AI in Business: What Bali Entrepreneurs Need to Know About Indonesia’s Regulations

The artificial intelligence revolution is reshaping how businesses operate globally, and Indonesia is preparing to join the regulatory conversation. For entrepreneurs and investors in Bali, understanding these emerging AI regulations isn’t just about compliance—it’s about staying competitive in an increasingly digital economy.

Indonesia’s AI Regulatory Landscape

Indonesia’s government has postponed its comprehensive AI roadmap to early 2026, with the presidential regulation expected to prioritize ethics, safety, and security as the foundation for all AI use. This delay reflects the careful approach Indonesian regulators are taking to balance innovation with responsible governance.

Currently, Indonesia doesn’t have dedicated AI regulation but relies on existing frameworks including electronic information and transactions laws, personal data protection, and regulations for electronic system operators. This means businesses using AI today must ensure compliance with the Personal Data Protection (PDP) Law and the Electronic Information and Transactions (ITE) Law.

What This Means for Your Bali Business

For Tech Startups and Digital Businesses

If your company operates in Bali’s growing tech sector, particularly in fintech, e-commerce, or digital services, you need to prepare now. Businesses involved in AI-based programming activities fall under Indonesian Business Classification Code 62015 and must adhere to applicable legislation, implement internal policies on data management and AI ethics, and submit annual activity reports.

For Foreign Investors

Foreign investors establishing operations in Bali should factor AI governance into their business formation strategy. The upcoming regulations will require sector-specific compliance, meaning your legal structure and operational policies need flexibility to adapt to new requirements as they’re announced.

For Traditional Businesses Adopting AI

Even if you’re not a tech company, using AI tools for customer service, marketing automation, or business analytics puts you within the regulatory scope. Simple steps like documenting your AI systems, ensuring data protection compliance, and maintaining human oversight can position you ahead of enforcement.

Global AI Trends Impacting Indonesia

The international regulatory environment is accelerating rapidly. By August 2026, companies operating in the European Union will need to comply with specific transparency requirements and rules for high-risk AI systems under the EU AI Act. In the United States, Colorado’s AI Act introduces compliance obligations starting June 30, 2026, for entities using high-risk AI tools for employment and other consequential decisions.

These global standards are likely to influence Indonesia’s regulatory approach, particularly as the country positions itself as a digital economy leader in ASEAN.

Practical Steps for Bali Businesses

Start Your AI Governance Now

Don’t wait for final regulations. Establish internal policies covering:

• How AI systems are selected and deployed
• Data protection and privacy measures
• Human oversight requirements
• Documentation and audit trails

Review Your Vendor Contracts

If you’re using third-party AI services (like chatbots, analytics platforms, or automation tools), ensure your contracts address data usage, IP rights, and compliance responsibilities.

Assess Your Risk Profile

Not all AI use carries equal risk. Customer service chatbots present different compliance challenges than AI systems making credit decisions or employment recommendations. Understanding your risk level helps prioritize your compliance efforts.

Stay Informed Through Sector-Specific Guidance

Once the presidential regulation is published, each ministry and agency will be responsible for drafting its own implementing rules. Your business sector may face unique requirements, so monitoring announcements from relevant ministries is essential.

Read more: The Future of Cybersecurity Law: Navigating and Beyond

The Legal Advantage

Working with legal counsel familiar with both Indonesian regulatory requirements and international AI standards provides competitive advantages. At Kalimasada Papers, we help Bali-based businesses navigate the intersection of technology, data protection, and corporate compliance.

Whether you’re forming a new company that will leverage AI, structuring investment in tech ventures, or updating existing business practices, having proper legal guidance ensures you’re building on solid regulatory foundations.

Looking Ahead

According to Indonesia’s Coordinating Ministry for Economic Affairs, AI’s contribution to Indonesia’s GDP is projected to reach $366 billion by 2030, with 62% of Indonesian companies expected to adopt AI. This massive growth presents opportunities for businesses that prepare now rather than react later.

The regulatory framework taking shape in 2026 will define how Indonesian businesses compete in the AI era. For Bali’s entrepreneurial community, this moment represents a chance to build compliant, innovative businesses positioned for sustainable growth.

Need legal guidance on AI compliance for your Bali business? Contact Kalimasada Papers for expert consultation on business formation, regulatory compliance, and corporate law in Indonesia. Our team understands both the local regulatory environment and international standards affecting businesses in Bali.