KBLI 68111 Covers Real Estate Activities - buy, sell, lease, or operate

KBLI 68111 for Foreign Investors: Scope, Obligations, and Compliance Path (2025–2026)

KBLI 68111 covers real estate activities involving assets owned or leased by the operator. In practical terms, it is used for companies that buy, sell, lease, or operate real property such as apartments, housing, commercial buildings, warehouses, shopping centres/malls, and mixed-use developments. It also covers long-term residential letting (monthly or yearly), and operating buildings for rental income (e.g., leasing floors, shops, or units in a property the company holds).

This article explains what KBLI 68111 permits, how it interacts with Indonesia’s current risk-based licensing regime, and what foreign-owned entities (PT PMA) must prepare in 2025–2026 to remain compliant—especially in Bali where zoning enforcement and the OSS digital trail are strict.

What KBLI 68111 Covers (Business Scope)

Under KBLI 68111, a company may:

• Acquire and dispose of real property (both housing and non-residential buildings).
• Lease out or operate real estate the company owns or lawfully controls (including shopping centres, malls, warehouses, office buildings, and residential stock).
• Provide residential accommodation on a long-stay basis (monthly/annual) as a property owner/operator.
• Develop buildings to be operated for rental income, including multi-tenant assets where the business model is the leasing of space (e.g., shops, units, floors).
• Parcel out land into lots without land development works, and operate residential areas (including certain relocatable home parks), provided activities remain within the KBLI’s property-operation scope.

Important distinctions:

• Short-stay hospitality (daily guests, tourist accommodation, hotel-like operations) typically requires tourism/hospitality KBLIs, not 68111. If your revenue model is nightly stays with services, align with accommodation KBLIs and obtain sectoral tourism licenses.
• Shopping centre/mall operations can fall under 68111 when the company develops and operates the asset as a landlord (lease/operate model). However, additional obligations apply (see below).

Special Requirements for Shopping Centres (Medium/Large Scale)

If your 68111 activity includes developing and operating a shopping centre or mall at medium or large scale, you must account for two compliance points commonly missed by foreign investors:

1. Establishment must follow the specific rules for shopping centres.

This includes adhering to spatial plans (KKPR), technical standards, building approvals (PBG), worthiness certification (SLF), and any trade-sector requirements tied to shopping centre operations.

1. Mandatory MSME partnership spaces.

Operators are required to provide and/or offer commercial space for micro and small enterprises (UMKM) under affordable sale or rental terms calibrated to UMKM capacity. This obligation should be reflected in design, leasing policy, and tenancy mix planning from the outset.

Failure to plan for UMKM allocation at concept stage often leads to PBG notes, adjustments to tenancy plans, or operational licensing delays.

Investment Thresholds for PT PMA Under the Current Regime

Foreign-owned companies must meet minimum investment thresholds. In practice:

• For full buildings or integrated housing complexes developed and operated as a whole, the total investment threshold is > IDR 10 billion (ten billion rupiah). For this project type, land and buildings are counted within the threshold.
• For unit-based property (not an entire building or fully integrated complex), the threshold remains > IDR 10 billion excluding land and buildings per 5‑digit KBLI per project location.

These thresholds are per KBLI per site. They should be reflected in your business plan, CAPEX schedule, and OSS filings. Submitting figures below threshold or splitting one integrated project into smaller artificial segments invites scrutiny and potential rejection.

How PP 28/2025 Changes the Approval Journey for 68111

PP 28/2025 consolidates the risk-based licensing regime and makes approvals traceable through OSS. For 68111 projects, the system cross-checks whether the business activity, location, building function, and intended operations match. If they do not, the process halts.

Expect the following <strong>alignment tests</strong>:

1. KBLI vs. actual activity
2. If you market daily stays while holding only 68111 (real estate operation), the activity is misclassified.
3. If you operate a mall, the file must show shopping-centre compliance and UMKM space provision.
4. Zoning (KKPR) vs. intended use
5. Commercial operations require compatible zoning.
6. Residential-only zoning used for commercial leasing is a blocker.
7. PBG/SLF vs. building function
8. The technical approvals must reflect the actual use. Residential-approved buildings used as retail centres or serviced apartments cause conflicts.
9. Environmental documents vs. project scale and sensitivity
10. SPPL vs. UKL‑UPL vs. AMDAL must be sized correctly. Mismatch leads to resubmission or suspension.

Once these elements align, OSS issues the risk-based license at the appropriate level. Under the current enforcement environment, “build first, fix later” approaches face rejections during SLF and operational licensing.

Activities Commonly Misaligned With 68111

• Nightly rentals or hotel-like operations without hospitality KBLIs and tourism licenses.
• Co-living marketed as short-stay while holding only 68111; if unit turnover is under 30 days, expect tourism classification.
• Shopping centre operation without documented UMKM space and policy.
• Residential PBG used for commercial leasing (shops/offices) without function alignment.
• Unit sales/management structured to bypass PT PMA thresholds.

Correcting these requires re-mapping KBLIs, amending environmental scope, revising PBG, or adjusting the business model to fit the existing approvals.

Entity and Transaction Structures That Fit 68111

For foreign investors targeting own-to-lease or develop-to-operate models:

• PT PMA with KBLI 68111 as a core activity where the plan is to hold and rent property (monthly/annual terms for residential; multi‑year leases for commercial).
• For shopping centres, keep 68111 and document the operator role, tenancy policy, and UMKM allocation. Consider a separate facility management agreement if an external operator handles day-to-day functions, while ensuring records remain consistent in OSS.
• If parts of the asset are hospitality (daily rental inventory), split scopes:
• Property-holding PT PMA (68111) for the landlord function; and
• Hospitality PT PMA (relevant accommodation KBLIs) for daily-guest operations—with arm’s-length leases/service agreements and OSS consistency.

Avoid blending daily hospitality under 68111. The system compares marketing, tax, and operational data with declared business activities.

Zoning (KKPR), PBG, SLF, and Environmental: Sequence for 68111 Projects

A workable sequence for Bali and other provinces:

1. Pre‑screening: confirm spatial intent (commercial vs. residential) matches project concept.
2. KKPR application: obtain zoning suitability for the proposed function (mall/retail, warehouse, residential leasing, mixed-use).
3. Environmental scoping: determine SPPL (small impact), UKL‑UPL (moderate), or AMDAL (significant). Integrate requirements into design—especially wastewater, drainage, access, parking, fire systems.
4. Concept and technical design: prepare drawings that match the declared building function and operator model (e.g., shopping centre with UMKM areas).
5. PBG submission: technical approval based on the chosen function(s).
6. Construction with compliance record-keeping: maintain as‑built logs, materials specs, test certificates (fire safety, MEP), and change control.
7. SLF issuance: demonstrate the building matches PBG and is safe to operate.
8. Operational licensing in OSS: ensure licenses and declarations mirror the real activity—68111 for landlord/operation; tourism KBLIs for daily-stay hospitality if applicable.

Note: If the project is phased, align the approvals per phase (KKPR scope, PBG blocks, SLF per block) so each section can operate legally on its own.

Documentation Investors Should Prepare

• Corporate files: deed, NIB, KBLI list, shareholder structure, board authorities.
• Investment plan: CAPEX showing > IDR 10B threshold as applicable; reconcile whether land/building count within or outside the threshold based on project type.
• Land control: titles/leases with commercial use clauses where relevant.
• Zoning: KKPR approval consistent with activity.
• Environmental: SPPL, UKL‑UPL, or AMDAL with commitments integrated into design.
• Technical: PBG-approved drawings/specs; change logs.
• Safety & commissioning: fire system tests, elevator certificates, utilities handover, parking/access compliance, disabled access provisions as applicable.
• SLF: final certificate with exact use/function.
• Operational set: lease policy (including UMKM allocation for shopping centres), tenancy templates, O\&M manuals.
• Tax & reporting setup: categories aligned with declared activities; e‑invoicing and reporting systems matched to actual operations.

Keep a single compliance register to ensure OSS data, contracts, and on-site reality are consistent.

Common Failure Points Specific to 68111

1. Using 68111 for nightly rentals.

Result: OSS inconsistency; tourism inspectors intervene.

Fix: Add tourism KBLIs; align PBG/SLF; separate landlord vs. operator roles.

1. Shopping centre plans without UMKM allocation.

Result: Notes during PBG; operational license delays.

Fix: Integrate UMKM area and pricing policy early; document in submissions.

1. Residential PBG used for commercial leasing.

Result: SLF conflict; license cannot be issued.

Fix: Reclassify building function or adjust operations to match approvals.

1. Investment plan below threshold or miscounted.

Result: PMA licensing issues; site-level rejections.

Fix: Structure CAPEX to meet > IDR 10B rule correctly per project type and site.

1. Environmental category underestimated.

Result: Upgrade from SPPL to UKL‑UPL/AMDAL midstream; redesign.

Fix: Determine category during feasibility; size MEP and civil works accordingly.

1. Fragmented OSS records vs. contracts/marketing.

Result: Red flags during review; submission holds.

Fix: Synchronize declarations, leases, and public claims with KBLI 68111 scope.

Tax and Commercial Considerations (Brief)

• Revenue model clarity: Rental income vs. hospitality revenue impacts VAT, PPh, and reporting. Ensure tax codes match 68111 landlord/operation vs. tourism services.
• Transfer pricing/related party: If a related operator runs part of the asset, maintain arm’s‑length agreements.
• Withholding on leases: Structure agreements consistent with Indonesian tax rules; ensure tenants’ billing aligns with the building’s approved function.

Practical Takeaways for Foreign Investors

• Define the business model first. If it is own-and-lease (monthly/annual), 68111 is suitable. For nightly stays, add hospitality KBLIs.
• Start with KKPR. Zoning must explicitly permit the intended use.
• Plan investment thresholds properly. Understand when land/buildings are included or excluded from the > IDR 10B requirement.
• Design to function. PBG/SLF will reflect the building’s use. Do not mix residential approvals with commercial leasing.
• For malls/shopping centres: allocate UMKM spaces and document the policy in design and operations.
• Keep OSS, contracts, marketing, and on-site reality aligned. PP 28/2025 makes inconsistencies visible.

KBLI 68111 is the correct classification for owning, leasing, and operating real estate for long-stay residential and commercial rental purposes, including shopping centres. In 2025–2026, approval processes are sequential and integrated. Zoning (KKPR), environmental documents (SPPL/UKL‑UPL/AMDAL), building approvals (PBG/SLF), and operational licensing in OSS must match the declared activity. For shopping centres, UMKM tenancy allocation is a fixed requirement. For PT PMA, investment thresholds of > IDR 10B apply at the KBLI and site level, with different counting rules depending on whether the project is a full building/complex or unit-based.

Projects that align these elements from the start proceed more predictably. Those that attempt to blur categories—especially by using 68111 for short-stay hospitality—face reclassification, redesign, and licensing delays.