Understanding the Yellow Zone in Bali: What It Means for Property and Land Use
If you’re considering purchasing, leasing, or developing land in Bali, understanding the local zoning system is crucial. One of the most commonly asked questions we receive at The Bali Lawyer is: What is the Yellow Zone in Bali?
Zoning classifications in Bali directly impact what you can legally do with a piece of land. Without clarity on this, investors and property buyers risk facing legal issues, permit denials, or financial loss. In this article, we provide a complete guide to the Yellow Zone in Bali—what it is, how it works, and what you must know before making any land-related decisions.
What Are Land Zones in Bali?
Before diving into the specifics of the Yellow Zone, it’s important to understand that Bali’s land is regulated by a spatial planning system, locally referred to as the RTRW (Rencana Tata Ruang Wilayah). This system outlines what each parcel of land can legally be used for. The government has divided the island into color-coded zones to manage development and sustainability.
Each color represents a type of permitted activity, such as:
Green Zone: Agricultural land, strictly protected from development
Red Zone: Commercial and industrial use
Purple Zone: Reserved for special developments
Blue Zone: Public facilities or infrastructure
Yellow Zone: Residential development (this is our focus here)
Each zoning color comes with its own regulations, limitations, and processes for permit approvals. Misunderstanding these can lead to costly mistakes.
What Is the Yellow Zone in Bali?
The Yellow Zone in Bali is designated primarily for residential use. This zoning classification allows for the development of homes, private villas, and certain small-scale commercial activities related to residential living.
In practical terms, land in the Yellow Zone is legally permitted for building private houses or long-term residential villas. This makes it one of the most attractive zones for both Indonesian citizens and foreigners seeking to invest in or live in Bali.
However, while the Yellow Zone is more flexible than protected Green Zones, it still comes with specific legal guidelines you must follow.
What Activities Are Allowed in the Yellow Zone?
The Yellow Zone is generally suitable for the following:
Residential housing
Private villas
Long-term lease villas
Home offices (subject to permit types)
Small guesthouses (limited capacity)
Community-based lodging (with local permits)
Larger commercial operations, such as hotels, restaurants, and event venues, are not permitted unless additional zoning changes or permits are approved through a legal process.
Why Is Yellow Zone Land So Popular?
Legality for Building: Unlike agricultural or green zones, Yellow Zone land can be legally developed for housing purposes.
Permit Approval: Easier to obtain building permits (now known as PBG) and related infrastructure licenses.
Foreign Investor Interest: Foreigners can lease Yellow Zone land legally under long-term agreements, often through Hak Sewa (leasehold rights) or via a PT PMA (foreign-owned company) structure.
Urban Expansion: Many areas of Bali, such as Canggu, Umalas, Sanur, and parts of Ubud, include Yellow Zones expanding due to increased residential development.
What Permits Are Required to Build in a Yellow Zone?
Building in the Yellow Zone still requires legal compliance. You must apply for the following:
PBG (Persetujuan Bangunan Gedung): This is the replacement for the former IMB permit and is essential to start construction legally.
Environmental Impact Approvals: Depending on the size and location of your project.
Zoning Certificate: An official confirmation of the land’s zoning status.
Land Use Permit (if needed): Especially if combining residential use with small-scale business.
At The Bali Lawyer, we handle all of the above on your behalf, ensuring your building complies with Bali’s current laws.
Can Foreigners Build in the Yellow Zone?
Yes, but there are specific legal structures you must follow:
Leasehold (Hak Sewa): A foreigner can lease land for up to 25 years (renewable), and build a residence for personal use or for rental (if permitted).
Hak Pakai (Right to Use): This right allows foreigners to legally use residential land under specific conditions, usually obtained through government-issued permits.
PT PMA (Foreign-Owned Company): If you want to operate a business or own property commercially, setting up a PT PMA is the legal route. This entity can acquire land and operate legally in Indonesia, including in Yellow Zones if permitted.
What Are the Legal Risks of Ignoring Zoning?
Failing to comply with zoning laws can lead to:
Permit denials for construction or renovation
Hefty fines from local authorities
Forced demolition of illegal structures
Legal disputes with neighbors or government agencies
Problems when selling or transferring ownership
That’s why verifying zoning and working with legal professionals like The Bali Lawyer is essential before committing to any land transaction in Bali.
How to Verify If Land Is in the Yellow Zone
To legally verify if a property is in the Yellow Zone, follow these steps:
Obtain a Copy of the Land Certificate (Sertifikat Tanah)
This includes key data but does not specify zoning.Check the RTRW Map with Local Government
Submit a request with the planning office (Dinas Tata Ruang) along with land coordinates.Request a Zoning Statement Letter (Keterangan Rencana Kota)
This official letter confirms the zoning type and permitted use.Hire a Professional Legal Service
Our team at The Bali Lawyer handles all these steps efficiently and in compliance with Indonesian law.
Yellow Zone vs Green Zone: Key Differences
| Feature | Yellow Zone | Green Zone |
|---|---|---|
| Permitted Use | Residential | Agricultural only |
| Can Build a House? | Yes | No (except for farming support structures) |
| Can Get Building Permit? | Yes (PBG approval possible) | No |
| Suitable for Business? | Limited (home-based or villa rentals) | No |
| Long-term Lease Options? | Yes | Risky and potentially illegal |
Can You Convert Green Zone to Yellow Zone?
Technically, rezoning land from Green to Yellow is possible but extremely difficult and time-consuming. It involves:
Submitting proposals to local and provincial governments
Environmental reviews
Public consultations
Long legal processing time
Most individuals or investors do not succeed in rezoning unless it aligns with new government spatial plans. We strongly advise choosing land already classified as Yellow Zone to avoid risk.
Areas in Bali with Notable Yellow Zones
Some regions in Bali are known for having Yellow Zones ideal for residential projects:
Canggu: Rapid development and strong villa rental market
Umalas: Quiet residential area with international schools
Sanur: Popular among retirees and families
Kerobokan: Residential and home business activity
Pecatu/Uluwatu: Residential areas with sea view investments
Ubud (certain parts): Villas and retreat-style developments
Our legal team can check the zoning of any land you’re interested in across all regencies in Bali.
Why Work with The Bali Lawyer?
At The Bali Lawyer, we offer:
Expert zoning and land use verification
Full due diligence reports
Legal assistance for property purchase or lease
Permit and PBG application support
Legal representation for foreigners
Transparent legal advice in English
We are based in Bali and fully understand the complexity of local zoning laws and how they affect your investment or development plans.
Zoning is more than just a formality. It determines the legality of everything you do on your property—from construction to business operations. The Yellow Zone in Bali is one of the most favorable areas for residential development and villa projects, but only when you follow the legal process.
Don’t take chances. Let the professionals handle your zoning checks, permits, and property transactions.