Bali Flags Alleged Real-Estate Licensing Workaround in Sarbagita

Denpasar — Bali officials publicly raised an alleged licensing workaround on Oct. 1, 2026, involving a foreign-investment company that reportedly obtained approval for real-estate development, converted completed buildings into villas and rented them to tourists by the day.

The change comes as investment in Bali remains heavily concentrated in Sarbagita — Denpasar, Badung, Gianyar and Tabanan. Reports citing Bali officials said the area accounted for about 93 percent of investment, while the remainder was outside Sarbagita.

The alleged practice concerns a mismatch between a company’s registered business classification and the activity carried out after construction. A company licensed under KBLI 6811 for real-estate development was reported to have used finished buildings as villas for daily accommodation. KBLI is Indonesia’s standard business-classification system used in licensing.

Why the alleged workaround matters to foreign residents and visitors

For a foreign resident or visitor, the issue is whether a property presented as a villa is operating under approvals that cover daily accommodation, rather than only real-estate development. Those categories can involve different licensing requirements and regulatory obligations.

The reports said Bali’s rules do not allow foreign-investment companies to use the villa classification for foreign investment. That makes the distinction between construction, property development and accommodation operations significant for businesses serving short-term guests.

The reported investment total attributed to foreign investment was around Rp 14.9 trillion (about US$940 million). Officials’ concern was not simply that buildings had been completed, but that their subsequent use and daily rental activity might not match the permits held by the company.

Separate reports on Bali’s investment distribution identified Sarbagita as the province’s dominant investment zone. One report put Sarbagita’s share at 93 percent and described the four areas as Denpasar, Badung, Gianyar and Tabanan. The concentration has made oversight of property, villas and related investment activity a continuing concern.

Authorities would need to establish whether a change from real-estate development to villa accommodation had fulfilled all applicable licensing requirements. The item did not state a final enforcement outcome.

Sources

• detikBali — regional news report
• NusaBali — regional news report on Bali investment
• Bali Post — regional news report on Bali investment