Bali, Indonesia, is a popular destination for foreign investors looking to launch a lodging construction business.
With the Indonesian Standard Industrial Classification (KBLI) code 41017, foreign investment companies can establish a presence in the island’s thriving real estate market.
This code encompasses the construction, maintenance, and redevelopment of buildings used for accommodation, such as hotels, hostels, and inns, including alteration and renovation activities.
The scope of this classification is divided into two sub-classifications: GT007, which covers the design and construction of lodging buildings, and BG007, which includes the construction, maintenance, demolition, and reconstruction of these structures.
By understanding the requirements and opportunities associated with KBLI code 41017, foreign investors can successfully navigate Bali’s lodging construction industry and capitalize on the island’s booming tourism sector.
Overview
The category under KBLI Code 41017 involves the business activities of constructing, maintaining, and/or reconstructing lodging facilities such as hotels, hostels, and inns.
This includes changes and renovations to existing lodging buildings, ensuring they meet current standards and demands.
Legal Basis
The regulatory framework for lodging construction is established under Regulation Number 6 of 2021 by the Ministry of Public Works and Housing of the Republic of Indonesia, which sets forth the legal standards and requirements for this sector.
Type of License
The licensing regime for lodging construction businesses, particularly for Foreign Direct Investment (PMA), is guided by the exemption from minimum investment requirements outlined in BKPM Regulation Number 4 of 2021, Article 12.
Investments exceeding IDR 10 billion, exclusive of land and building costs, qualify under this regulation, addressing specific activities within the construction services sector.
Coverage of Service
KBLI Code 41017 covers a range of services including the design and construction of lodging facilities.
The sub-classification codes GT007 and BG007 further specify the scope to include designing and building new structures as well as maintaining and renovating existing ones.
Business Scale, Land Area, and Risk Level
The enterprises under this KBLI code are categorized as large-scale businesses. The land area for such projects is not specifically regulated, but the risk level is considered medium-high.
Licensing is conducted under a standard certification process, and the business must adhere to high safety and quality standards.
Authorities Granting Licenses
Licenses for engaging in lodging construction are granted by the Minister or Head of the Agency overseeing construction and housing. This ensures that all businesses comply with the national standards and regulations.
Requirements and Obligations for Business Licensing
Businesses must meet the standard criteria set for construction service capabilities and are required to report their annual business activities.
They must adhere to rigorous standards in terms of material quality, equipment, worker safety, construction processes, and environmental management. These requirements are designed to ensure the sustainability and safety of construction practices.
Frequently Asked Questions
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How does digital transformation affect the lodging construction industry?
Digital transformation facilitates more efficient project management, enhanced customer engagement through digital marketing, and access to innovative construction technologies.
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How can foreign investment companies establish a presence in Bali's lodging construction industry?
Foreign investment companies can establish a presence in Bali's lodging construction industry by obtaining the necessary permits and licenses, and understanding the requirements associated with KBLI Code 41017.
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How can foreign investors successfully navigate Bali's lodging construction industry?
Foreign investors can successfully navigate Bali's lodging construction industry by conducting thorough market research, partnering with local experts, and staying up-to-date with the latest industry trends and regulations.
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What is the potential for growth in Bali's lodging construction industry?
Bali's lodging construction industry has significant potential for growth due to the island's increasing popularity as a tourist destination and the growing demand for high-quality accommodation facilities.
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What are the challenges faced by foreign investors in Bali's lodging construction industry?
Challenges faced by foreign investors in Bali's lodging construction industry may include navigating local regulations, securing reliable contractors, and adapting to the island's unique business environment and cultural norms.
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