For many foreign investors, the allure of Bali lies in the perception of a relaxed, “anything goes” atmosphere where rules are mere suggestions. This mindset often extends to construction, where the pressure to “gas build” and generate revenue quickly leads many to bypass formal licensing.
However, in 2026, the regulatory landscape has hardened significantly. The days when a simple handshake or a basic NIB (Business Identification Number) was enough to pour concrete are over.
Today, proceeding without a valid permit is not just an administrative oversight; it is a high-stakes gamble that can result in project sealing, forced demolition, and even criminal liability.
The shift is driven by the strict enforcement of Government Regulation (PP) No. 16 of 2021, which replaced the old IMB with the PBG (Persetujuan Bangunan Gedung) and SLF (Sertifikat Laik Fungsi). This isn’t just a change in acronyms; it represents a fundamental tightening of the legal framework.
Authorities in hotspots like Badung and Kuta Utara are actively inspecting and sealing hundreds of non-compliant villas.
The widespread misconception that having a land certificate and a company deed is sufficient has trapped countless investors in legal nightmares, turning dream projects into “dead capital” that cannot be legally operated or sold.
To navigate this new reality, understanding the mandatory nature of the PBG and SLF is essential. This guide breaks down the legal basis of Indonesia’s building regime, the escalating ladder of sanctions you face for non-compliance, and the practical steps to secure your investment.
Whether you are building a private villa or a commercial resort, aligning with the regulations on building standards is the only way to ensure your property remains a valuable asset rather than a liability awaiting a demolition order.
Table of Contents
- The Legal Reality: PBG Replaces IMB in Bali
- The Sanction Ladder: From Warning to Demolition
- Bali Enforcement: Why NIB Is Not Enough
- Eligibility and Requirements for PBG
- Step‑by‑Step Guide to Obtaining Your Permit
- Key Risks and Criminal Liability for Owners
- Real Story: The "Gas Build" Trap in Pererenan, Bali
- Last-Minute Checklist for Property Owners
- FAQs about Building Permit in Bali
The Legal Reality: PBG Replaces IMB in Bali
Indonesia’s building regime underwent a massive overhaul with the introduction of the Omnibus Law, specifically detailed in PP No. 16 Tahun 2021. This regulation formally replaced the legacy Izin Mendirikan Bangunan (IMB) with the building permit Bali Indonesia known as PBG (Persetujuan Bangunan Gedung).
The PBG is defined as the approval granted to a building owner to construct, alter, expand, or maintain a building in accordance with technical standards.
Crucially, the law states that no building function is exempt. Whether you are constructing a private residence, a commercial villa, or a social facility, the requirement is absolute.
Furthermore, for buildings already in use, owners must obtain an SLF (Sertifikat Laik Fungsi), which certifies that the structure is safe and fit for purpose. Possessing a PBG allows you to build, but only the SLF allows you to legally occupy and operate.
Ignoring this duality is a common error that leaves operational businesses vulnerable to sudden closure.
The Sanction Ladder: From Warning to Demolition
The enforcement of building regulations is structured as a formal escalation ladder. It begins with a written warning (peringatan tertulis), typically issued when a site inspection reveals construction activity without a displayed PBG board.
If this warning is ignored, authorities move to the limitation of construction activities, followed by a temporary or permanent suspension of work. This is often where investors first encounter the dreaded “Pol PP Line” (police line) sealing their site.
If non-compliance continues, the sanctions become severe. The government can freeze or revoke existing approvals and, ultimately, issue an order to demolish the building (perintah pembongkaran).
This is not a theoretical risk; it is the statutory endgame for buildings that cannot be brought into compliance with spatial plans. The financial loss in such scenarios is total, as there is no compensation for illegal structures removed by the state.
Bali Enforcement: Why NIB Is Not Enough
A dangerous myth circulating in expat communities is that obtaining an NIB (Business Identification Number) through the OSS system constitutes a “permit to build.” This is factually incorrect and legally perilous.
In 2025 alone, Satpol PP (Public Order Enforcers) in Badung Regency recorded nearly 200 violations, the vast majority of which were projects that had “gas built” relying solely on an NIB and basic spatial confirmation (KKPR).
The enforcement reality is visible across Kuta Utara, Mengwi, and Abiansemal. Authorities are conducting routine patrols and responding to community reports. A high-profile case involved the sealing of a 70-villa project in Kerobokan because the developers assumed their business license covered construction rights. It did not.
The PBG is a distinct technical document; without it, any construction activity is considered a violation of public order, triggering immediate work stoppages.
Eligibility and Requirements for PBG
Every entity undertaking construction must secure a PBG. This applies equally to individual owners, foreign-owned companies (PT PMA), and local corporate bodies. The requirement triggers not just for new builds, but also for expansions, alterations, or changes in function—for example, converting a residential house into a commercial rental villa.
The application requires a comprehensive set of documents. Firstly, you need proof of land ownership (Right to Build or Freehold certificate). Secondly, you must have zoning confirmation (KKPR) ensuring your intended use matches the spatial plan.
Finally, you need detailed technical drawings, including architectural, structural, and utility plans (MEP), prepared by a certified architect. The rigorous nature of these requirements ensures that only buildings meeting safety and environmental standards are approved.
Step‑by‑Step Guide to Obtaining Your Permit
Navigating the bureaucracy can be daunting, but the process is structured. It begins with document preparation, where your architect finalizes the technical drawings and calculates the building’s reliability structure. These are then submitted through the local Ministry of Public Works (PUPR) system or the integrated OSS.
- Submission: Upload land proofs, zoning compliance, and technical plans.
- Technical Review: A crucial phase where the Tim Profesi Ahli (Expert Team) reviews your design for safety, fire access, and drainage.
- Retribution Payment: Once approved technically, you pay the official regional retribution fee.
- Issuance: The PBG is legally issued, allowing you to break ground.
- Inspection & SLF: Upon completion, the building is inspected. If it matches the PBG, the SLF is issued for operation.
Key Risks and Criminal Liability for Owners
Beyond administrative sanctions, the Building Law carries significant criminal exposure. If a building collapses or causes harm due to a lack of proper permits and technical compliance, the owner faces imprisonment.
The law stipulates up to 3 years in prison if the failure causes property loss, 4 years for causing permanent disability, and up to 5 years for causing death.
This criminal liability underscores why the PBG is non-negotiable. It is your legal shield. In the event of a disaster or accident, holding a valid PBG and SLF demonstrates that you adhered to safety standards.
Without them, you are presumptively negligent. For foreign investors, a criminal case also means potential deportation and blacklisting, compounding the financial disaster.
Real Story: The "Gas Build" Trap in Pererenan, Bali
Thomas (42, UK) was in a hurry. He wanted his Pererenan villa open for the high season, so when his contractor suggested they “gas build” using just an NIB, he agreed. It seemed efficient. He poured the foundation while his neighbors were still doing paperwork.
But speed has a price. Two months in, a Satpol PP patrol didn’t just stop by for coffee; they arrived with yellow tape. Thomas’s project was sealed for lack of a PBG. His race to the finish line ended with a stop-work order that froze his capital for six months.
Panic set in. The “later” negotiation option didn’t exist. He was facing a daily fine and a potential demolition order for the structures already built in the setback zone. That’s when he reached out to our team to intervene.
We halted the illegal work, engaged a certified architect to redesign the plans to meet technical compliance, and submitted a proper PBG application.
It cost Thomas six months of delays and significant redesign fees, but he avoided demolition. He learned the hard way that in Bali, a shortcut is often the longest distance between two points.
Last-Minute Checklist for Property Owners
- Before Building: Do you have the physical PBG document in hand, not just an “in process” receipt?
- Before Operating: Does the building have an SLF? A PBG alone is not enough to open for business.
- Function Check: Does your permit match your activity? Running a hotel on a residential permit is a violation.
- On-Site Proof: Is the project signboard displayed clearly at the site entrance?
- Zoning Alignment: Have you double-checked that your KKPR matches the spatial plan (RDTR)?
FAQs about Building Permit in Bali
-
Can I start building with just an NIB?
No. The NIB is a business registration number, not a construction permit. Building without a PBG is a violation of PP 16/2021 and will lead to sealing.
-
What is the difference between PBG and IMB?
The PBG (Building Approval) replaced the IMB. The key difference is that PBG focuses more strictly on technical standards, and it must be accompanied by an SLF (Certificate of Fitness) for operation.
-
Can I get a PBG for a villa in a Green Zone?
No. The licensing system is integrated with spatial planning (KKPR). If the land is zoned Green (Agricultural), the system will reject any application for a commercial or residential building permit.
-
What happens if I buy a villa without an SLF?
You are buying a non-compliant asset. You cannot legally obtain a tourism business license (Pondok Wisata) without an SLF, meaning you cannot legally rent it out short-term.
-
Is the building permit Bali Indonesia process expensive?
The cost involves retribution fees paid to the government, which vary by building size and function, plus professional fees for architects and consultants. However, it is significantly cheaper than the cost of demolition or fines.
