In early 2026, a formal request from the Governor of Bali to the Minister of Investment sparked concerns regarding the legality of Virtual Offices (VO) for foreign-owned companies (PMA). However, a closer look at the legal framework reveals that while scrutiny is increasing, the Virtual Office remains a legitimate tool when used within the bounds of the law.

The key to remaining compliant lies in understanding the strict distinction between your Office Address and your Project Address.

The Core Distinction: Administrative vs. Operational

Under Indonesian business law and the OSS (Online Single Submission) system, a company must recognize two different types of addresses. Confusing these two is the primary cause of modern compliance issues.
 

1. Office Address (Alamat Kantor)

  • Purpose: This is your company's legal domicile and administrative home.
  • Usage: Used for official correspondence, NIB registration, Tax ID (NPWP) filings, and legal identity.
  • Legality: A Virtual Office is a recognized and legitimate option for this purpose. It fulfills the requirement for a registered address without needing a dedicated physical building.

2. Project Address (Lokasi Usaha)

  • Purpose: This is the actual physical location where your business activities take place (e.g., a villa, café, or consulting space).
  • Requirements: Must be registered in OSS with precise GPS coordinates and validated against spatial planning (KKPR).
  • Legality: A Virtual Office cannot serve as a Project Address. PMAs must also meet a minimum investment threshold of IDR 10 billion per business activity per location.

Why the Recent Crackdown?

The issue is not the Virtual Office itself, but rather "shell" registrations. Investigations found that nearly half of PMA registrations in Bali were using business licenses solely as a mechanism to obtain residency (KITAS) without contributing to the local economy.

Specifically, the authorities are targeting companies that have:

  • A virtual office as their only registered address.
  • No declared operational location or real business activity in the OSS system.
  • A low-risk business classification chosen only for administrative ease.

Regulatory Foundation: PP No. 28 of 2025

Government Regulation No. 28 of 2025 formally separates these obligations:

  • Article 207: Defines the data required for the company's administrative identity (name, office address, email).
  • Articles 210–211: Requires a separate declaration for each operational location, including headcount and planned investment value.

Is Your PMA Compliant?

To ensure your company is protected from upcoming enforcement, perform this quick self-check:

  • Do you have a separate Operational Location? It must be a physical address with coordinates, not your Virtual Office.
  • Does your investment meet the threshold? Generally, IDR 10 billion per KBLI code.
  • Does your KBLI match reality? Your classification must reflect what you actually do, not just a low-risk placeholder.

Next Steps for Investors

If your PMA relies solely on a Virtual Office without a declared operational site, now is the time to take corrective action. We recommend reviewing your OSS registration to confirm that your operational locations are properly declared and that your investment values are accurately stated.

Disclaimer: This article is for general informational purposes and does not constitute legal advice.

By: Adv. Dipo Farizi, S.H., CLA