IMB, PBG, and SLF in Indonesia: What’s the Difference and Why It Matters in 2025
Navigating property regulations in Indonesia, especially for foreign investors and developers, can be complex without the right legal insight. Whether you’re building a home, villa, commercial building, or rental property in Bali or elsewhere in Indonesia, understanding the legal framework around construction and occupancy permits is crucial.
As a trusted legal service in Bali, The Bali Lawyer is here to help you make sense of the evolving rules surrounding IMB (Izin Mendirikan Bangunan), PBG (Persetujuan Bangunan Gedung), and SLF (Sertifikat Laik Fungsi). In this guide, we explain the core differences, purposes, and requirements for each document so you can ensure your project is compliant with Indonesian law.
Understanding the IMB (Building Permit)
Before 2021, the IMB was the primary permit required to construct buildings in Indonesia. It was governed under the Law Number 28 of 2002 regarding Buildings, which required all building owners to obtain an IMB before construction.
What Was the IMB?
The Izin Mendirikan Bangunan (IMB) was a legal document issued by local governments that granted permission to construct a building based on the building’s purpose, structure, and compliance with spatial plans.
Why Was IMB Important?
Without an IMB:
Your construction was deemed illegal.
You risked fines, building demolition, or future legal issues.
You could not apply for utility services like electricity or water.
You had limited rights to sell or lease the property legally.
Transition from IMB to PBG
In 2021, Indonesia introduced a regulatory overhaul under Law Number 11 of 2020 (Omnibus Law) and Government Regulation No. 16 of 2021, which replaced IMB with a new licensing system called the PBG.
What Is the PBG?
Persetujuan Bangunan Gedung (PBG) is the new building approval system that aligns with modern construction and zoning principles. Rather than seeking permission to build, property owners must now submit their design and construction plans for approval to ensure they meet technical and functional requirements.
What Makes PBG Different from IMB?
| Criteria | IMB | PBG |
|---|---|---|
| Nature | Permit-based | Agreement/Approval-based |
| Approval Process | Local government grants permission | Authorities evaluate compliance |
| Basis of Regulation | Law 28/2002 | GR 16/2021 under Omnibus Law |
| Coverage | Limited to permit issuance | Covers entire building lifecycle |
| Submission | Often done manually | Processed digitally via SIMBG portal |
| Focus | Permission to build | Compliance to technical building codes |
What You Need to Know About SLF (Certificate of Feasibility)
Once a building has been constructed in accordance with the approved PBG, a final certification known as SLF (Sertifikat Laik Fungsi) is required before the building can be legally occupied or used.
What Is SLF?
The Sertifikat Laik Fungsi certifies that a building is safe, habitable, and in full compliance with the approved technical and safety requirements. It acts as an operating license for your property, whether residential, commercial, or hospitality-based.
When Is SLF Required?
After the completion of construction as per the approved PBG.
Prior to issuing business licenses or renting out a property.
Before legal transactions like sale or leasing of the property.
SLF Inspection Criteria:
Structural safety
Electrical and fire systems
Emergency exits and access
Environmental impact
Sanitation and plumbing
Summary of IMB vs PBG vs SLF
| Document | Purpose | When You Need It | Issued By | Relevance in 2025 |
|---|---|---|---|---|
| IMB | Permit to build (now obsolete) | Before construction (pre-2021) | Local government | Replaced by PBG |
| PBG | Approval to build according to technical standards | Before and during construction | Local government (via SIMBG) | Mandatory |
| SLF | Certification of proper function & safety | After construction is complete | Local government | Mandatory for legal use |
How Foreigners Are Affected
While foreign individuals cannot directly own freehold land in Indonesia, they can:
Set up a PT PMA (foreign-owned company) to legally acquire leasehold rights.
Enter into Hak Pakai (Right of Use) or Hak Sewa (Leasehold) arrangements.
Engage in construction and development with a registered legal entity.
No matter the ownership structure, foreigners must still comply with building approval regulations by obtaining a PBGbefore construction and SLF afterward.
Why Legal Guidance Matters
The transition from IMB to PBG and the introduction of SLF has added complexity to the property development process. Misunderstanding or missing one requirement could lead to:
Project delays
Regulatory fines
Demolition of non-compliant structures
Inability to legally occupy or lease your property
Working with a knowledgeable legal service like The Bali Lawyer ensures you avoid these risks and navigate the process smoothly from start to finish.
How We Can Help
At The Bali Lawyer, we specialize in assisting foreign and local clients with every aspect of property legality in Bali and across Indonesia. Our services include:
PT PMA registration and licensing
Legal due diligence on land titles
PBG application through SIMBG portal
SLF document processing and inspections
Lease agreements and notary certifications
Full legal advisory for construction and compliance
We stay up-to-date with regulatory changes and offer you clear, step-by-step guidance throughout the building approval process.
Step-by-Step Process to Get PBG and SLF
1. Land Status Check
Confirm zoning and land-use regulations
Ensure your title allows building activity
2. Prepare Design Documents
Architectural plans
Structural and MEP plans
Environmental assessments (if required)
3. Submit via SIMBG
Use the official online system to submit applications
Track status and respond to technical corrections
4. Approval and Construction
Once the PBG is issued, you may begin construction
5. SLF Application After Construction
Engage certified inspectors to verify completion
Submit test results and photos
Receive your SLF for lawful use
Common Questions About IMB, PBG, and SLF
Is IMB still valid in 2025?
No. IMB is no longer issued. If you already have one, it may still be recognized, but any new application must go through the PBG system.
Can I get a PBG and SLF as a foreigner?
Yes, but you must do so through a legal entity such as a PT PMA or under a lease/Right of Use with proper legal support.
What happens if I build without a PBG?
Your structure may be declared illegal. You may be fined or forced to demolish it, and you will not receive an SLF for use.
Can I operate a villa business without an SLF?
No. SLF is mandatory before legally operating or leasing the property for business.
Don’t Risk Your Investment
Whether you are planning to build a private villa, operate a homestay, or develop a commercial building, ensuring your legal compliance from start to finish is essential. The regulatory landscape in Indonesia continues to evolve, and staying ahead with proper legal backing will save time, money, and avoid headaches.