BALINEWSID.COM, DENPASAR – The controversial use of nominee arrangements in foreign investment in Bali has once again come under scrutiny, with a member of Indonesia’s House of Representatives (DPR RI) calling for stricter enforcement of investment regulations and urging foreign investors to conduct business only through legally recognized Foreign Direct Investment (PMA) companies.

Bali legislator I Nyoman Parta said the widespread use of nominee schemes has disadvantaged local communities and enabled foreign investors to gain control over land and businesses without complying with Indonesian laws.

According to Parta, Bali’s unique position as one of the country’s most attractive tourism and investment destinations requires special treatment from the central government when formulating investment policies.

“Bali is a unique island. Investors from around the world are competing to invest here. Therefore, the central government should not treat Bali the same as other regions in terms of investment policy,” Parta said recently.

He stressed that all foreign investors wishing to operate businesses in Bali should be required to establish their ventures through the Foreign Direct Investment (PMA) mechanism, rather than relying on nominee arrangements in which Indonesian citizens lend their names to hold assets or operate businesses on behalf of foreigners.

“I appeal to Balinese people and all Indonesians not to become nominees if we want Bali’s tourism sector to be orderly. Do not become proxies for foreign investors. Every investment should go through the PMA mechanism so that its legal status and tax obligations are clear,” he said.

Parta also criticized the current minimum investment requirement for PMA companies, which is set at Rp10 billion. In his view, the threshold is too low for foreign investors and allows multiple investors to pool their capital, making it easier to enter Bali’s market while local entrepreneurs continue to struggle with limited access to financing.

“For foreign investors, Rp10 billion is actually too small. Two or three investors can simply combine their capital. Meanwhile, local people often have to gather funds from many individuals. The investment requirement for foreigners should be increased, while local entrepreneurs should be given greater support,” he said.

He warned that the continued use of nominee schemes could damage Bali’s international reputation as a tourism destination while creating opportunities for legal violations, including bribery and corruption.

Parta also called on Indonesia’s Directorate General of Immigration to strengthen supervision of foreign nationals entering Bali.

“Immigration is the front line. Illegal practices must be stopped so that Bali does not continue to deteriorate,” he said.

Meanwhile, Head of the Bali Provincial Office of the National Land Agency (BPN), Eko Priyanggodo, said the Bali Provincial Government has introduced a regional regulation, commonly referred to as the Nominee Regulation (Perda Nominee), as part of efforts to curb the practice.

However, Eko explained that BPN’s authority is limited because nominee arrangements are generally established through private civil agreements drawn up before a notary and are legally binding only on the parties involved.

“Nominee agreements are usually made in the form of notarial deeds and are binding only on the parties who sign them. Therefore, BPN cannot intervene in the substance of those agreements,” he said.

To strengthen oversight, BPN Bali is currently preparing a Cooperation Agreement (PKS) with the Bali Police. The agreement is still under discussion and is expected to eventually include the Bali High Prosecutor’s Office.

“Once the cooperation agreement is signed, we hope to continue collaborating with the police and prosecutors to monitor and take action against nominee practices in Bali,” Eko said.