DENPASAR, Bali — Hundreds of motorcycle rental businesses operating in Bali are suspected of being backed by foreign investment, while only a handful of foreign-owned companies are officially licensed to operate in the sector, according to provincial investment authorities.

The Bali Investment and One-Stop Integrated Services Agency, or DPMPTSP, said no more than five foreign investment companies, known locally as PMA firms, currently hold permits for motorcycle rental businesses.

However, the number of motorcycle rental operations suspected of involving foreign capital could reach between 400 and 500, according to DPMPTSP Bali chief I Ketut Sukra Negara.

“Motorcycle rentals are the most widespread. There are no more than five PMA motorcycle rental businesses with permits in Bali, but in practice there could be 400 to 500,” Sukra Negara said on October 1.

Authorities said the issue is part of a broader concern over foreign investment entering business sectors traditionally dominated by Bali’s micro, small and medium-sized enterprises.

Other sectors under scrutiny include salons, photography businesses and retail operations.

Sukra Negara said some foreign investors may be working with local partners to enter those sectors.

Officials are also examining suspected nominee arrangements, in which Indonesian citizens are formally listed as shareholders while a business is allegedly controlled by foreign nationals.

The practice has become one of the challenges facing Bali authorities in monitoring foreign investment and determining who ultimately controls businesses operating on the island.

Another issue highlighted by DPMPTSP involves the use of virtual offices.

Sukra Negara said officials had found multiple companies registered at the same address, including one commercial property linked to around 28 business identification numbers, or NIBs.

Similar cases were identified in Jembrana and along the Ngurah Rai Bypass, where authorities found individual office addresses associated with more than 20 registered businesses.

Authorities are particularly concerned when a company is formally registered for one type of activity but is suspected of conducting a different business in practice.

Bali previously moved to restrict foreign investment in motorcycle rental businesses as part of efforts to protect local small businesses.

In July, provincial authorities said the sector should remain focused on local micro, small and medium-sized enterprises, while acknowledging a significant gap between officially registered foreign-investment businesses and the number of operations found on the ground.

The provincial government said stronger post-licensing supervision would be needed to ensure foreign investment complies with permitted business activities.