Legal Steps to Build a Villa in Bali for Foreigners & Indonesians

Whether you’re a foreigner or a local, complying with legal regulations is the foundation of a secure and sustainable investment. From land ownership and building permits to business licenses and taxation, every step must align with Indonesian law.

If you’re planning to start your property or hospitality business in Bali, getting the legal side right from the beginning is non-negotiable. In this guide, we walk you through the complete legal steps to build a villa in Bali—so you can move forward with confidence, clarity, and compliance.

Land Ownership and Status

• Can own land under Hak Milik (Freehold Title).

• Ensure the land is free from dispute, not customary (adat) land, and not in a green zone.

For Indonesians Citizens ( WNI )

For Foreigners (WNA)

• Right to Use (Hak Pakai) – available for foreigners with KITAS/KITAP.

• Long-term Lease – up to 80 years (30 + 20 + 30).

• Via PT PMA (Foreign-Owned Company) – allows ownership under HGB (Right to Build).

Permits and Legal Documents

• Required before construction begins.

• Applied through the SIMBG online system.

• Must comply with zoning regulations (tourism/residential).

PBG (Building Approval) – replacement of IMB

SLF (Certificate of Building Worthiness)

• Issued after construction is completed.

• Confirms that the building is safe and compliant with the PBG.

• Mandatory before operation or rental.

TDUP (Tourism Business Registration)

• Required if the villa will be rented out for short stays (daily/weekly).

• Registered via OSS RBA under the tourism accommodation category.

• Must be under a legal entity (CV, PT PMDN, or PT PMA).

Tax ID (NPWP) & Business Legality

• Required for tax reporting and legal compliance.

• Includes income tax and annual rental tax obligations.

Legal Ownership Options for Foreigners

• Valid for 30 years + extensions.

• Can be under an individual foreigner’s name (with KITAS/KITAP).

• Suitable for personal residence or semi-commercial use.

Right to Use (Hak Pakai)

PT PMA (Foreign-Owned Company)

• Legal entity that allows HGB land ownership and commercial operation.

• Can operate a rental villa business legally.

• Must be established through a notary and registered via BKPM/OSS.

Why You Need a Legal & Licensed Consultant ?

• Due Diligence: Check land status, ownership, and zoning before buying.

• Zoning & Planning: Ensure the land is in the proper tourism/residential zone.

• Permit Handling: Assist with OSS & SIMBG processes from start to finish.

• Avoid Illegal Practices: Such as nominee structures (using an Indonesian citizen's name for foreign ownership), which are risky and illegal.

Operations & Tax Compliance

• Pay tourism rental taxes and business taxes.

• Ensure compliance with health, safety, and environmental standards (CHSE).

• List your property legally on OTA platforms (e.g., Airbnb, Booking.com).