Residential Property Leasing (Own Property)

🏢 The Bali Commercial Property Market (Reality Check)

• Coworking spaces: Canggu, Seminyak, Ubud — massive demand from digital nomads; spaces like Dojo Bali, Outpost, Tropical Nomad operate under 68112
• Shop lots (toko): Seminyak, Kuta, Ubud — retail spaces for F&B, fashion, wellness; rental rates IDR 50M–500M/year depending on location
• Warehouses: Mengwi, Tabanan — logistics, e-commerce fulfillment, manufacturing storage; growing demand from online retail boom
• Office buildings: Denpasar, Sanur — corporate offices, agency headquarters; rental rates IDR 200K–800K/m²/month
• Typical investment: IDR 5B–50B for commercial property acquisition or long-term lease (25–30 years Hak Sewa)
• Revenue model: Monthly/annual rent (IDR 20M–500M/month depending on size/location), service charges, utilities markup

⚠ CRITICAL: 68112 Is for LANDLORDS, Not Tenants

• You are the PROPERTY OWNER — you own the building or hold the long-term lease (Hak Sewa), and you rent it out
• You are NOT the tenant — if you're renting office space for your own business, you don't need 68112; your business uses its own KBLI code
• You are NOT a real estate agent — if you're intermediating property transactions for commission, you need 68200 (Real Estate Agency)
• Example:
  • PT PMA owns coworking building in Canggu, rents desks to freelancers = 68112 ✓
  • PT PMA rents office space for its own software development business = NO 68112 (use 62199 for software dev) ✗
  • PT PMA brokers commercial property deals for commission = 68200 (NOT 68112) ✗

⚠ CRITICAL: Property Ownership Structure for PMA

• HGB (Hak Guna Bangunan) over HM (Hak Milik) — most common structure for PMA in Bali
  • PT PMA holds HGB (building rights, 30+20 years renewable)
  • Land remains HM (freehold) owned by Indonesian citizen (WNI)
  • Notaris wajib — all HGB agreements must be notarized and registered at BPN (Badan Pertanahan Nasional)
• Hak Sewa (Leasehold) — alternative for PMA: long-term lease (25–30 years) from WNI landowner
  • Lower upfront cost than HGB
  • Renewal risk at end of lease term
  • Must be registered at notaris
• Nominee arrangements — ILLEGAL; BPN and PPATK (anti-money laundering) increased scrutiny since 2023

⚠ CRITICAL: PBG Must Match Commercial Use

• PBG (Persetujuan Bangunan Gedung) — building permit must specify commercial use (kantor, toko, gudang)
• Common mistake: Building has residential PBG, owner tries to rent as commercial space = zoning violation
• KKPR (Kesesuaian Kegiatan Pemanfaatan Ruang) — spatial conformity certificate from ATR/BPN; verify zoning allows commercial activity
• Enforcement: DPMPTSP Bali has increased inspections since 2024; non-compliant buildings face closure orders

⚠ Common Mistakes in Bali Commercial Property Leasing

• Operating without NIB — many small landlords rent out shop lots informally; PT PMA requires NIB for legal operation
• Confusing 68112 with 68120 — commercial (68112) vs. residential (68120); different codes, different tax treatment
• Mixing landlord activity with tenant activity — if your PT PMA operates a business AND rents out space, you need BOTH codes (e.g., 68112 + 62199 for software dev)
• Ignoring tax obligations — PPh Pasal 4(2) 10% final tax on rental income is mandatory; PPN 11% if revenue > IDR 4.8B/year
• Poor lease documentation — commercial leases should be notarized; verbal agreements lead to disputes