Accommodation Business in Bali

The word “Bali”  conjures up daydreams of beautiful landscapes, majestic volcanoes and ancient temples. It is easy to see why Bali has been voted the world’s best island time and time again. Tourists flock the island all year round, bringing in lucrative returns for accommodation businesses in Bali.

With an accommodation business license such as a Guesthouse (Pondok Wisata), Villa or Hotel license, your business will be able to provide short term holiday rentals at your registered premises, take online bookings, and provide travel packages with meals and travel activities.

Requirements for setting up an accommodation business
The first important question is to decide which area in Bali you would like to set up your accommodation business in. Every regency has specific regulations, which can affect your ability to conduct your business, affect how many rooms you can build, the percentage of land you are able to utilize.  A due diligence is a key step for new business owners.

The next step is to decide on the type of legal structure, how many rooms, and contact an architect to draw up the necessary plans. An accommodation business should have a purpose specific building permit (or IMB). A hotel fall under a limited liability company  , whereas a guesthouse under 5 rooms can only be owned by Sole Entrepeneur

Capital investments vary depending on the type and size of your business. and the minimum required investment can go up to IDR 10 billion rupiah per scope of business for a PMA.

In most parts of South Bali, a moratorium is currently in place which limits issuance of hotel licenses. Those interested in building villas and hotels, will need to meet minimum land size requirements, and obtain the regency and necessary Governor’s approval before building.

How many rooms to build
A Pondok Wisata is a small scale business solely owned by an Indonesian citizen. This guest house business should have 5 rooms or less, and is unable to sponsor any working permits nor KITAS.

A 3 star hotel is considered a large scale business and can be owned fully by a foreign investment company (PMA) . The hotel should have over 25 rooms, and include a range of facilities such as business center, pool, gym, wheel-chair access and restaurant.

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Setup time frame and cost
6-8 weeks to obtain a tax ID and start operations.
Setup costs for a Guesthouse in Denpasar starts from IDR 75 million. Hotel licenses start from IDR 130 million.

*costs exclude KITAS, village donations and building permits.

Licenses involved
A guesthouse will have a different set of licenses from a hotel business, each regency will also have its own requirements. For a hotel business in Denpasar, we include the necessary 15 licenses you'll need to operate.

Business structures for your accommodation business
A guesthouse with 5 rooms or less is classified as a Pondok Wisata, which can only be legally owned by an Indonesian citizen.
A non starred hotel can be owned by a PT. Local or a Foreign Investment (PMA) company.
A villa and 3-5 star hotel can be owned 100% by a PT Local or PMA .

Read setting up an accommodation business in Bali to find out more about the various structures of accommodation businesses.

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Take the next step towards setting up your accommodation business.







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