Renting Out a Villa in Bali Legally: Licences, the 2025 to 2026 Rules and What Owners Must Have
Short-term letting of a villa in Bali is an accommodation business, and every accommodation business needs a licence through Indonesia’s national online licensing system, OSS: a business identification number (NIB) tied to a business-classification code (KBLI). In the 2026 enforcement round, the tourism ministry asked listed properties to show an NIB, a KBLI, a business-activity number (NKU) and a tax number (NPWP). By 1 August 2026, 259 unlicensed listings had been removed from online travel platforms, and the ministry is aiming for an automatic verification link with those platforms by 1 June 2027.
A foreign owner has two lawful routes: run the rental through your own Indonesian company with foreign shareholders (a PT PMA) holding an accommodation business line, or let through a licensed Indonesian operator. Rentals run through a nominee are void and illegal. Airbnb is not banned. The government’s target is unlicensed operators, not the platforms.
This is the position as of October 2026. A few details are still open, including exactly which accommodation codes a foreign-owned company can hold in Bali, and we flag them below.
What the law treats a villa rental as
The licensing framework is PP 28/2025, the government regulation on risk-based business licensing, together with Tourism Ministry Regulation (Permenpar) 6/2025. Under it, letting a villa to tourists is not passive income from property. It is a business that has to be registered and licensed.
The same distinction runs through the tax side: short-term villa rental run as a business is accommodation business income, normally earned through a licensed operator or a PT PMA, rather than rent. That difference decides which licences you need and which taxes apply.
There is one category foreign owners sometimes hear about and should set aside. Pondok Wisata, the homestay category (KBLI 55130), covers a residential house occupied by its owner, with part of it let to tourists, and owned by the local community for local economic empowerment. It is not a structure for foreign owners.
The 2026 enforcement round, by the numbers
In June 2026 the tourism ministry (Kemenpar) said it had identified more than 1,600 accommodation listings on online travel agents without business permits. It sent the list to the platforms on 1 June 2026 and planned delisting from 1 August. Operators had until 31 July to complete their documents. The round covered nine platforms: Airbnb, Trip.com, Expedia, Traveloka, RedDoorz, Agoda, Booking.com, OYO and Tiket.com.
The outcome, as it stood on 9 August 2026:
| Listings on the delisting list (about 1,367) | Number |
|---|---|
| Delisted by 1 August 2026 | 259 |
| Obtained permits | 397 |
| No longer found on the platforms | 195 |
| Still in process | 515 |
These figures are national, not Bali-only. For owners, the next step matters more. The ministry is targeting 1 June 2027 for an API verification link between government systems and the nine platforms, so that no accommodation without a valid NIB and KBLI can be marketed on them at all. If that link works as planned, licensing stops being something an owner can postpone.
Airbnb is not banned: the aim is licensing
When Bali’s governor floated the idea of a ban, the national government said it would not ban the platform, and the tourism ministry described its target as unlicensed villas rather than Airbnb itself. In May 2026 the Deputy Tourism Minister said the aim is to have owners licensed, not simply delisted, and pointed to a villa-regularisation programme running since 2025 with the Bali provincial government.
The practical message for an owner is that the door to licensing is open, and that the cost of staying outside it is rising.
The routes open to a foreign owner
Your own PT PMA
A PT PMA is an Indonesian company with foreign shareholders. It can hold the business licence and, through HGB, a right to build on the land. Under BKPM Regulation 5/2025, issued in October 2025, the minimum paid-up capital is IDR 2.5 billion, and the investment plan must exceed IDR 10 billion per five-digit business line per project location. Whether land and building costs count toward that IDR 10 billion is still an open point. The company carries licensing, tax, reporting and staffing duties, which makes it impractical for a single holiday home but the natural route for foreigners who run rental businesses.
Which accommodation KBLI codes are open to a PT PMA in Bali is not settled, so get a written opinion from Indonesian counsel on the exact code before you set up the company.
A licensed Indonesian operator
The other route is to let through an operator that holds its own licence. Here your contract with the operator, and your lease if the villa is leasehold, must allow the arrangement, and you should see the operator’s NIB, KBLI and tax number yourself, since those are the documents the ministry asks listed properties to show.
What does not work
A rental run in an Indonesian friend’s name, on land held for you by a nominee, rests on agreements that are void. Indonesian law voids agreements to hold PT shares on someone else’s behalf, with sanctions up to licence revocation, and since February 2026 Bali’s Perda 4/2026 prohibits nominee land arrangements and sanctions those who facilitate them.
Taxes on rental income
For resident landlords, rent from land and buildings is taxed at 10% final on the gross amount under PP 34/2017. For a non-resident individual without a permanent establishment, villa rent falls under Article 26 at 20% of gross, and tax treaties leave that domestic rate in place. Plan on 20% unless your adviser confirms otherwise.
Guests’ payments for villas, homestays, guest houses and homes used as hotels also carry the regional tax on accommodation services (PBJT) of up to 10% under UU 1/2022, and rental operators collect it. A licensed business also has corporate tax and reporting duties of its own. Our article on Bali property taxes and costs sets these out with the other rates.
Zoning, permits and the building
A licence for the business does not cure a problem with the land or the building. The permitted use in your lease should be consistent with the zoning and with the licences. Land in an agricultural or green zone cannot lawfully take a villa. Construction needs a building approval (PBG) before it starts, and a building needs a certificate of function (SLF) before it is used, with sanctions up to demolition for buildings without one.
Demolition is not a theoretical sanction in Bali. From 21 July 2025, Bali and Badung authorities began demolishing 48 structures at Bingin Beach in Pecatu, among them villas, homestays and restaurants, built without permits on protected or state coastal land. A business licence does not protect a building that should not have been built.
New supply is also under political pressure. A central-government moratorium on new hotels and villas in south Bali was planned in 2024, with its scope unclear at the time. In January 2025 the governor said stricter control was needed rather than a moratorium. In September 2025, after floods that killed 18 people, he announced a halt on new commercial development on productive land and water-catchment areas. Our zoning guide explains how to check a plot.
Your lease has to allow it
If the villa is leasehold, the right to rent it out comes from the lease. The rights to sublease and to assign, and the permitted use (residential or commercial rental), are among the clauses a Bali lease should cover. A lease that is silent, or that allows residential use only, leaves you exposed to the landowner as well as to the regulator. Our leasehold guide lists the clauses.
What to check before counting on rental income
A villa that is let lawfully should have a paper trail you can see before you buy, and that you will need to keep up afterwards:
- the land certificate or the notarial lease deed, with a permitted use that covers commercial rental;
- the building approval (PBG, or an older IMB still valid) and the certificate of function (SLF);
- the NIB and KBLI of whoever runs the rental, plus the NKU and NPWP the ministry asked for in 2026;
- proof that the annual land and building tax (PBB) has been paid.
Then the checks that sit around those documents:
- Who will hold the NIB and the KBLI: your PT PMA or a licensed operator. Ask to see the operator’s NIB, KBLI, NKU and NPWP.
- A written opinion from counsel on which KBLI code applies and whether it is open to foreign capital in Bali.
- The zone of the plot, the PBG and the SLF.
- Your lease: permitted use, sublease and assignment rights.
- Your tax position, including whether 10% or 20% applies to you, and who collects the PBJT.
- Any projection you are shown. No index tracks Bali villa occupancy or yields, so treat a projected yield as the seller’s estimate and nothing more.
For the full list of risks, see the risks buyers meet in Bali. You can browse our Bali listings, and our Indonesia page explains how we work.
