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There was a post recently in the Ubud Community Facebook group about the government cracking down on foreigners renting out villas on the accommodation site, Airbnb. I wrote about the legality of foreigners renting out villas and rooms on Airbnb earlier this year, here.
What is the government checking?
- If a foreigner is working at the business, do they have a working visa? Some people might argue that the staff who work at the villa are all Indonesian, but their Airbnb profile uses the foreigner’s picture and details. Foreigners may think that this does not constitute as “working”, but immigration can (and do) argue that they are working in a marketing capacity.
- If the business is letting out rooms, do they have the appropriate license (Pondok Wisata, Melati etc)
- Is the business registered for and paying tax on the income? (NPWP)
- They may also check if staff working at the business belong to the government’s health insurance (BPJS).
According to the report, immigration are going into villas and interviewing staff and even guests about who exactly is working in the business. There are plain clothes officers who work for immigration, so you can’t just expect government officials to show up in a uniform. Immigration typically gather evidence first and then call in the foreigner for questioning, where they present their evidence.
In the face of growing competition in the accommodation, hotels have long been pressuring the government to make all villas and accommodation providers have the appropriate licenses, so it seems as though they are now getting serious and taking action.
How to make your Airbnb property legal in Bali?
- Rental Licence
The important thing is to get the appropriate licence for your property. For a villa or guesthouse under five rooms, then this means a Pondok Wisata licence. This licence can only be held in an Indonesian person’s name, usually the owner’s. If you plan to lease a property to rent out on Airbnb, it makes sense to discuss this with the owner and seek their co-operation.
- Building Permit – IMB
The property should have a commercial building permit.
- Working Visa
If you are a foreigner running the Airbnb in Bali, then you need to hold a work permit.
- Tax
You should be registered for tax and paying tax on the income of the property.
- Health Insurance – BPJS
Staff should be registered for the government’s health insurance BPJS.
If you have any questions about getting your Airbnb legal in Bali, please do not hesitate to get in touch with me.
Does this apply also to home exchange is it fall in the same category since there’s not really any money exchanged
I have participated in vacation home exchanges almost every year between 2000 and 2012 in Canada and many countries of Europe and I never had an issue with government regulation or violations. There is no money exchanged. However – I can’t vouch for government policies in Indonesia.