Reviewed by Florent Delente, Founder, ILA Global Consulting. Last updated: October 2026.
A foreigner cannot legally rent out a villa to holiday guests in their own name in Bali. Short stays are an accommodation business that needs a business licence (NIB) under the right business code, and that licence cannot be issued to a foreign individual or, since May 2026, to a new foreign-owned company (PT PMA) for villa codes in Bali. Your legal options are a long-term lease to a tenant, a lease to a licensed Indonesian operator, or operating through a company that already held the right licence before May 2026. Since 1 August 2026, booking platforms have been removing accommodation that cannot show a valid NIB and matching business code.
This guide is for foreigners who hold a leasehold villa or are thinking of buying one to rent out, and for owners whose villa is already on Airbnb or Booking.com and want to know where they stand. It replaces two older ILA articles that are no longer accurate. If you want a review of your villa’s licences, building permits and tax position, ILA’s villa licensing team audits what the property has and what it is missing. Dollar figures use IDR 17,900 per USD (Katadata, 5 October 2026) and are approximate.
What changed for villa rentals in Bali in 2025 and 2026?
More than in the previous ten years. The national government, the province and the platforms all moved at once.
| Date | What happened | Source |
|---|---|---|
| 31 March 2025 | Ministry of Tourism starts collecting hosts’ NIB data through the online travel agents (OTAs) | Freaking Nomads |
| 3 December 2025 | Governor Wayan Koster tells the hotel association he will restrict Airbnb-type rentals and enforce existing rules more strictly | Emerhub |
| 28 January 2026 | The governor asks the Investment Minister to close low risk business codes to foreign companies in Bali, naming real estate rental (68111) among the most abused codes | Emerhub |
| 12 February 2026 | Koster meets Airbnb in Denpasar and asks it to remove illegal accommodation; Airbnb commits to follow Bali’s rules | ANTARA Bali |
| From 22 February 2026 | Airbnb asks Indonesian hosts for their NIB and business code | House of Reservations |
| Third week of May 2026 | OSS stops issuing new licences to PT PMAs in Bali for 18 codes, including villas (55900), small hotels (55110, 55120) and real estate rental (68111) | ANTARA |
| 26 May 2026 | Ministry of Tourism: OTAs may not onboard new hosts without a valid NIB and matching code; about 1,600 unlicensed properties to be delisted | ANTARA Jogja |
| 1 August 2026 | Deadline: unlicensed accommodation is removed from OTAs | ANTARA Jogja |
| June 2027 (planned) | An API linking OTAs to OSS checks every listing’s NIB, business code and registration automatically | ANTARA Jogja |
The message from the Deputy Minister of Tourism at the Bali and Beyond Travel Fair in May 2026 was that the aim is legalisation, not closure: OTAs should make sure their hosts are licensed rather than simply delete them (ANTARA Bali, 31 May 2026). In practice that means one thing for owners: from now on, a listing without an NIB will not stay online for long.
Can a foreigner rent out a villa in Bali in their own name?
For holiday rentals, no. For a long-term tenant, sometimes.
Short stays (nightly or weekly) are a business. Running accommodation needs an NIB issued through OSS (Online Single Submission), under a business code (KBLI) that covers accommodation. OSS issues an individual NIB to Indonesian citizens on the basis of their national ID number; a foreign individual cannot hold one. Running a rental yourself also counts as work, and a foreigner working without the right stay permit risks deportation under the Immigration Law (Law 6/2011). Immigration has acted on villa cases: in August 2026 an Australian on a visa on arrival was deported from Buleleng for running a paid retreat at a villa (Tirto, 6 August 2026).
Long-term rental is a lease, not accommodation. Letting a villa for a month or more to one tenant is a lease of land and buildings. It is outside the hotel tax (DDTC) and taxed as rental income. If you hold the villa on a leasehold, you can sublet only if your lease with the landowner allows it, and many Bali leases require the landowner’s written consent.
A Hak Pakai house is for living in. The right of use title available to foreigners with a stay permit is granted for a residence. Using it as a holiday rental needs an accommodation licence you cannot hold, and may conflict with the residential purpose of the title. Our guide to buying property in Bali explains the title.
Which business licence does a villa rental need?
The licence is the NIB plus, depending on risk level, a standard certificate, under the business code that matches what you do. The codes that matter for villas in October 2026:
| KBLI | Activity | Who can hold it | New PT PMA in Bali |
|---|---|---|---|
| 55130 | Pondok wisata (homestay in a lived-in house) | Reserved for micro and small businesses and cooperatives; in practice an Indonesian owner who lives there | Not available to a PT PMA anywhere |
| 55193 | Villa | Reserved for micro and small businesses and cooperatives | Not available to a PT PMA anywhere |
| 55900 | Other accommodation | Open to foreign investment nationally | Closed since May 2026 |
| 55110, 55120 | Star and non-star hotels, building under 6,000 m2 | Open nationally | Closed since May 2026 |
| 55110, 55120 | Hotels, building of 6,000 m2 or more | Open | Still open, with large capital and environmental approval |
| 68111 | Real estate owned or leased (renting out property) | Open nationally | Closed since May 2026 |
| 68200 | Real estate services on a fee basis (property management, brokerage) | Open | Not on the 18 list |
Sources: Perpres 49/2021, Annex II (pondok wisata and villa are listed under item 48, lodging services, among activities allocated to cooperatives and micro and small businesses); kbli.co.id on 55193 and 55900; ANTARA and Periskop for the Bali closure.
This is why the old “set up a PT PMA and rent out your villa” advice no longer works in Bali. Before May 2026, foreign companies used 55900 or 68111, because 55130 and 55193 were never open to them. Both are now closed to new PT PMAs on the island. Companies already licensed keep their licences, must keep filing their quarterly investment reports (LKPM), and face provincial audits of permits, location and investment value (Periskop). Our PT PMA setup guide covers the closure in detail.
Beyond the NIB, a legal rental villa needs:
- Zoning that allows tourism accommodation. Properties outside a tourism-compatible zone cannot be licensed for daily rental, whatever the code (Emerhub).
- A building approval (PBG) and certificate of fitness (SLF) for accommodation use, not just a house. A PBG issued for a private residence does not cover a rental business (PP 16/2021). ILA’s PBG and SLF service regularises existing villas where the zoning allows.
- Registration for the regional hotel tax (NPWPD) with the regency revenue office.
- For an alcohol minibar or bar, a separate alcohol licence (alcohol licence service).
What are your legal options in 2026?
| Option | How it works | Legal in Bali in 2026? | Tax on your side | Main risk |
|---|---|---|---|---|
| Long-term lease to a tenant | You let the villa for months or years to one tenant | Yes, if your head lease allows subletting | 10% final income tax on gross rent | Tenant default; head lease limits |
| Lease to a licensed operator | An Indonesian operator (company or individual with the right code) leases the villa from you and runs it as accommodation | Yes, if the operator is genuine and licensed | 10% final on the rent you receive | Operator’s solvency and conduct; if you control the business in practice, it starts to look like a nominee |
| Existing PT PMA licensed before May 2026 | Your company already holds 55900 or 68111 and keeps operating | Yes, while the licence stays valid and compliant | 22% corporate tax on profit, plus dividend withholding | Audits, no new codes, capital and LKPM compliance |
| Buy a PT PMA that holds a villa licence | Share purchase of an existing licensed company | Possibly | As above | Hidden liabilities; whether OSS accepts the change |
| Large hotel PT PMA (6,000 m2 or more) | A real hotel project | Yes | Corporate | Scale and capital; not a single-villa solution |
| Management agreement only | A manager markets and runs your villa, but the licence is in nobody’s name or in yours | No: the operator of record must hold the NIB | Exposed to back tax | Delisting, PBJT assessments, deportation if you work |
| Nominee or “borrowed” licence | An Indonesian holds the licence or shares “for you” | No: void under Article 33 of the Investment Law | Exposed | You can lose the business and the income |
Source for nominee arrangements: Law 25/2007, Art. 33.
The licensed operator route in practice. Most compliant foreign owners in Bali now sign a lease with an operator that holds the accommodation licence in its own name. The operator lists the villa under its NIB, collects the hotel tax and pays you a fixed rent or a minimum rent. Three points decide whether it is safe:
- The NIB, code and building permits belong to the operator and cover your villa. OTAs now ask for the NIB of the entity that operates the property, and a management company’s NIB is not expected to cover listings in an individual owner’s name (House of Reservations).
- The rent is real. A lease where the operator pays you “100% of revenue minus a fee” and you take every decision is a management contract in disguise. Tax and licensing authorities look at substance.
- Your head lease allows it. If you hold the villa on leasehold, the landowner’s consent to sublet to an operator should be in writing.
Before signing with any operator, check its company profile, licences and court record; our guide to checking an Indonesian company shows how.
How are villa rentals taxed?
There are two different 10% taxes, and older articles (ours included) mixed them up.
| Tax | Applies to | Rate | Who pays it | Basis |
|---|---|---|---|---|
| Hotel tax (PBJT on hotel services) | Short stays under one month in villas, pondok wisata, guesthouses, and private homes used as hotels | Up to 10% of the room price | The guest; the operator collects and pays the regency | UU 1/2022 (HKPD); DDTC |
| VAT | Hotel services that are a regional tax object | Not charged | n/a | UU HPP, Art. 4A(3) |
| Final income tax on rent (PPh 4(2)) | Rent from leasing land or buildings, including a lease to an operator or a long-term tenant | 10% of gross rent, final | The landlord; withheld by a corporate tenant | PP 34/2017 via DDTC; PwC |
| Rent paid to a non-resident landlord | Owners who are not Indonesian tax residents | 10% final or 20% under Article 26: contested | Withheld by the tenant | Ortax, 19 June 2026; IKPI, 24 July 2026 |
| Corporate income tax | Profit of a licensed operating company | 22%, with a discount for smaller companies | The company | PwC |
| Dividends | Profit paid out by a PT PMA | 20% to a non-resident shareholder, or the treaty rate; 10% final to a resident individual | Withheld by the company | PwC |
A few things the table does not show:
- Rentals of one month or more are outside the hotel tax. The HKPD law treats houses, apartments and condominiums rented for more than a month as leases, not hotel services (DDTC).
- Each regency sets its own rate and rules within the 10% cap. Badung amended its regional tax regulation (Perda 7/2023) with Perda 8/2025, in force since 1 January 2026 (Pasal.id).
- The non-resident question is open. Our property tax guide sets out both views. If you live abroad and lease your villa to an Indonesian operator, agree the withholding rate in writing.
- Dividends to resident individuals can be exempt when reinvested in Indonesia under conditions set by the Harmonised Tax Law.
Worked example: lease to an operator. You hold a 25-year leasehold on a three-bedroom villa in Canggu and lease it to a licensed operator for IDR 420,000,000 a year (about USD 23,460). The operator, a company, withholds 10% (IDR 42,000,000) and pays it to the state, and you receive IDR 378,000,000. If you are a non-resident, the operator may withhold 20% (IDR 84,000,000) instead, unless you agree otherwise on a documented basis. The guests pay the operator’s room price plus up to 10% hotel tax, which is the operator’s business, not yours.
Reality check on returns. Non-star hotels and other lodging in Bali averaged 43.16% occupancy in August 2026, against 68.19% for star hotels (BPS Bali). The “15% net yield” figures in sales brochures do not match official data. Model your numbers on a fixed operator rent or on realistic occupancy.
What do Airbnb and Booking.com now require from hosts?
Under the Ministry of Tourism’s policy:
- A valid NIB with a business code that matches accommodation. OTAs check it against OSS, and since 26 May 2026 they may not onboard new hosts without one (ANTARA Jogja).
- The NIB of the operator. It should belong to the legal entity that runs the property (House of Reservations).
- A business activity number (NKU), one of the three data fields in the planned OSS verification system, with NIB and KBLI (ANTARA Jogja).
- Tax. The governor has asked platforms to promote only villas that are licensed and pay tax, and to help collect the IDR 150,000 foreign tourist levy (ANTARA Bali). See our Bali tourist tax guide.
The OTAs themselves must hold a business licence in Indonesia under KBLI 55400 and, according to reporting on the government’s plans, have a local office (Inikata, 31 May 2026).
What happens if you keep renting without a licence?
The risks stack up, and they are no longer theoretical:
- Delisting. Unlicensed properties have been removed from OTAs since 1 August 2026, and the June 2027 API will block them automatically.
- Back taxes. The regency can assess unpaid hotel tax with penalties, and the tax office can assess income tax on undeclared rental income.
- Immigration. A foreigner who manages bookings, guests or staff without a work-based KITAS is working illegally. Bali’s immigration offices reported 342 deportations of foreigners for various violations in a July 2026 update (RRI, 5 July 2026).
- Provincial audits. Bali investigated 426 foreign investment companies in 2025 and 2026 and sanctioned 423, including for missing building permits and closed activities (Emerhub).
- Nominee exposure. If an Indonesian “holds” your licence or shares, you have no enforceable rights, and the relationship can end with you losing access to your own villa.
How do you make an existing villa compliant?
- Read your lease. Check the term, the extension clause, subletting and commercial use rights, and the landowner’s consent requirements.
- Check the zoning and building file. Is the plot in a zone that allows accommodation? Is there a PBG and SLF for accommodation use? If not, can it be regularised?
- Choose the structure. Long-term tenant, licensed operator, or your existing licensed company. A new PT PMA for a single villa is not available under the Bali closure.
- Vet the operator. Company profile, NIB and code, building permits, tax status, court record, references from other owners.
- Sign a proper lease. Bilingual, with the rent, withholding tax rate, maintenance, insurance, damage, early termination, and what happens to bookings if the operator’s licence lapses.
- Register taxes. The operator registers for hotel tax; you report the rental income and keep the withholding slips.
- Clean up your listings. Remove any listing in your own name, or move it to the operator’s account and NIB.
ILA’s villa licensing service handles steps 1, 2 and 6, our contracts team drafts the operator lease, and our due diligence team vets the operator.
Get your villa on the right side of the 2026 rules
Bali still has demand for well-run villas, but the shortcut era is over: the province, the Ministry of Tourism and the platforms now check the same licence data. ILA reviews your lease, title, zoning, building permits and tax position, then sets up the structure that lets your villa earn legally. Contact our team in English, French or Indonesian.
Want this guide offline? Get the free PDF version, or browse all 27 free ILA guides.
Frequently asked questions
Can foreigners rent out property in Bali?
Yes for long-term leases, if your own lease allows subletting, with 10% final tax on the rent. For holiday rentals, the licence must be held by an entity that can get it: a licensed Indonesian operator, or a PT PMA that held a villa or real estate licence before May 2026.
Can I put my Bali villa on Airbnb as a foreigner?
Not in your own name. Since 1 August 2026, OTAs remove listings without a valid NIB and matching accommodation code, and a foreign individual cannot hold an NIB. Lease the villa to a licensed operator who lists it under its own licence.
Can I set up a PT PMA to rent out my villa in Bali?
Not a new one. Bali closed villa accommodation (55900), real estate rental (68111) and small hotel codes to new PT PMAs in May 2026. The pondok wisata and villa codes (55130, 55193) were never open to foreign companies.
What is a pondok wisata licence?
A homestay licence under KBLI 55130 for rooms let in a house the owner lives in. It is reserved for micro and small businesses and cooperatives, so in practice it is held by Indonesian owners, not foreigners.
What taxes apply to villa rentals in Bali?
Short stays: hotel tax (PBJT) of up to 10% paid by guests through the operator, no VAT, and income tax on the operator’s profit. Leases and long-term rentals: 10% final income tax on gross rent, possibly 20% for non-resident landlords.
What happens to unlicensed villas on Booking.com and Airbnb?
They are delisted. The Ministry of Tourism set 1 August 2026 as the deadline and plans an automatic OSS check for all listings from June 2027.
I already have a PT PMA with a villa licence. Is it still valid?
Yes, licences issued before May 2026 were not revoked. Keep the company compliant (LKPM every quarter, tax filings, building permits), because the province is auditing foreign companies that hold closed codes.
Sources
- ANTARA Jogja: Ministry of Tourism acts against 1,600 unlicensed accommodations on OTAs from August 2026 (27 May 2026)
- ANTARA Bali: Deputy Minister on enforcement against illegal OTA accommodation (31 May 2026)
- ANTARA Bali: Governor asks Airbnb to remove illegal accommodation (12 February 2026)
- ANTARA: Bali blocks foreign investment in 18 business categories (23 July 2026)
- Periskop: Bali closes PMA access in 18 business fields (23 July 2026)
- Emerhub: Bali closes low and medium-low risk PMA licensing in OSS (18 May 2026)
- Emerhub: Bali governor proposes ban on short-term rentals (7 December 2025, updated 20 June 2026)
- Freaking Nomads: Indonesia to delist unlicensed stays from August 2026
- House of Reservations: New Airbnb and Booking.com rules for Bali villa owners (updated 24 February 2026)
- Inikata: Government to regulate foreign OTAs without an Indonesian office (31 May 2026)
- Perpres 49/2021 amending the Positive Investment List (Annex II), JDIH BPK
- kbli.co.id: KBLI 55193 Villa and KBLI 55900 Other accommodation
- Law 25/2007 on Investment, JDIH BPK
- Law 6/2011 on Immigration, JDIH BPK
- PP 16/2021 on Buildings (PBG and SLF), JDIH BPK
- Law 1/2022 on Central and Regional Financial Relations (UU HKPD), JDIH BPK
- DDTC: UU HKPD rules on hotel services tax
- CNN Indonesia: Goods and services not subject to VAT under UU HPP
- Pasal.id: Badung Perda 8/2025 amending Perda 7/2023 on regional taxes
- DDTC: Tax on leasing land and buildings (PP 34/2017)
- Ortax: Villa rent received by non-residents, PPh 4(2) or PPh 26 (19 June 2026)
- IKPI: AOTCA President on non-resident property rent (24 July 2026)
- PwC Worldwide Tax Summaries: Indonesia withholding taxes (reviewed 11 June 2026)
- PwC Worldwide Tax Summaries: Indonesia corporate income tax
- BPS Bali: Tourism in Bali, August 2026
- Tirto: Australian deported for illegal yoga retreat at a Bali villa (6 August 2026)
- RRI: 342 foreigners deported in Bali (5 July 2026)
- Katadata: Rupiah at IDR 17,916 per USD (5 October 2026)
