Land zoning in Bali

Land in Bali is categorized according to different colors and zones that determine the rights of the owner or the tenant, particularly in terms of construction.

Mastering the characteristics of each zone is essential in order to successfully carry out a project and avoid difficulties.

This aspect is definitely central as the government is currently discussing a moratorium on building permits. These recent regulations are a direct consequence of the post Covid-19 overdevelopment.

This will probably lead to further control and restrictions on urban development.

Below are a few essential informations on the different land zones and colors in Bali.

Pink : Touristic Area

Pink color is used for touristic areas, where development is the most open. These areas are mainly located along the seashore, or in major towns.

These areas are intended for all business projects such as hotels, villas, restaurants, or gyms : so these are undoubtedly prime locations for foreign investors.

Therefore in terms of pure investment, you might target a pink area as restrictions are fewer and permits are easier to obtain.

Red : Commercial area

Red areas are primarily suited for commercial purposes and are mainly located along major roads. These are ideal locations for business.Hotels or villas are also allowed in red areas.

However, the roads serving the red zones are usually overcrowded with traffic jam, so they tend to be subject to quite some noise and air pollution.

Despite that, red areas are optimal to showcase a business.

Orange : Mixed area

Orange areas might also be considered by investors, as building villas is allowed as well as developing businesses (not all types). Though, these are quite rare and do not match with all sorts of projects. For example, regular hotels are not allowed.

Yellow : Residential area

Residential areas are probably the most common ones, but only houses labelled « rumah tinggal » (literally translated as ‘dwelling house’), are allowed in these yellow areas.

Buyers must be extra careful if their project is to build a « villa » for short term rental and commercial purposes. Indeed, Indonesian law draws a clear distinction between « houses » and « villas ».

First ones are for living and the second ones are for commercial purposes. That being said, yellow areas do not allow to build a villa.

In order to build a villa and do short term rental, you will need a permit called « Pondok wisata ». And unfortunately, « Pondok wisata » cannot be granted to foreigners.

According to the latest government announcements, we believe that regulations might only increase over time. All the more since there are now countless villas on yellow areas, which are available for short term rental on Airbnb or Booking. These villas are often built with little to zero compliance with the appropriate local zoning and area regulations.

Therefore, we only recommend yellow zones to people who do not plan to build for commercial purposes.

Light yellow/green : Agricultural area

Agricultural zones are reserved for farming and of course, no projects should be considered there. Nevertheless, we regularly notice constructions in these areas, including hotels.

Some projects still remain possible in these areas, however there is always a potential risk with how the regulation is interpreted. The risk is also linked to uncertainties that can occur with the local administration and the different public authorities.

To sum up,

in Bali is a really technical and legal topic that requires professional support.

Several times, we have witnessed real estate agents listing and offering pieces of land which definitely do not fit with the buyers project. And the reasons may be pretty obvious, from the urge and greed to sell fast, to a simple lack of knowledge.

Even though foreign investments are open and welcome in Bali, land regulations are crucial and must be taken into account for the sustainability and success of a project.

Each and every project has one or two matching areas. Professional and experts will be able to identify these and help you smoothly carry out your investment.