Jakarta. Bali's provincial government has banned new foreign investment in motorcycle rental businesses, saying the move is intended to protect local small and medium-sized enterprises (SMEs) from growing competition by foreign-owned companies.

I Ketut Sukra Negara, head of Bali's Investment and One-Stop Integrated Services Agency (DPMPTSP), said on Thursday that motorcycle rentals are a business sector traditionally operated by local entrepreneurs and should remain reserved for them.

"Our goal is to strengthen local SMEs because these businesses belong to local entrepreneurs," Sukra said.

According to the government's Online Single Submission (OSS) licensing system, around 150 foreign investment companies are licensed to operate motorcycle rental businesses in Bali. However, inspections in popular tourist areas such as Canggu and Kuta found that more than 500 foreign-owned motorcycle rental operators are in business.

"The rest are operating illegally, so we have decided to shut them down," Sukra said.

Authorities said licensed operators will be supervised and guided to comply with regulations, while unlicensed businesses will be closed.

The provincial government has established an investment task force with the Investment Coordinating Board (BKPM) to monitor and take enforcement action against illegal foreign-owned businesses.

Officials said many foreign investors exploited virtual office addresses to obtain business permits through the OSS licensing system before expanding into sectors reserved for local businesses.

The crackdown extends beyond motorcycle rentals to include car and truck rental businesses, as well as other low-risk sectors such as fitness centers.

In total, Bali has closed 56 business classifications to new foreign investment, including 14 medium-low-risk and 42 low-risk business categories, in an effort to preserve opportunities for local SMEs.

Despite the tighter restrictions, investment in Bali remains strong. The province recorded Rp 13.31 trillion ($735.23 million) in realized investment during the first quarter of 2026, against a full-year target of nearly Rp 48 trillion. Domestic investment accounted for Rp 9.04 trillion, while foreign direct investment reached Rp 4.27 trillion.