Real Estate and Short‑Term Accommodation as PP 28/2025

Real Estate and Short‑Term Accommodation Compliance in Indonesia: PP 28/2025, KBLI Limits, and UMKM Protection

• Property‑linked activities are treated as regulated business operations, not informal villa transactions.

• Short‑term accommodation at micro/small scale remains a protected UMKM space; foreign capital is directed to enterprise‑scale PT PMA structures with the correct KBLIs, minimum investment planning, and sectoral licenses. 

What “regulated business” means in practice

• PT PMA + KBLI that match the real operating model

• KKPR confirming land‑use compatibility

• Environmental documentation sized to project scope

• PBG/SLF tied to the declared building function

• Operational licensing (e.g., tourism for short‑stay models)

PP 28/2025 makes approvals traceable end‑to‑end

Zoning and building approvals drive feasibility

• KKPR determines whether the intended use is permissible on the parcel.

• PBG regulates design and construction to the approved function; SLF confirms conformity and safety for operations.

KBLI 68111: where it fits and where it does not

• 68111/68200 for the landlord/fee‑based property services (monthly/annual leases, brokerage/management)

• Tourism/accommodation KBLIs (551xx) for daily stays, with matching zoning, environmental, PBG/SLF, and sectoral licensing.

Real estate and short‑term accommodation: structural reality for foreign investors

• Daily rental of villas occupies the UMKM accommodation space.

• Foreign individuals cannot convert personally owned/leased villas into daily tourist rentals in their own capacity.

• PT PMA is designed for larger, structured hospitality (hotels/resorts/integrated developments), not micro‑scale single‑villa letting.

• Workarounds—nominee/proxy/“management‑only”—do not override zoning, PBG/SLF, or sectoral rules once cross‑checked in OSS.

Why “management company” workarounds do not resolve regulatory conflicts

Common failure points (condensed)

• Concept/design before KKPR

• Land documents lacking commercial use permissions

• Incorrect KBLI selection

• Under‑scoped environmental pathway

• Building first, chasing PBG/SLF later

• Residential approvals used for commercial stays

• No UMKM allocation for shopping centres

• Platform listing before operational licenses

• Fragmented records (OSS vs. contracts vs. on‑site reality) 

How KBLI changes affect licensing (integrated explanation)

• Business scope: If your declared activity no longer fits the updated KBLI wording, applications may be queried or refused. 

• Sectoral route: Shifts in supervising ministries or PB‑UMKU requirements alter supporting documents and order of approvals. 

• Technical standards: A reclassified activity can change required PBG/SLF parameters and environmental category. 

• Foreign ownership & scale: The Positive Investment List ties ownership eligibility and large‑business thresholds to KBLI; failure to adjust can impact licensing, tax treatment, and manpower/immigration alignment. 

Investor pathways that fit the rules

• Hotels/resorts (5511/5512) with matching KKPR, environmental scope, PBG/SLF, and tourism licenses

• Serviced apartments/condo‑hotel inventory (5513/5519 variants) planned and licensed as short‑stay accommodation, not retrofitted housing

• Integrated hospitality/wellness combining accommodation (551xx) with real estate holding (68111/68200), spa (96122), sports (93114), and retail—each mapped to its own KBLI and license trail in OSS

• Shopping centres/mixed‑use under 68111 with documented UMKM tenancy allocation and landlord‑operator governance that matches filings 

Documentation and sequencing that prevent rework

1. Early screening (spatial overlays, access, utilities, setbacks)
2. PT PMA + KBLI mapping to the intended operating model
3. KKPR confirmation
4. Environmental scoping (SPPL/UKL‑UPL/AMDAL) and design integration
5. Technical design aligned to declared function
6. PBG issuance and compliant construction record‑keeping
7. SLF
8. Final operational licensing in OSS (tourism/real‑estate/retail as applicable)

Appendix A — Typical KBLI–Operating Model Mapping (Real Estate & Hospitality)

• 68111 – Real estate owned or leased (long‑stay residential; commercial leasing; malls as landlord function) 

• 68200 – Real estate services on a fee/contract basis (brokerage, property management, valuation) [oss.go.id]

• 55110/55120/55130/5519x – Hotels, resorts, tourist lodges, villas/other short‑term accommodation (use exact subclass per inventory) 

• 68111/68200 (hard‑asset/management) + 551xx (accommodation) + 96122 (spa) + 93114 (sports facility) with matching zoning and building functions per block/phase in OSS [oss.go.id]

Appendix B — Consulting & Professional Services KBLI (Commonly Used by PT PMA)

• 70209 – Other management consulting activities (strategy, ops, HR, org)

• 70201 – Tourism management consulting (feasibility, planning, controls) 

• 71101 – Architectural services (subject to professional/practice rules) 

• 71102 – Engineering and related technical consultancy (design/supervision, geotechnical/surveys) 

• 69201 – Accounting, bookkeeping, and auditing activities

• 69202 – Tax consultancy 

Appendix C — “Negative List” Today: What Is Actually Closed?

Conclusion: Plan for alignment, not exceptions

Notes on thresholds and transition (for planning models)

• Investment plan: In general, plan > IDR 10 billion per 5‑digit KBLI per site (ex‑land/building) unless an exception applies; capture this clearly in LKPM reporting. 

• Paid‑up capital: 2025 implementing rules lowered minimum paid‑up capital benchmarks for PMA; confirm current figures and any “lock‑up”/use‑of‑funds conditions relevant to your sector. 

• Grandfathering & OSS migration: Licenses issued pre‑update stay valid; anticipate profile updates and new data fields as OSS upgrades complete. 

Indonesia’s current licensing regime is documentation‑led and digitally traceable. In Bali, authorities now verify that zoning (KKPR), environmental approvals (SPPL/UKL‑UPL/AMDAL), building approvals (PBG), building worthiness (SLF), and sectoral/operational licenses are aligned inside the OSS system. PP 28/2025 made that linkage explicit and replaced the earlier framework under PP 5/2021; it also introduced transitional rules and centralized checks that keep existing licenses valid while the updated OSS platform is rolled out. 

For foreign investors, two points frame execution in 2025–2026:

Feasibility begins with regulatory fit. 

A compliant project connects:
Under PP 28/2025, OSS rejects or flags submissions when any element is inconsistent with the others, and it requires prerequisite checks (spatial, environmental, building) before downstream licensing proceeds. 

The system now tests four alignment points: KBLI vs. activity, zoning vs. use, PBG/SLF vs. function, and environmental category vs. scale. Applications that rely on “build first, license later,” use residential approvals for commercial accommodation, or depend on informal zoning practices stall or are refused in OSS under the centralized regime. 

Attempting operations without PBG/SLF now surfaces quickly because PP 28/2025 tightened the sequence and integrated prerequisites into OSS. 

KBLI 68111 (Real estate owned or leased) covers acquiring, holding, leasing, and operating real estate for long‑term rental income (residential or commercial) and includes assets such as malls/shopping centres and warehouses operated as a landlord activity. It expressly does not cover short‑term tourist accommodation (those are in the 5511/5519 family).

When a project blends long‑stay real estate with short‑stay inventory, separate scopes are needed:
For shopping centres operated under 68111 at medium/large scale, trade rules and UMKM provisions apply at the design/tenancy‑policy level; 

sequencing with KKPR → environmental → PBG/SLF is still required via OSS. 

Policy separates enterprise‑scale foreign investment from protected UMKM accommodation activities. In practice:
Viable routes for villa holders are personal use, longer‑term leasing consistent with approvals, or participation in larger projects designed and licensed as accommodation from the outset.

A management contract defines a service scope for the manager; it does not legalize an owner’s short‑stay activity when the property lacks the correct approvals or when the segment is reserved to UMKM. Audits focus on control, benefit, and actual use, not the presence of a management agreement. When inconsistencies surface, regularization typically requires structural change rather than minor documentation updates. 

Typical issues that delay or derail projects:

• Treat these as fixed constraints and plan sequencing and budgets accordingly.
• KBLI definitions determine what a company is permitted to do, which authority supervises it, the risk level applied in OSS, and the licensing sequence and technical prerequisites (zoning/environment/building) that must be satisfied. When KBLI definitions or sectoral interpretations change, OSS alignment rules change with them:
• Under the updated regime, most PMA projects still plan to invest > IDR 10 billion per five‑digit KBLI per project location (excluding land/building), subject to sectoral exceptions; 2025 implementing rules clarified mechanics and also lowered minimum paid‑up capital benchmarks for PMA while maintaining the large‑scale investment principle. Ensure your CAPEX and OSS data reflect the current thresholds.

A practical sequence:

• Long‑term real estate holding/operation (landlord):
• Short‑term accommodation (tourism‑licensed):
• Integrated developments (combine as needed):
• Note on scale/investment: Foreign‑owned entities are treated as large‑enterprise investments; plan > IDR 10 billion per 5‑digit KBLI per site (ex‑land/building) unless a sectoral rule states otherwise; paid‑up capital requirements follow the 2025 BKPM rules. 

Management consulting (general/specialized):

Built‑environment consulting:
Accounting & tax advisory (licensing/professional rules apply):
Important: Sectoral/professional regulations can overlay KBLI openness. For example, legal practice (e.g., 69101) is restricted to Indonesian advocates; foreign lawyers cannot establish law firms or practice Indonesian law, though limited roles exist as foreign legal consultants in local firms. Structure engagements accordingly.

Indonesia now uses a Positive Investment List (Perpres 10/2021, as amended), but a small set of business fields remain closed to investment and/or reserved to the state. These include: Class I narcotics, gambling/casinos, CITES Appendix I wildlife capture, coral extraction/use, chemical weapons, and ozone‑depleting chemical industries. Real estate and general consulting are not in this closed list, but may face sectoral/professional restrictions or UMKM partnership obligations in specific lines. 

The same regulation also creates categories that are allocated to or require partnership with cooperatives/UMKM, which can affect small‑scale retail or local service activities. Check the KBLI’s treatment under the Positive List and confirm whether partnership or scale thresholds apply before finalizing structure and filings. 

PP 28/2025 centralizes how authorities check who you are (KBLI), where you build (KKPR), what you build (PBG/SLF), and how you operate (sectoral license). The framework favors projects that treat these as a single compliance chain rather than isolated steps. For foreign investors, the most reliable path is to design around enterprise‑scale, KBLI‑accurate structures and to reserve micro/small short‑term accommodation activity to the UMKM space as intended by policy.