orlovlegal.com – BASED on insights from Oleg Orlov, lawyer at PT Southeast Partnership Indonesia
Many foreigners come to Indonesia, set up a PT (limited liability company), and end up holding an investor KITAS. So far, so good. Trouble starts when that permit gets used for something else: running a small business in their own name, or working for another company. The good news is that all of this is avoidable if we understand the limits from the start.
An investor permit is narrow, but many people assume it’s broad
Oleg Orlov keeps seeing the same pattern.
“Foreigners very often come to Indonesia, set up a PT, and act as investors. The problem is that the investor status is often used the wrong way,” he said.
It’s not about serving as a director or commissioner. That is a normal part of an investor’s role. The mistake is assuming an investor KITAS is enough to run a small business in your own name.
“Foreigners often think an investor KITAS can be used for a small business, a business of their own.”
Enforcement on the ground is getting real
Mr. Orlov’s explanation comes from an older video and is not a response to any specific case. Still, enforcement is clearly active: on August 24, 2026, the Denpasar Immigration Office deported an investor KITAS holder who could not explain what line of business their company was in during a patrol check. Between January and June 2026, 342 foreigners were deported from Bali.
Why the line is drawn so firmly
Because a residence permit in Indonesia is always tied to a specific purpose and a specific party.
“An investor KITAS only gives you the right to put capital into your own company and, at most, to lead it as a director or president director,” Oleg said.
Individual businesses and UMKM (micro, small and medium enterprises) are not covered.
Five steps to stay safe
- Make sure your PT is genuinely operating. It has an office and business activities that match its deed of establishment.
- Stay within the investor role. Investing capital and leading your own company as a director is your room to operate.
- Want to work? Get a work permit. According to Oleg, permits issued by the government are based on a sponsor, meaning a specific company. “A foreigner may work only at that company, not at any other.”
- Want to start a small business of your own? Get advice first. Check whether that sector is open to foreigners before you start selling or taking clients. At this stage, talking to a lawyer such as Oleg Orlov at PT Southeast Partnership Indonesia helps make sure your business structure is set up properly.
- Be ready for an officer’s questions. Be able to explain your business in two sentences: what field it is in, and where it operates.
The bottom line is simple: use your permit for what it is for, and get the right permit if you want to do something else. If you’re still unsure what your permit covers, the team at PT Southeast Partnership Indonesia can help you check before you begin. (*)
