Are you planning to start a Airbnb rental business in Bali?
You’ll be happy to hear Bali’s Airbnb rental market is BOOMING, and becoming a popular rental accommodation of choice for travelers in Bali. It’s not a hidden global business secret that there’s a huge rental business opportunity that has proven to be a very profitable venture (when done correctly).
So, if you are a foreigner looking to start your own Bali Airbnb rental business, there are a few things that you should be aware of before you start to rent your Bali property on Airbnb.
In this article we cover all the basis for what you need to know when starting an Airbnb business in Bali and tips we have learnt over the years when dealing with property rentals in Bali.
So, if you’re looking to take your Bali-based property and rent it through Airbnb.
Keep on scrolling.
Why Should I Start A Bali Airbnb Rental Business?
If you have a property in Bali, maybe you should ask yourself the question. Why shouldn’t I have an Airbnb in Bali?
Bali Airbnb rentals have an enormous potential to be run as a successful business and have your property rented in Bali.
With Bali’s scenic beauty, perfect holiday weather and friendly people, more and more tourists are visiting (meaning they need somewhere to rent or stay in Bali) making it one of the most popular vacation destinations across the world to date! People from all over the world see Bali as a paradise island and are actually willing to spend money for an unforgettable vacation.
Sounds like the perfect place to start your Bali Airbnb rental right?
Not only that, Bali has seen the number of entrepreneurs and digital nomads rapidly increase over the past few years. To spell it out for you, this has created a higher demand for long-term and short-term rentals in Bali, meaning the potential for your Bali Airbnb rental business to be a success is high!
Here’s some tips for you…
Your Airbnb rental can also be used or doubled up as a venue in Bali for functions and activities such as parties, and weddings, making it a very versatile and profitable business choice. Or if you plan smart enough between your Bali Airbnb rentals you can use your property as a photoshoot location. Photoshoots are incredibly popular in Bali, these images can be used for your Airbnb profile or general marketing for your property….
Thank us later 😉
Without a doubt, this has led to more and more investors entering the world of Bali Airbnb rental business!
What You Need to Start a Bali Airbnb Rental Business
Essentially, there are three important licenses/permits that you will need to acquire if you plan on opening a Bali Airbnb rental business: a PT PMA, an Accommodation License (Pondok Wisata), and a Construction License (Izin Mendirikan Bangunan -IMB).
Do note that taxes must also be paid on the property, but depending on the requirements of the local tax authority, this can be done monthly or annually. Even if your Bali airbnb rental does not generate income, you must still file the necessary tax documents.
For a Bali Airbnb rental business, you’ll need to set up a PT PMA because it is a business activity (FYI all money-making activities in Bali, Indonesia owned by foreigners legally require a PT PMA).
If you are a foreign investor in Indonesia that wants sole control of your business, then establishing a PT PMA is the best option you can opt for.
PT PMA is the only legal entity in Indonesia that allows 100% foreign ownership, making it the perfect option for your Bali airbnb rental.
However, each business sector has its own set of rules regarding allowed business activities and the maximum number of shares that foreigners can own, as determined by the Positive Investment List.
A foreign-owned company in Indonesia is commonly referred to as a PMA – a Limited Liability company with foreign capital. It’s a common and preferred company type or structure chosen by foreign businesses and investors, as it is designed to meet the legal requirements set out by the government.
In short, this license allows you to rent out a small house or homestay in Bali. It covers up to three bedrooms or up to five bedrooms, perfect for your Bali Airbnb rental business!
Anything larger than that will require a full hotel license (which you probably won’t need for a Bali Airbnb rental.)
A Pondok Wisata License can only be under the name of an Indonesian citizen but you can manage your Bali airbnb rental business on behalf of your PT PMA with scope for “Villa (KBLI 55193). This group includes the business of providing lodging services for the public, which are private houses specifically rented to tourists and their facilities and managed by the owners themselves.
Before you start your Bali Airbnb rental, note that this license will be issued for a duration of 5 years and can be extended. You can expect a wait of 6-8 months before acquiring it.
Building Permits for your Bali Airbnb Rental Business
Starting a Bali Airbnb Rental business also means you should look at Building Permits. There are two new types of Building Permits that you should be aware of.
PBG or Persetujuan Bangunan Gedung: This is a permit you apply for before actually constructing the building.
SLF or Sertifikat Laik Fungsi: This is for existing buildings that do not have a permit yet (No IMB/PBG).
So if you’re building your Bali Airbnb rental business from scratch, you’ll need a PBG.
Documents Needed To Apply for your Bali Airbnb Rental Business
- Apply NPWPD Number (Tax Number)
- Apply document of ITR (zoning)
- Apply document of UKL – UPL: (Environmental Management and
- Environmental Monitoring Effort / Management System and Monitoring for Environment)
- Apply document IMB (Change of the Function) – must be for “Pondok Wisata”
- Apply document of NIB “Pondok Wisata”
- Apply document of Tanda Daftar Perusahaan (Business License)
These are some of the most important things you should know if you are planning to start a Bali Airbnb rental business. As with a lot of things in Indonesia, setting up a business legally can take time and requires attention to all details. It may seem daunting, but with a trusted agency like Legal Legends, the process can be done more easily and efficiently. We have years and years of experience and are always looking for the best possible ways to help you.
Are you interested in starting your own Bali Airbnb rental business? Contact us today and we’ll get you started!