Renting out property in Bali and Lombok remains one of the most attractive investment strategies for foreign investors. However, operating a short-term rental in Indonesia requires compliance with zoning regulations, tourism licensing, and corporate structures that determine if a property can legally be listed on platforms such as Airbnb and Booking.com.
In 2026, the Indonesian government began enforcing existing regulations more strictly, particularly through cooperation with Online Travel Agencies (OTAs). Listings that do not meet licensing and verification requirements risk being removed from these platforms starting March 31, 2026.
For years, some parts of the market had little oversight. Developers sometimes built villas without the right permits or listed them on short-term rental sites without the required business classifications and tax registrations.
This new enforcement ends that period of uncertainty. Now, property owners and investors need to ensure that their zoning, company structure, KBLI classification, and tax registrations comply with Indonesian regulations to continue renting out their property legally.
This article will explain how the rules work in 2026 and describe the two main situations villa owners may face, based on their property’s zoning status.
Option 1: The Villa Is Located in a Pink Zone (Tourism Zone)
For villa owners whose property is located in a Pink Zone (Tourism Zone), short-term rental operations are generally permitted.
Owners can rent their property on Airbnb and other platforms by establishing a PT PMA with a KBLI classification related to short-term accommodation.
A PT PMA with KBLI 55110 (Hotel) or Apartment Hotel classification can upload its NIB (Business Identification Number) to OTA platforms to obtain approval for listings.
If the PT PMA does not yet hold the correct KBLI, the company can amend its NIB registration and add the operating address of the villa or villa complex under the appropriate KBLI category.
Previously, these KBLI codes were limited to developments exceeding 4,000 square meters, but regulatory adjustments now allow PT PMA companies to operate with these classifications under broader construction scenarios.
Villa owners must also obtain or update their NPWPD (Local Tax Identification Number) in order to declare and pay local accommodation taxes.
| Term | Definition |
|---|---|
| Pink Zone (Tourism Zone) | A zoning classification where tourism accommodation activities, such as villa rentals, are generally permitted under Indonesian spatial planning regulations. |
| KBLI (Business Classification Code) | Indonesia’s official classification system defines business activity categories and determines licensing and regulatory obligations. |
| KBLI 55110 | A hospitality classification covering hotel and apartment hotel operations commonly used for licensed short-term accommodation businesses. |
| NIB (Business Identification Number) | The primary business registration number issued through the OSS system confirms a company’s legal operating status. |
| NPWPD (Local Tax Identification Number) | A regional tax registration required for businesses collecting and reporting local accommodation or tourism taxes. |
Option 2: The Villa Is Located in a Yellow or Mixed Zone
Properties located in Yellow Zones (Residential or Mixed Zones) face more complex regulatory constraints.
Yellow Zones restrict the KBLI codes typically used by PT PMA companies for accommodation on platforms such as Airbnb or Booking.com. The classification generally permitted in these areas is Pondok Wisata.
Three possible scenarios exist for villa owners operating in Yellow Zones:
- Switching to long-term rental models (monthly or yearly), which residential zones allow
- Transferring the property structure to a local landowner’s name, which most experts consider less secure for foreign investors
- Establishing a PT PMDN (local company) to operate the short-term rental activity
Foreign investors often prefer the third option because it allows them to retain operational oversight while complying with zoning regulations.
| Term | Definition |
|---|---|
| Yellow Zone (Residential or Mixed Zone) | A zoning classification primarily designated for residential use, where short-term accommodation activities are more restricted. |
| Pondok Wisata | A government-recognized accommodation category commonly used for small-scale guesthouses or homestays in residential areas. |
| Long-Term Rental | A leasing arrangement structured on monthly or yearly contracts, generally permitted in residential zoning areas. |
How Does a PT PMDN Structure Work for Yellow Zone Rentals?
To transfer funds from the PMDN without issuing dividends to shareholders, the PMA can invoice the local company for marketing and consulting services.
This structure is required for yellow zone developments if the villa owner wishes to continue renting and maintain control of the property.
The NPWPD tax card will be registered under the company name, and the owner will retain full ownership of the property. This model ensures NIB compliance and proper tax payment, and allows the foreign owner to receive legal rental income through the PMA and the local company.
What Is a PT PMDN (Local Company)?
A PT PMDN is structurally similar to a PT PMA, except that all shareholders must be Indonesian citizens.
Foreigners cannot hold shares in a PT PMDN. However, they may serve as the company’s Director or Commissioner.
A PT PMDN generally requires a minimum paid-up capital starting at IDR 51 million, which may increase to approximately IDR 1 billion if a foreign director is appointed.
One advantage of a PT PMDN structure is that it allows a broader range of business activities without some of the restrictions imposed on foreign-owned companies.
Investors commonly use local companies not only for property-related activities but also for businesses such as tattoo studios, barbershops, small restaurants, and other sectors restricted to foreign shareholders.
| Term | Definition |
|---|---|
| Local Shareholder Requirement | A legal requirement that all shareholders in a PT PMDN must be Indonesian citizens. |
| Foreign Director Appointment | A governance structure allowing foreign nationals to serve as directors or commissioners without holding shares. |
| Paid-Up Capital Requirement | The minimum capital contribution required to establish a PT PMDN typically starts at around IDR 51 million and may be higher depending on the operational structure. |
How Can Foreign Investors Protect Their Interests in a PT PMDN?
Foreign investors often use protective structures when working with a PT PMDN. These may include:
- Shareholder agreements with local partners
- Appointing the foreign investor as a director
- Setting up royalty or service fee arrangements
- Invoicing a PT PMA company for marketing, rent, or consulting services.
These mechanisms allow the foreign investor to maintain operational control and receive revenue from the business while remaining compliant with Indonesian corporate regulations.
The 2026 enforcement framework for short-term rentals marks a major shift for property owners in Bali and Lombok. Compliance now requires correct zoning, appropriate KBLI classifications, valid building permits, and properly structured corporate entities.
ILA Global Consulting assists property investors with PT PMA and PT PMDN structuring, KBLI registration, OSS licensing, NPWPD tax registration, and OTA compliance, ensuring villas can be legally rented on Airbnb, Booking.com, and other platforms.
Contact ILA Global Consulting to review your property structure and ensure your villa remains fully compliant for short-term rentals in Indonesia in 2026.
