Building or operating a building in Indonesia such as in a tourist area like Bali Island, you should understand the legal regulations. There are two important documents that you should pay attention to. The first is PBG (Building Approval) and SLF (Certificate of Functional Worthiness). These two certificates can ensure that your building has met the standards in Indonesia and is safe and legal to operate.
Here we will explain in simple terms what and why you need these two documents..
Meaning of PBG – Persetujuan Bangunan Gedung. PBG is the new name of what was formerly known as IMB (Izin Mendirikan Bangunan). Since 2021, when the Indonesian Omnibus Law was enforced, PBG has become a compulsory building approval letter.
What is PBG?
PBG is a legal permit from the local government regarding the granting of building permits, modifications, or renovations. This permit ensures your plan complies with technical building codes, environmental issues, zoning regulations, and future safety measures.
Why is it important?
- Legalizes your building project.
- Avoids fines, demolition warrants, or legal battles.
- Required for acquiring business licenses (e.g., hotel, restaurant, or event space licenses).
- Required for obtaining utility connections like electricity and water.
PBG is used for new and altered buildings, whether constructing a resort in Uluwatu or renovating a private villa in Ubud.
Understanding SLF – Sertifikat Laik Fungsi
Once the building is finished and ready for use, the process continues to obtain the SLF.
What is SLF?
SLF stands for Sertifikat Laik Fungsi, or Certificate of Feasible Functionality. A certificate confirms that a finished building is safe, functional, and meets the approved design (PBG).
Why is SLF important?
- It allows you to operate your business or occupy the property lawfully.
- Required in applying for other permits (e.g., rental permits or operational permits for a business).
- The SLF takes effect for 5 years for business premises and 20 years for residential houses but needs to be renewed periodically.
- Required in finance, insurance, and asset valuation.
Key Differences Between PBG and SLF
| Criteria | PBG | SLF |
| Purpose | Approval to build or renovate | Certification of building’s usability |
| When it’s issued | Before construction begins | After construction is complete |
| Issued by | Local/regional government | Local/regional government |
| Legal necessity | Mandatory for legal construction | Mandatory to legally operate or occupy |
Why Foreigners Ought to Care
Foreign investors and property developers in Bali, Lombok, or Sumba often overlook these essential steps, especially when navigating a new legal environment. Whether you’re building a glamping resort, villa complex, coworking space, or café, failing to obtain a valid PBG and SLF can result in heavy consequences, including fines, project shutdowns, or difficulties getting operational permits.
Need Assistance with PBG and SLF in Bali?
It may be challenging to handle Indonesian construction codes, especially with the language problem and bureaucracy. That is why having a savvy and experienced consulting ally is what is most important.
ILA Global Consulting has expertise in assisting foreign individuals and businesses in procuring PBG and SLF in Bali and throughout Indonesia. From zoning inspections and bureaucracy to dealing with the local regulators, we guide you through this process with transparency and professionalism.
Struggling with how to have your building legally approved in Bali? Dial ILA Global Consulting today for trusted assistance with PBG and SLF submissions. We’ll make things easy for you to build your dreams.
