The growing presence of illegal businesses operated by foreign nationals in Bali has prompted Governor Wayan Koster to take swift and decisive action.
In response, the Governor has formed a special cross-agency task force to conduct a comprehensive audit of all tourism-related business permits on the island. Additionally, new, stricter regulations are being prepared to protect local economic interests.
According to Radarbuleleng.id, “This island may be small, but its contribution to Indonesia is significant. We’re not competing with other provinces, we’re competing with countries like Thailand and Malaysia,” Governor Koster emphasized.
Joint Enforcement Operations
As an initial measure, the Bali Provincial Government has issued a Circular Letter on the Regulation of Tourism Businesses and Transportation, which serves as the legal foundation for joint enforcement operations involving Bali’s Public Order Agency (Satpol PP) and the Regional Police (Polda Bali).
“Bali must not become a free market that ends up destroying its own people,” said Koster, a native of Sembiran Village in Buleleng.
The Governor is also requiring all travel agencies to be registered under local associations. A factual verification processwill be carried out to eliminate “phantom companies”, those that are registered through the Online Single Submission (OSS) system but have no actual operations on the ground.
“There are many loopholes in the OSS system that foreign nationals exploit to gain control over strategic sectors,” Koster pointed out.
He revealed that many foreigners now dominate not only the homestay sector but also micro-scale businesses such as car and motorbike rentals.
“In Badung alone, there are around 400 car rental and travel agency permits held by foreigners. This is truly excessive,” he stated.
Koster stressed that these practices not only violate business ethics but also exacerbate economic inequality and undermine local livelihoods.
“If this is not addressed immediately, within the next five years Bali could face serious setbacks economically, socially, and in terms of its tourism image,” he warned.
Special Cross-Agency Task Force
As Bali strives to maintain its global reputation as a premier travel destination, concerns over unregulated businesses and tourism-related challenges continue to grow, prompting urgent action from local authorities.
“Our tourism is not in good shape, traffic congestion, waste problems, illegal villas, rogue drivers, unruly tourists. All of these issues need to be addressed. But it must start with regulation and permitting,” Governor Wayan Koster asserted.
The newly formed task force includes regional government leaders, vertical agencies, and representatives from tourism industry associations.
Tribatanews reports, “We are forming a special cross-agency task force to conduct a thorough audit of tourism business permits in Bali,” Koster announced on Sunday, June 1, 2025.
He explained that this initiative was driven by widespread complaints from the local community and small businesses, who have been increasingly marginalized by the growing dominance of foreign-run enterprises.
An evaluation of the OSS licensing system revealed a troubling number of illegal business activities conducted by foreigners, even at the micro-enterprise level, such as vehicle rentals and lodging.
“Many of them don’t have offices, don’t live in Bali, yet they’re still operating. This is unacceptable,” he said.
Through on-site investigations and regulatory reforms, the Bali Provincial Government aims to prevent further damage to the island’s economy, society, and tourism reputation. Governor Koster expressed hope that these measures will restore balance between foreign investment and local interests.
Sources: Radarbuleleng.id, Tribatanews.