in 14 days. They will additionally ask you for an office lease agreement and a statement from the environmental department that your company will not harm the ecology of the island.

In principle, at this stage you can begin to work independently and hire local citizens in the state.

Step Four. How to arrange Russian developers in your Balinese company

The most interesting thing begins if you decide to hire foreigners in your company, read Russian, as it was in our case. The company was staffed with seven Russian employees (CEO, sysadmin, lawyer and four product managers in different areas). For legal work with such a composition, you will need state licenses, which are abbreviated as RPTKA and IMTA.

Guess who gives permission to hire foreign employees in a foreign company? Right. We are going and flying to Jakarta in BKPM. For each foreigner we are preparing a questionnaire, a passport, a copy of the diploma, a letter about the need to hire him and the same set of documents for his “junior locale”. This trick Indonesia applies to solve the problem of unemployment. Workers give visas to foreigners rarely and only under the dressing “transferring the experience of a highly qualified foreign specialist to a local employee of one firm”. Such specialists include, among others, programmers, top management, engineers, international lawyers, specialists in the field of finance and securities.

Each of us was assigned a real local colleague. It may seem that the scheme is easy to get around by attaching documents from people who do not work for you. Do not expect. During the two-month registration procedure, representatives from the labor department will come to visit you several times and politely check each of your localities.
I note that you will not be able to get a work visa for legal work in a Bali company as a tattoo artist, hairdresser or yoga trainer precisely because of the lack of “high qualification” in the representation of the Indonesian authorities.

All documents must be translated into Indonesian and certified by the consular seal. I did this in the Russian consulate in Bali, which is located in the Bukit area, the village of Ungasan. There lives an honorary consul named Nuka Kamka, who for a fixed fee will gladly put his honorary seal on translations of documents.

After a couple of months, you may receive permission to hire foreigners. After that, you need to pay a visa fee in the bank in the amount of $ 1,200 for each employee. Based on your RPTKA, IMTA and payment checks, you can apply for a KITAS work visa via electronic communication to the Indonesian embassy in any country in the world where you can conveniently receive it. We received our CITAS in Singapore and some of us in Moscow. In any case, even if your foreign workers all the time were on the island on a tourist visa, they will need to fly out of the country and fly in again with a visa in the passport. A year later, KITAS will need to be extended, but already on the island, without departing abroad.

Step five. How to safely and happily work in a new company

In such a PMA-company you can hire up to 20 foreign employees. In general, Indonesia does not have special requirements for IT companies. No additional costly licenses (like fishing or tourism) are required. Checks from the tax, labor and immigration inspections are successful, if you are not too lazy to collect all the necessary papers. It is important to have a staff lawyer who will speak Bahasa Indonesia, Bahasa Bali (special island dialect) and in English. This will help you understand the nuances of relations with state and local authorities.

It is worth remembering that the Balinese love hospitality and money. Before the arrival of the inspectors, we always laid a table in the office and served tea, sweet pastries and fruit. In addition, you will need a local accountant to avoid running into fines and pay taxes on time. By the way, corporate income tax is 10%, and there is no export tax in Indonesia at all.

The whole procedure from the desire to have a development office in Bali to the first release of the product took us three years. The company has grown from 3 people to 50, of which 44 are local. Exact financial investments in the opening of the company is now difficult to calculate, but the approximate amount excluding the hiring of foreign employees is $ 7,000. Plus, count office rent and salary to your employees. By the way, the minimum monthly salary for locales established in Bali for 2016 is $ 135.

For illegal business operations, corporate violations and violations of immigration law in Indonesia, there are very serious sanctions ranging from fines to deportation from the country and a prison term. If your intentions are honest, then everyone will meet you and everything will work out. Go for it.

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