What people are repeating on social media
"A new law now requires villa licensing." "Short-term rental just became illegal in Bali." "Every unlicensed villa will be shut down by the deadline." The direction is roughly right, the framing is wrong: nothing about the underlying legal requirement is new. What changed is enforcement capability.
Every few months a version of the same message circulates in Bali villa owner group chats: a new rule is coming, listings will be shut down, the deadline is in three weeks. Sometimes it names Peraturan Pemerintah 28/2025. Sometimes it does not name anything at all. Almost none of it distinguishes between what is genuinely new and what has been the law since 2016.
Here is the plain version.
What PP 28/2025 actually is
PP 28/2025 is not a standalone new law. It is the implementing regulation for Undang-Undang 18/2025, the third amendment to Indonesia's tourism law, passed in October 2025. In Indonesian legal hierarchy, a UU (Undang-Undang) sets the framework and the PP (Peraturan Pemerintah) supplies the operational mechanism. UU 18/2025 defines what a tourism business is and establishes the ecosystem model. PP 28/2025 supplies the licensing pathway, through the OSS system and the NIB (Nomor Induk Berusaha, business identification number), that turns that definition into a permit you can actually apply for.
Does this apply to me if I just rent my villa on Airbnb?
Yes. UU 18/2025 defines a tourism business as any business providing goods or services to meet the needs of tourists. It does not list villas by name, because it operates at the definition level, not the inventory level. But a private villa that hosts paying guests falls inside that definition without ambiguity. If a tourist pays you for a place to stay, you are operating a tourism business under this law, whether the booking came through Airbnb, Booking.com, or a friend's referral.
So what is actually new here?
Two things, and they matter more than the rate at which people are forwarding messages about them.
First, enforcement now has a technical mechanism. The government has built an API connection between the national business licensing database and the major booking platforms. A verified NIB and the correct business classification code produce a visible "registered and licensed" status on the listing. Without it, the listing is expected to be removed from search results rather than merely flagged. This is the part that is genuinely new: not the requirement to be licensed, but the platforms' technical ability to check.
Second, there is a real date attached to it. Enforcement was expected to intensify significantly after 31 March 2026, following a period the Ministry of Tourism described as a coaching and grace period through 2025.
What was already true, and is not new at all
Operating tourist accommodation without a TDUP (Tanda Daftar Usaha Pariwisata, tourism business registration) has been illegal since Permenpar 18/2016. Nothing in PP 28/2025 invented the obligation to be licensed. What changed is that unlicensed operation used to carry low practical risk, because nobody was checking at the point of booking. The new API integration is what closes that gap. The law did not get stricter. The odds of being caught did.
The government's own framing matters here: this is described as a professional reset, not a ban on short-term rental or a ban on platforms. The stated goal is to separate licensed operators from unlicensed ones, not to shrink the market.
What you actually need
An NIB obtained through the OSS (Online Single Submission) system, under the correct business classification. OSS defines KBLI 55193, Vila, as accommodation for the public in private houses specially rented to tourists, with facilities, self-managed by the owner. A narrower category, KBLI 55130, Pondok Wisata, covers daily accommodation inside an owner-occupied home where guests share the owner's daily life, a different business model from a standalone rental villa. The two are not interchangeable, and using the wrong one on your NIB is exactly the kind of paperwork error that looks fine for years until a platform integration or an audit checks it. Beneath the NIB sit the physical permits: PBG (building approval, which replaced the old IMB in 2021) and SLF (certificate of worthiness of function), both of which assume the building itself was constructed to a standard that can pass inspection. This is the part that catches owners who bought a villa that looked finished but was never built to a licensable standard. No amount of paperwork retrofits a structural shortcut. The full compliance stack, tax, staff and guest reporting included, is laid out step by step in our note on legally renting a villa short-term.
The part nobody puts in the forwarded message
Licensing is not a one-time errand. NIB status, KBLI classification, PBG and SLF, and the annual reporting that keeps a company entity in good standing are a standing obligation, not a box ticked once at opening. Most enforcement problems we see did not start as regulatory violations. They started as paperwork that was correct on the day it was filed and never revisited.
We handle this for the mandates we carry: licensing sequenced into the build timeline, not rescued after the fact.
Talk to FrançoisQuestions we get asked directly
Do I need a license to rent my villa on Airbnb in Bali? Yes. Any accommodation that receives payment from tourists falls under UU 18/2025's definition of a tourism business, whether the booking came through Airbnb, Booking.com or word of mouth.
Is short-term rental now illegal in Bali? No. Licensed, correctly permitted short-term rental remains fully legal. What is being enforced is the licensing requirement itself, which predates PP 28/2025 by nearly a decade.
What is the correct KBLI code for a Bali villa rental? For a standalone villa rented in full to tourists, OSS classification is KBLI 55193 (Vila). If your operation is closer to renting rooms inside a home you also live in, KBLI 55130 (Pondok Wisata) may apply instead. Confirm against your specific business model through OSS.
What happens if my villa is not licensed by the deadline? Based on the platform-database integration described by the Ministry of Tourism, the expected consequence is removal from platform search results, not a direct penalty against the owner in the first instance. Confirm current enforcement practice with a licensing consultant, as this is the area most likely to keep evolving.
last reviewed: july 2026
Related: PP 20/2026 and the 0.5% tax myth · Run the numbers on your own project
Sources: Undang-Undang 18/2025 (Third Amendment to the Tourism Law, passed by the DPR 2 October 2025, enacted 29 October 2025); Peraturan Pemerintah 28/2025 (OSS/NIB implementing regulation); Ministry of Tourism (Kemenpar) public briefings on platform-NIB integration and the 31 March 2026 enforcement timeline; Permenpar 18/2016 on TDUP registration; OSS Indonesia official business classification pages for KBLI 55193 and KBLI 55130, checked 7 July 2026. This note explains the regulatory framework as we understand it and is not legal advice. Confirm your specific KBLI classification and licensing pathway with a licensed Indonesian notary or tourism licensing consultant before relying on any figure here.