This study aims to analyze the role of economic, cultural, symbolic, and social capital in shaping the relationship between expatriates and local communities in tourism development in Bali, as well as its impact on sustainable tourism. This research explores the development of the lifestyle of expatriates setting up businesses in popular tourism destinations in Bali, a “tropical paradise” that is increasingly attracting international expatriates. With reference to the concept of “capital” by Pierre Bourdieu, this study investigates the dynamics of capital conversion and the struggle for economic resources between expatriates and local communities in Bali tourism. A qualitative approach with in-depth interviews, observation, and participatory methods is used in this study. This study involved 27 participants, consisting of 17 expatriates and 10 local residents, who were selected from November 2022 to June 2023 in several well-known tourism destinations in Bali. Expatriates leverage their cultural and social capital to turn it into economic capital. This can create friction between expatriates and local residents who feel marginalized in the struggle for economic capital. Cultural integration that is prioritized in the expatriate lifestyle does not always run smoothly; instead, it often builds exclusive communities, which in turn creates “thick invisible walls,” widening the gap between expatriate relations with local people, local culture, and social life in where they live, so that it is not in line with the principles of sustainable tourism. This research provides valuable insights for all stakeholders on the dynamics of the expatriate presence in Bali and its impact on local communities and sustainable tourism.