If you’re an expatriate looking to build a villa or a business in Bali, you’ve likely come across the PBG and SLF permits.
On paper, they’re simple: get approval to build, then a stamp to use it. But dig into the reality, and it’s a different story, one that can leave even seasoned investors scratching their heads. As of the 25th of February 2025, Bali’s permit process is tighter than ever, and rejections are all too common. But why do these permits seem so tricky?
What are PBG and SLF?
Let’s start with the basics. The Persetujuan Bangunan Gedung (PBG) is your go-ahead to start construction. Think of a villa in Seminyak, a café in Ubud, or a gym in Canggu. The PBG took over from the old IMB (the former Building Construction Permit) in 2021 under Government Regulation No. 16/2021 and runs through the Online Single Submission (OSS) system.
The Sertifikat Laik Fungsi (SLF) comes later, after construction, confirming your building is safe and usable. This is renewed every 20 years for homes or five years for commercial properties.
Sounds easy, right? Not so fast. “Compliance isn’t optional. It’s the foundation,” says Terje H. Nilsen, CEO and Co-Founder of Seven Stones Indonesia. “Too many foreigners assume they can wing it, but the rules are tightening, and the consequences are very real.”
For expats, this isn’t a quick checkbox, it’s a journey best navigated with eyes wide open.
Why It’s So Complicated
You can’t just toss together a rough sketch of a building on the back of an envelope and call it a day anymore. You need detailed plans, architecture, structural math, and environmental reports, all from a licenced Indonesian professional to help submit your PBG application online via OSS, where it’s judged against Bali’s zoning laws (Provincial Regulation No. 3/2020, RTRWP) and safety standards. If you miss something, you’re stuck. In November, Kompas reported a story about a Badung developer who waited six months for his PBG because he forgot wastewater details.
The SLF ups the ante. After the building, inspectors look at everything from fire exits to earthquake readiness and plumbing. It’s thorough and not a rubber stamp. In tourism-heavy spots like Canggu or Uluwatu, the bar is set even higher as administrations clamp down on overdevelopment.
Then there’s the paper trail: land certificates (SHM or Hak Pakai), ownership proof, and Banjar recognition. “It’s a maze for foreigners,” said a The Jakarta Post report on Bali’s permit struggles. Without local help, you’re lost.
Zoning Challenges: Rules vs. Reality
Bali’s zoning laws are meant to keep the island balanced. The zones are: Green for agriculture; Yellow for homes, and; Purple for tourism. These are all mapped out in Provincial Regulation No. 3/2020 (RTRWP). Sounds organised, right? In theory, it is. Very. But in practice, it’s messier. Some developers bend the rules, building villas in Green Zones where construction is restricted, especially in fast-growing areas like Tabanan or Canggu. A 2024 Tempo report, for example, exposed developers bribing officials to reclassify land or skipping permits altogether.
Loopholes can catch the best of us off guard. You might buy a property thinking it’s legit, only to find out it’s in a restricted zone and your permits won’t hold up. Nilsen adds another layer: “Zoning enforcement is a battle. Some areas are overbuilt because people, both locals and foreigners alike, find ways around the system. But the government is waking up, and expatriates need to be ahead of that curve.”
The risks are real, so before you sign anything, check the zoning status. Use the Badung Regency Zoning Portal or hire a notary to make sure you’re not caught in a Green Zone trap.
Common Reasons for Rejection
Permits don’t just stall; they can crash. Here’s why expats often get the red light:
Zoning Mismatches
Bali’s zoning is rigid. Build a hotel in a residential spot, and your PBG is toast. Check zoning first, and don’t try to fool the system.
Incomplete or Incorrect Plans
PBG needs flawless details, including safety features and structural integrity. Skimp on a fire exit, and it’s over. SLF is picky, too. If you fail an inspection, you’re going to have to pay to get it fixed.
Environmental Violations
Eco-rules are also tightening. Disrupt a waterway or skip waste plans, and your permit is gone.
Building Without a PBG and Bali’s Exterior Rules
Start construction without a PBG, and you’re breaking the law. Plain and simple. It’s a crime under Government Regulation No. 16/2021 and risks fines or demolition. Even with a PBG, SLF can trip you up if your building doesn’t fit Bali’s vibe. Don’t think of modern glass boxes in traditional areas. Non-compliant exteriors are a no-no.
Unauthorised Use
In Yellow Zones, where PMA companies can’t legally run commercial operations like rentals, inspectors can – and do – reject SLF for unauthorised use.
Banjar Pushback
The Banjar, Bali’s traditional community councils, aren’t on the OSS list, but they can derail you. Ignore them at your peril. It’s not just about money; it’s about respect. Pushback from the Banjar isn’t random; it’s their way of protecting their home, and expats need to work with it.
Late or Missing Payments
PBG and SLF fees aren’t optional. Read that again.
Tips to Stay on Track
How do you beat the odds? Here are some useful tips:
- Hire Local Experts: Work with a local architect or consultant who knows OSS and catches zoning or document issues early.
- Verify Zoning: Use regency portals or a notary to confirm your land’s status. Don’t trust a seller’s pitch.
- Plan Meticulously: Nail every detail, from safety to environment and structure. You can fix things later, but be prepared for delays and additional costs if you overlook something.
- Match Bali’s Style: In Yellow Zones, keep exteriors traditional. PBG or no PBG, SLF won’t pass if it screams “outsider.”
- Engage the Banjar: Meet them, pay up, and fit in. They’re your allies if you play it right.
- Budget for Tweaks: SLF surprises happen. Keep cash ready for things like wiring or drainage upgrades.
Why It Matters
Bali’s real estate sector is hot. The Bali Tourism Board claims 14 million foreign and domestic tourists came to the island in 2024, but unchecked growth has its consequences. Overbuilding is flooding Canggu, for example, and stricter PBG/SLF rules are the response. These, as well as the Banjar’s oversight, are Bali’s attempt to keep up without losing itself. For expats, it shouldn’t just be about building a house, villa, or business; it should also be about doing the right thing.
Permit rejections hurt, especially when they hit your wallet. But with preparation, a fine toothcomb, and the right team, you can crack it. Your Bali project doesn’t have to flop; it just needs a solid start. One permit at a time. If you’d like a consultation and further insights into investing, building property, and permits in Bali, get in touch with Seven Stones Indonesia via hello@sevenstonesindonesia.com, your partner in growth.
Sources: Kompas, The Jakarta Post, Seven Stones Indonesia, Ministry of Public Works and Housing, Tempo.