Can foreigners rent out villas in Bali?<\/b><\/h3>\n

The villa rental classification is not in the Negative Investment List (DNI) in Indonesia. However, due to local regulations in Bali, it\u2019s impossible to get the local operational licenses which you will need to operate legally.<\/p>\n

In other words, as a foreigner, you cannot rent out your villa in Bali using a foreign-owned company.<\/p>\n

However, the\u00a0solution to the foreign ownership restriction is to\u00a0<\/b>set up a local\u00a0<\/b>nominee company in Bali<\/b>\u00a0under the \u201cvilla\u201d business classification.<\/p>\n

The importance of the building permit<\/b><\/h3>\n

Make sure the villa you are purchasing has the correct building permit (IMB) or obtain it before the beginning of the construction as this is the\u00a0document that defines the legal use of the building<\/b>.<\/p>\n

However, it often happens that villa owners realize too late that their properties do not have the necessary building documentation.<\/p>\n

If you find out that your villa IMB is different than what you need, don\u2019t worry. It is still possible to make the necessary changes.<\/p>\n

Also,\u00a0whether you can operate a homestay, villa, or a hotel depends on the IMB of the building or the plan of how it is going to look like.<\/p>\n

If you decide to build a villa, conduct thorough research on land acquisition and the types of land certificates.<\/p>\n

Requirements for villas in Bali<\/b><\/h3>\n

If you decide to invest in a villa in Bali, keep in mind that the minimum land size for a villa is detailed in the Izin Tata Ruang, which can be translated as zoning specifications.<\/p>\n

ITR details if the area is opened to residential, tourism activities, office, factory, green zone…<\/p>\n

Alternative business classifications for villa rental in Bali<\/b><\/h3>\n

There are also alternative business classifications if your property does not have the IMB with the function \u201cvilla.\u201d<\/p>\n

Hospitality management consultation<\/b><\/h3>\n

You can use the hospitality management consultation classification for\u00a0managing accommodation businesses<\/b>. It allows 100% foreign ownership and includes activities of tourism consultants, such as:<\/p>\n

\n
• Provision of views<\/li>\n
• Advice<\/li>\n
• Preparation of feasibility studies<\/li>\n
• Planning<\/li>\n
• Monitoring<\/li>\n
• Management<\/b><\/li>\n
• Research in the field of tourism<\/li>\n<\/ul>\n

  One of the main benefits of this classification is that it\u00a0allows the administration of different accommodations\u00a0<\/b>in different locations. Whereas, for example, to operate a villa, the company must be registered where the villa is located.<\/p>\n

  Real estate classification<\/b><\/h3>\n

  Foreign investors can also set up fully foreign-owned real estate businesses in Indonesia. However, if you are planning to rent out your villa under the real estate classification, you are\u00a0only allowed to offer long-term rentals<\/b>, but not to rent out your villa to tourists on a daily basis.<\/p>\n

  The real estate classification is suitable for you is you plan on living in your villa for half a year and lease it out for the rest of the year.<\/p>\n

  Having a virtual office also means that you can register the company before buying the property. Consequently, you can acquire the property under the name of the company.<\/p>\n

  Other types of accommodation businesses in Bali<\/b><\/h3>\n

  #1 Running a homestay (<\/b>Pondok Wisata)<\/i><\/b><\/h4>\n

  It is also possible for a foreign investor to run a homestay (Pondok Wisata<\/i>) in Bali. You can set up a\u00a0wholly foreign-owned company in Indonesia\u00a0(PT PMA) for acquiring land in Bali and manage the Pondok Wisata with a PMA or a PT under the hospitality management consultation classification.<\/p>\n

  However, as\u00a0Pondok Wisata<\/i>\u00a0can only be under the name of an Indonesian individual, the licenses of a Pondok Wisata are processed in the name of an Indonesian, usually the (former) landowner.<\/p>\n

  The person subject to the accommodation tax is the owner of the Pondok Wisata. It is common practice that the owner of the homestay and the PMA make a management agreement. In the agreement, they state that the PMA pays the accommodation tax on behalf of the Pondok Wisata\u2019s owner.<\/p>\n

  The general requirements for a homestay in Bali are:<\/p>\n

  \n
  • Up to 5 rooms (suitable for small buildings)<\/li>\n
  • Maximum room size 32m2<\/li>\n
  • Maximum 2 floors<\/li>\n
  • Building coverage ratio 50%<\/li>\n
  • Possible facilities: pool, kitchen, living room, family room, up to 5 bedrooms<\/li>\n<\/ul>\n

    #2 Setting up a hotel in Bali<\/b><\/h4>\n

    The registration of hotels in Bali is quite complex. This business classification is mainly suitable for big hotels located in large tourist areas.<\/p>\n

    While there are no restrictions on the dimensions of the building and the number of rooms,\u00a0 the minimum land areas must be:<\/p>\n

    \n
    • 75 are (7,500m2) in North Kuta<\/li>\n
    • 50 are (5,000m2) in Kuta<\/li>\n<\/ul>\n

      If the land area of your hotel exceeds 1 ha, you will also need a classification from the Indonesia Hotels and Restaurants Association (PHRI).<\/p>\n

      Keep in mind that\u00a0all accommodation businesses in Bali must be located<\/b>\u00a0only in tourist areas<\/b>\u00a0and you cannot operate as an accommodation business if the building is in a residential area.<\/p>\n

      However, in such case, you can register your business in the real estate classification and provide long-term leases. This company can be both foreign or local.<\/p>\n<\/div>\n

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      [vc_row][vc_column][vc_column_text] Ready to start renting out a villa in Bali? At Bali Icon Property, we owe the licences for managing and renting your property: legal, hassle-free, reliable… It is our business! [\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/2″][vc_column_text] Customised Distribution We work with \u00a0online and offline distribution partners . We constantly follow-up the market trend in order to be aware …<\/p>\n","protected":false},"author":2,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"class_list":["post-27359","page","type-page","status-publish","hentry"],"acf":[],"yoast_head":"\n