Reference Guide

Bali Property Permits & Licenses Glossary

A comprehensive dictionary of Indonesian property, real estate, and legal terms. Essential knowledge for anyone investing in or owning property in Bali.

Permits & Licenses Ownership & Land Rights Zoning & Planning Legal & Government Taxation

Permits & Licenses

(7 terms)

NIB

Nomor Induk Berusaha — Business Identification Number

Permits & Licenses

What is NIB (Nomor Induk Berusaha)?

NIB (Nomor Induk Berusaha) is the foundational business identification number in Indonesia, issued through the OSS (Online Single Submission) system. An NIB serves as your company identity for all commercial activities and is required before obtaining tourism permits for vacation rentals.

Why is NIB required for property rentals in Bali?

An NIB is mandatory because you cannot legally operate any business in Indonesia without one, including short-term vacation rentals. NIB is the first step in the permit chain—without it, you cannot apply for tourism registration (Sertifikat Standar Pariwisata) or legally list your property on Airbnb.

Sertifikat Standar Pariwisata

Sertifikat Standar Pariwisata — Tourism Standard Certificate

Permits & Licenses

What is Sertifikat Standar Pariwisata?

Sertifikat Standar Pariwisata is the current tourism business registration under Indonesia's risk-based licensing system, which replaced the former TDUP in 2021. Governed by PP No. 5/2021 and Law No. 6/2023 (Job Creation Law), this Sertifikat Standar authorizes your property for tourism activities including short-term vacation rentals and is obtained through the OSS system based on your business risk classification.

Why do Bali vacation rentals need Sertifikat Standar Pariwisata?

Sertifikat Standar Pariwisata is mandatory for Airbnb and other short-term rental platforms in Bali. Without proper Sertifikat Standar tourism registration, your property cannot be legally listed for tourism purposes. Your risk classification determines whether you need a self-declared or government-verified certificate.

Related:NIB OSS Pink Zone TDUP (Legacy)

TDUP (Legacy)

Tanda Daftar Usaha Pariwisata — Tourism Business Registration Certificate (Replaced)

Permits & Licenses

What is TDUP (Tanda Daftar Usaha Pariwisata)?

TDUP (Tanda Daftar Usaha Pariwisata) was the tourism business registration certificate used in Indonesia until 2021. TDUP has been replaced by the Sertifikat Standar Pariwisata under Indonesia's risk-based licensing system (PP No. 5/2021 and Law No. 6/2023). The new system categorizes businesses by risk level and processes applications through the OSS system.

Is TDUP still valid for Bali property rentals?

TDUP is no longer issued as a separate permit. If you have an existing valid TDUP, check with local authorities about its status under the new system. All new tourism permit applications must use the Sertifikat Standar Pariwisata process via OSS instead of TDUP.

PBG

Persetujuan Bangunan Gedung — Building Approval

Permits & Licenses

What is PBG (Persetujuan Bangunan Gedung)?

PBG (Persetujuan Bangunan Gedung) is the building approval permit in Indonesia that replaced the old IMB in 2021. A PBG certifies that your building construction meets Indonesian building codes, safety standards, and is appropriate for its intended use including vacation rentals.

Why is PBG required for rental properties in Bali?

PBG is required for any new construction or major renovation in Bali. For rental properties, a valid PBG confirms the structure is safe for commercial occupancy and meets all Indonesian building regulations for guest accommodation.

Related:IMB SLF Building Code

IMB

Izin Mendirikan Bangunan — Building Construction Permit (Legacy)

Permits & Licenses

What is IMB (Izin Mendirikan Bangunan)?

IMB (Izin Mendirikan Bangunan) is the legacy building construction permit system used in Indonesia before 2021, now replaced by PBG. Existing valid IMB certificates are still recognized for properties built before the transition, but new building permit applications must use the PBG system.

Is my IMB still valid for my Bali property?

If your Bali property has an older IMB, it remains valid unless expired. Check your IMB expiration date and any conditions attached. For new constructions or major renovations, you must apply for PBG instead of IMB.

Related:PBG SLF

SLF

Sertifikat Laik Fungsi — Certificate of Functional Worthiness

Permits & Licenses

What is SLF (Sertifikat Laik Fungsi)?

SLF (Sertifikat Laik Fungsi) is the certificate of functional worthiness in Indonesia, confirming that a completed building is safe for occupancy and use. An SLF is issued after a physical inspection verifies that the building matches approved plans and meets all safety requirements.

Why is SLF important for Bali vacation rentals?

SLF is the final step in building compliance for Bali properties. An SLF is required to demonstrate your property is safe for guests and legally compliant for rental operations. Without a valid SLF, your building may not be approved for commercial vacation rental use.

Related:PBG Fire Safety Certificate

OSS

Online Single Submission — Online Single Submission System

Permits & Licenses

What is OSS (Online Single Submission) in Indonesia?

OSS (Online Single Submission) is the Indonesian government's online platform for business licensing and permits. NIB, Sertifikat Standar Pariwisata, and many other business permits are obtained through the OSS system under Indonesia's risk-based licensing framework.

How do you get vacation rental permits through OSS?

OSS streamlines permit applications in Indonesia but requires proper documentation and business registration. The OSS system verifies business and zoning compliance and determines your risk classification, which affects whether your Sertifikat Standar is self-declared or requires government verification.

Ownership & Land Rights

(4 terms)

SHM

Sertifikat Hak Milik — Freehold Certificate / Certificate of Ownership

Ownership & Land Rights

What is SHM (Sertifikat Hak Milik)?

SHM (Sertifikat Hak Milik) is the strongest form of land ownership in Indonesia, representing full freehold rights with no time limitation. An SHM certificate can only be held by Indonesian citizens and certain approved Indonesian entities—foreigners cannot hold SHM title directly.

Can foreigners own SHM property in Bali?

Foreigners cannot hold SHM directly under Indonesian law. Bali properties with SHM certificates often use nominee arrangements (legally risky) or must be converted to other ownership structures like HGB or Hak Pakai for foreign investment.

Related:HGB Hak Pakai Nominee

HGB

Hak Guna Bangunan — Right to Build / Building Rights Certificate

Ownership & Land Rights

What is HGB (Hak Guna Bangunan)?

HGB (Hak Guna Bangunan) is a land title in Indonesia that grants the right to construct and own buildings on land for up to 30 years, extendable for 20 more years. HGB certificates can be held by Indonesian companies, including PT PMA (foreign-owned companies), making it the primary legal vehicle for foreign property ownership.

Why is HGB important for foreign property investors in Bali?

HGB is the primary vehicle for foreign investment in Indonesian real estate. Foreign investors use PT PMA companies with HGB certificates to legally own property in Bali. Unlike SHM, HGB allows foreigners to have legal ownership through a corporate structure.

Related:PT PMA SHM Land Certificate

Hak Pakai

Hak Pakai — Right to Use

Ownership & Land Rights

What is Hak Pakai in Indonesian property law?

Hak Pakai is a land right in Indonesia that allows the holder to use and occupy land for a specified period (up to 25 years, extendable). Unlike SHM and HGB, Hak Pakai can be held directly by foreigners for residential purposes, making it a unique option for individual foreign ownership.

Can foreigners hold Hak Pakai property in Bali?

Hak Pakai is one of the few legal ways for foreigners to hold property rights directly in their own name in Bali. However, Hak Pakai is limited to certain property types and residential use, so it may not be suitable for commercial vacation rental operations.

Related:SHM HGB Foreign Ownership

Hak Sewa

Hak Sewa — Leasehold / Rental Right

Ownership & Land Rights

What is Hak Sewa (leasehold) in Bali?

Hak Sewa is a long-term lease agreement in Indonesia, typically 25+ years, that grants usage rights to property without ownership transfer. Hak Sewa is the most common structure for foreigners investing in Bali villas, allowing them to control and profit from property without the complications of ownership.

Is Hak Sewa a safe investment structure for Bali villas?

Hak Sewa is the most common legal structure for foreign villa investors in Bali. A properly structured Hak Sewa lease agreement provides security and control without the legal risks of nominee ownership arrangements. Always have leases reviewed by a qualified Notaris.

Related:Lease Agreement Notaris

Zoning & Planning

(4 terms)

RDTR

Rencana Detail Tata Ruang — Detailed Spatial Planning

Zoning & Planning

What is RDTR (Rencana Detail Tata Ruang)?

RDTR (Rencana Detail Tata Ruang) is Indonesia's detailed spatial plan that determines what activities are permitted at the block and parcel level. Since 2025, RDTR is the legal basis used by the OSS (Online Single Submission) system to validate business locations. Bali's RDTR maps designate zones by color—pink for tourism, yellow for agriculture, and green for protected areas.

Why does RDTR zoning matter for Bali vacation rentals?

RDTR zoning is fundamental to property legality in Bali. If your property is in the wrong RDTR zone (yellow or green), no permits can make short-term rentals legal. Always verify RDTR zoning before purchasing or leasing property for vacation rental purposes.

Pink Zone

Kawasan Pariwisata — Tourism Zone

Zoning & Planning

What is Pink Zone (Kawasan Pariwisata) in Bali zoning?

Pink Zone (Kawasan Pariwisata) refers to areas designated for tourism and commercial activities on Bali's RDTR zoning maps. Short-term vacation rentals are only permitted in Pink Zone areas when the property has proper NIB and Sertifikat Standar Pariwisata permits.

Can I legally operate an Airbnb outside Bali's Pink Zone?

Only properties in Pink Zone areas can legally operate as short-term vacation rentals in Bali. Approximately 60% of Bali properties are NOT in Pink Zones. If your property is outside a Pink Zone, you cannot legally list it on Airbnb regardless of other permits obtained.

Yellow Zone

Kawasan Pertanian — Agricultural Zone

Zoning & Planning

What is Yellow Zone (Kawasan Pertanian) in Bali?

Yellow Zone (Kawasan Pertanian) refers to areas designated for agricultural use on Bali's RDTR zoning maps. Short-term vacation rentals are strictly prohibited in Yellow Zone areas regardless of any permits obtained, as these zones are reserved for farming and agricultural activities.

Why are Yellow Zone vacation rentals illegal in Bali?

Yellow Zone vacation rentals are illegal in Bali because these areas are designated for agriculture, not tourism. Approximately 80% of Canggu falls in Yellow Zones despite being popular for vacation rentals. Properties in Yellow Zones cannot legally operate short-term rentals and face enforcement risk.

Related:RDTR Pink Zone Zoning Violation

Green Zone

Kawasan Lindung — Protected Zone

Zoning & Planning

What is Green Zone (Kawasan Lindung) in Bali?

Green Zone (Kawasan Lindung) refers to environmental protection areas on Bali's RDTR zoning maps with strict building and activity restrictions. No commercial activities including vacation rentals are permitted in Green Zone areas, which are reserved for environmental conservation.

Can you build or operate rentals in Bali's Green Zone?

Green Zone is the strictest zoning category in Bali. Even residential construction may be restricted in Green Zone areas. Properties in Green Zones have extremely limited options and cannot be used for vacation rentals or most commercial purposes.

Related:RDTR Environmental Permit

Legal & Government

(7 terms)

PT PMA

Perseroan Terbatas Penanaman Modal Asing — Foreign Investment Company

Legal & Government

What is PT PMA (Perseroan Terbatas Penanaman Modal Asing)?

PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a foreign investment company established under Indonesian law. A PT PMA can hold HGB land rights and operate businesses including property rental, making it the primary legal vehicle for foreigners to own and operate real estate in Indonesia.

Why do foreign investors need PT PMA for Bali property?

PT PMA is the primary legal vehicle for significant foreign property investment in Indonesia. Through a PT PMA, foreigners can legally hold HGB land certificates, operate vacation rental businesses, and obtain necessary permits like NIB. PT PMA establishment requires minimum capital investment and BKPM approval.

Related:HGB NIB BKPM

Nominee

Nominee — Nominee Ownership Structure

Legal & Government

What is nominee ownership in Indonesian property?

Nominee ownership is an arrangement where an Indonesian citizen holds property title (usually SHM) on behalf of a foreigner. While nominee structures are commonly used in Bali, Indonesian courts have ruled these arrangements illegal as they circumvent foreign ownership restrictions under Indonesian law.

Is nominee ownership safe for Bali property investment?

Nominee ownership is HIGH RISK and should be avoided. The Indonesian nominee is the legal owner and can sell, mortgage, or refuse to transfer the property. When the nominee dies, their heirs inherit—not you. Use legal alternatives like PT PMA with HGB or Hak Pakai instead of nominee arrangements.

Related:SHM PT PMA Hak Pakai

BPN

Badan Pertanahan Nasional — National Land Agency

Legal & Government

What is BPN (Badan Pertanahan Nasional)?

BPN (Badan Pertanahan Nasional) is the Indonesian National Land Agency responsible for land administration, registration, and certification. BPN maintains official records of all land ownership in Indonesia, including SHM, HGB, and Hak Pakai certificates.

Why is BPN verification important for Bali property purchases?

All legitimate property ownership in Indonesia is registered with BPN. Before purchasing property in Bali, title verification requires checking official BPN records to confirm the seller is the legal owner and there are no encumbrances or disputes on the land certificate.

Related:Land Certificate SHM HGB

PPAT

Pejabat Pembuat Akta Tanah — Land Deed Official

Legal & Government

What is PPAT (Pejabat Pembuat Akta Tanah)?

PPAT (Pejabat Pembuat Akta Tanah) is a specially licensed land deed official in Indonesia authorized to create official land transaction documents. All property transfers and sales in Indonesia must be executed before a PPAT to be legally valid.

Why do you need PPAT for Bali property transactions?

Legal property transactions in Bali require PPAT documentation for the transfer to be valid. A PPAT-signed deed (AJB) provides court-ready documentation and is required for registration with BPN. Always use a licensed PPAT for property purchases.

Related:Notaris AJB Land Certificate

Notaris

Notaris — Notary Public

Legal & Government

What is a Notaris in Indonesian law?

A Notaris is a public official in Indonesia authorized to authenticate documents, create official deeds, and provide legal services. A Notaris is different from a PPAT, though many Indonesian legal professionals hold both titles and can handle both land and non-land transactions.

When do you need a Notaris for Bali property matters?

A Notaris is required for many legal documents in Indonesia including PT PMA company formation, lease agreements (Hak Sewa), and power of attorney. For property purchases, you typically need both a Notaris and PPAT, or a professional who holds both titles.

Related:PPAT Akta

AJB

Akta Jual Beli — Deed of Sale and Purchase

Legal & Government

What is AJB (Akta Jual Beli)?

AJB (Akta Jual Beli) is the official deed of sale and purchase document in Indonesia that transfers property ownership from seller to buyer. An AJB must be executed before a licensed PPAT and is required for all property sales to be legally valid.

Why is AJB essential for Bali property purchases?

Without a proper AJB, property ownership transfer is not legally complete in Indonesia. When purchasing Bali property, always verify AJB authenticity and the complete chain of ownership. An AJB is required to update ownership records at BPN.

PP No. 6/2025

Peraturan Pemerintah Nomor 6 Tahun 2025 — Government Regulation Number 6 of 2025

Legal & Government

What is PP No. 6/2025 for Indonesian vacation rentals?

PP No. 6/2025 (Peraturan Pemerintah Nomor 6 Tahun 2025) is the Indonesian government regulation requiring all short-term rental properties to have valid business permits (NIB) and tourism registration (Sertifikat Standar Pariwisata). PP No. 6/2025 mandates that online travel agencies verify property compliance.

How does PP No. 6/2025 affect Bali Airbnb rentals?

PP No. 6/2025 is CRITICAL for Bali vacation rentals. The enforcement deadline is March 31, 2026. Non-compliant properties without valid NIB and Sertifikat Standar Pariwisata will be removed from Airbnb, Booking.com, and other online travel platforms.

Taxation

(1 terms)

PBB

Pajak Bumi dan Bangunan — Land and Building Tax

Taxation

What is PBB (Pajak Bumi dan Bangunan)?

PBB (Pajak Bumi dan Bangunan) is the annual land and building tax paid to the Indonesian government. PBB tax receipts (called SPPT) serve as evidence of continued ownership, tax compliance, and can help verify property boundaries.

Why should you check PBB records before buying Bali property?

Verify at least 5 years of PBB tax receipts during property due diligence in Bali. Unpaid PBB taxes can result in penalties, complications with ownership transfer, and may indicate ownership disputes. PBB receipts also help verify the property boundaries match the certificate.

Related:SPPT Property Tax

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