Rules & land · Bali

Bali says foreign firms turn real estate projects into villas

Bali officials say some foreign-owned companies obtain a real estate licence and then rent the finished homes out nightly as villas. The villa business category is closed to such companies.

News of Published in DOMA News: 2 min read

Key points

  • Firms register under KBLI 6811 but operate short-stay rentals
  • The villa category is reserved for small local businesses, not PMA
  • Checks also found unlicensed bike rentals and virtual offices

What officials found

The pattern was described by I Ketut Sukra Negara, head of Bali's DPMPTSP, the provincial investment and one-stop licensing office. He said foreign-owned companies, known as PMA, register under KBLI 6811. KBLI is Indonesia's business classification system, and code 6811 covers real estate activities.

Once construction is finished, the properties start operating as short-term rental villas. The official told detikBali that these companies convert completed real estate into villas.

Why villas are off limits for PMA

Villa accommodation is reserved for UMKM, Indonesia's micro, small and medium businesses. A foreign-owned company cannot use that code. Renting a unit nightly under a 6811 licence therefore does not match the permit that was issued.

Officials admit that monitoring businesses after a licence is granted is difficult. They now say activities must be checked against the permits behind them.

Bikes, nominees and virtual offices

On the same day detikBali published further figures from the office. No more than five PMA hold a licence for motorbike rental, yet DPMPTSP estimates that 400 to 500 such outlets operate. The official also pointed to nominee schemes, where an Indonesian citizen appears on paper while a foreigner runs the business.

Registered addresses are another issue. One unit in Negara hosted about 28 NIB business numbers, and one address along Bypass Ngurah Rai had more than 22.

Context

In the first half of 2026 Bali attracted Rp 23.77 trillion of investment against a full-year target of Rp 47.93 trillion. PMA accounted for about Rp 14.9 trillion. Hotels and restaurants led with roughly Rp 9 trillion.

What it means for investors

If you buy a villa from a PMA or through your own foreign company, compare the KBLI code on the licence with how the property is actually rented. Officials plan to check activities against permits, so a property operating under the wrong code is exposed. We verify the seller's licence and codes before a deal, and you should ask for the same in any purchase.

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Q&A

Can a PMA company legally rent out a villa nightly in Bali?

According to Bali's DPMPTSP, the villa category is reserved for small UMKM businesses and is closed to PMA. A KBLI 6811 real estate licence does not cover nightly rentals.

Source
detikBali, published October 1, 2026, language: Indonesian
Also checked: detikBali

Prepared by the DOMA editorial team from public reports, with the original source linked above. This is a news review, not legal or tax advice. Not a public offer.

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