What permits do you need to build on leased land in Bali?

Most foreign-funded building in Bali happens on leased land, and the permit structure is where it most often goes wrong. The problem is not that it cannot be done. It is that the paperwork runs through the landowner and buyers sign leases that do not account for that.

Who the permit belongs to

A PBG, the building approval that replaced the IMB, is issued in relation to the land and generally applied for by or with the consent of the party holding the land right. On leased land that is normally the Indonesian landowner, not you.

This has three consequences that must be handled in the lease itself.

You need the landowner's cooperation to apply. If the lease does not oblige them to sign what the application requires, they can simply decline, and you own a lease over land you cannot lawfully build on.

The permit follows the land. When the lease ends, the building and its permit stay. That is normal and it is why the term and the extension clause matter more than the build quality.

A landowner who will not cooperate has leverage. Mid-build, that leverage is close to absolute. This is a known pattern and it is entirely preventable at the drafting stage.

What the lease must say

Before you sign, not after:

An express right to build, describing the scale and nature of what you intend, not a general permission.

An obligation on the landowner to sign every application, consent and document required for the PBG, the SLF, utilities connections and any operational licence, within a defined time, without additional payment.

A power of attorney allowing you or your appointed agent to make the applications, so cooperation is not required afresh at every step.

Clarity on who owns the building during the term and what happens to it at the end. Under Indonesian practice the building generally follows the land at expiry unless the contract says otherwise, which is why the extension clause is the value.

A right to sublease or assign, or your exit is gone.

Named remedies if the landowner obstructs. A right to specific performance and a defined compensation figure, not an unenforceable promise of good faith.

If a landowner resists these clauses, that is information. Most will agree because most transactions are ordinary.

The sequence

Zoning first. Check the regional spatial plan for the specific parcel before anything. Zone determines whether your intended use is permissible at all, and whether commercial operation is possible. A residential zone does not support a commercial villa operation, whatever is being built nearby.

KDB and KLB. The building coverage and floor area ratios for that zone set the size of what you may build. These constrain your design and they are checked at application.

PBG. Submitted with full technical drawings, structural calculations and supporting documents, assessed against the spatial plan and the building rules. Timelines vary considerably by regency and by the completeness of the submission.

Build. To the approved drawings. Deviations are the most common reason the next step fails.

SLF. The certificate of fitness for occupancy, issued after inspection. Without it the building is not lawfully occupiable, and a villa without SLF is a materially harder sale.

Operational licensing, if you intend to rent commercially. Separate from the building permits, and Bali closed new foreign-owned villa and homestay registration on 22 July 2026, so confirm current status before you plan around it.

The most common failures

Building before the PBG is issued because the contractor says everyone does. Building to drawings different from the approved set, which surfaces at SLF. A lease with no obligation on the landowner to cooperate. Discovering after signing that the zone does not permit the intended use. And paying a facilitator to make a permit happen, which produces a document that does not survive inspection.