In recent years, Bali has become a top destination for digital nomads and remote workers, creating a unique opportunity for entrepreneurs to tap into innovative business models such as co-living. This guide will walk you through the essential steps of establishing a co-living business in Bali, from understanding key market trends to navigating the legal landscape.
The Rise of Co-living in Bali
In 2019, Bali boasted the highest number of digital nomads among Southeast Asian cities, with nearly 5,000 individuals choosing the island as their temporary home. This trend has only expanded recently, fueling demand for flexible, community-oriented accommodations and sparking the rise of co-living spaces in Bali.
Co-living spaces in Bali offer more than just basic accommodation. They foster a sense of community, provide a base for productivity, and promote a balanced lifestyle. Most importantly, they meet the needs of digital nomads and remote professionals. These spaces typically offer:
- Shared living areas with private bedrooms.
- High-speed internet access and dedicated co-working facilities.
- Flexible short-term and long-term lease options.
- Communal areas for socializing and networking.
- Access to a community of like-minded individuals.
- Opportunities for cultural immersion and local experiences.
Co-living spaces are popular among nomads seeking a balance between affordability, convenience, and a sense of belonging. For foreign entrepreneurs, they provide a unique business model to establish accommodation services and address the demand for shared living spaces among remote professionals.
Setting Up a Co-living Accommodation Business in Bali
How to Establish a Co-living Business in Bali
To establish a co-living business in Bali, you must adhere to several regulatory requirements, including securing the necessary licenses, and permits, and forming a legally compliant business structure. Below, we break down the key steps involved in launching your co-living venture in Bali.
- Company Incorporation and Registration– You must set up a business entity (a limited liability company with direct foreign investment). This requires:
- Reserving your business name with the Ministry of Law and Human Rights.
- Meeting the minimum capital requirement of at least IDR 2.5 billion (USD 150,000).
- Prepare and submit the Articles of Association.
- Obtain your business identification number (NIB) and Tax Identification Number (NPWP).
- Secure mandatory and sector-specific licenses based on your co-living business model like food and beverage licenses, entertainment permits, and environmental permits.
- Reserving your business name with the Ministry of Law and Human Rights.
- Meeting the minimum capital requirement of at least IDR 2.5 billion (USD 150,000).
- Prepare and submit the Articles of Association.
- Obtain your business identification number (NIB) and Tax Identification Number (NPWP).
- Secure mandatory and sector-specific licenses based on your co-living business model like food and beverage licenses, entertainment permits, and environmental permits.
- Navigate Tax Considerations– Understanding Indonesia’s tax laws is crucial for business owners to maintain legal operations. You must file taxes and maintain proper financial records for your business operations. Key taxes include:
- Corporate Income Tax.
- Value Added Tax (VAT)- currently 11%.
- Withholding tax on expenses and salaries.
- Local taxes may vary by location and business type.
- Local tax number (NPWPD) once the Pondok Wisata is issued
- Corporate Income Tax.
- Value Added Tax (VAT)- currently 11%.
- Withholding tax on expenses and salaries.
- Local taxes may vary by location and business type.
- Local tax number (NPWPD) once the Pondok Wisata is issued
Emerhub’s local experts can help you set up your PT PMA in Bali and ensure your business complies with Indonesia’s foreign ownership framework. We can manage the formal registration of your accommodation business, secure all mandatory permits and licenses, and oversee your venture’s ongoing compliance.
Securing a Pondok Wisata License for your Co-living Business in Bali
To legally operate a co-living business in Bali, you need to obtain the Pondok Wisata License, also known as the Homestay Operational License. This license allows property owners to offer short-term accommodation, but you must ensure strict compliance with license restrictions:
- You must set up a company (PT PMA) with foreign ownership in Bali.
- The building must have the PBG Building Approval and SLF Building Function certificates before you can obtain the Pondok Wisata license. If these certificates are not yet available, our experts can assist you in securing the building’s compliance.
- Your property must be located in a tourism zone (pink zone) which allows for short-term rentals. It should also have no more than 5 bedrooms.
Navigating these requirements can be challenging for foreign investors. Emerhub simplifies the process by securing the Pondok Wisata License on your behalf.
Practical Considerations for Running a Co-living Business in Bali
While securing the necessary licenses and registrations is essential, there are other practical considerations that you should also apply to your co-living business in Bali. Below, you’ll find essential strategies for setting up a sustainable venture within the industry:
Targeting the Right Market:
- Understanding your target market is key to planning out your co-living venture. Bali’s co-living spaces are primarily targeted at digital nomads, remote workers, and long-term travelers who seek a balance of work and leisure.
- It’s important to address their needs in your accommodation such as flexible stay options (from short-term rentals to long-term rentals), access to high-speed internet, and a conducive environment that fosters social and professional networking.
Conducting a Comprehensive Property Search:
- Bali has diverse regions, each with its appeal– from Ubud’s cultural atmosphere to Canggu’s vibrant digital nomad community. When selecting a property for your co-living business, you must consider factors such as location, land accessibility, and proximity to popular areas.
- This is where professional due diligence services can greatly benefit your search, ensuring the properties you consider align with your long-term business goals and local regulations.
Ensuring Compliance and Legal Operations:
- Following Governor Koster’s 2025 proposal to regulate platforms like Airbnb, you must ensure your business is equipped with the right licenses. You'll have to display your NIB (Business Identification Number) that's aligned with the right KBLI code for your specific setup to avoid being delisted from major booking platforms.
- You must also ensure that your property is located in a designated Tourism Zone (Pink Zone) or Mixed-Use Zone (Orange Zone), as new moratoriums now strictly prohibit commercial developments on agricultural "green zones".
Emerhub’s experts in Bali offer end-to-end services to ensure your business stays compliant from day one. We provide crucial local insights, from conducting detailed property due diligence to managing your full PT PMA incorporation. We also provide ongoing support for tax reporting and legal updates to keep your venture well ahead of any regulatory changes.
Planning to start a co-living venture in Bali? Fill out the form below and we’ll connect you with one of our local experts to kickstart the process!