Built to Scale: Sports and Recreation Investment in Indonesia

Indonesia’s sports economy was confirmed at IDR 39.5 trillion in 2024, with the sector projected to grow at 5 to 7 per cent annually through 2026 and beyond. Padel is growing fast enough that Indonesia now ranks 29th globally among the sport’s fastest-growing markets, with breakeven periods for court operators cited at 1.5 to 2 years. The investors who will build durable commercial positions in this sector are the ones who build the PT PMA enterprise correctly from the day the first facility opens, with the governance architecture already in place before commercial obligations begin.

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The Sector the Data Describes

Indonesia’s middle class of 141 million has changed its relationship with physical activity. Walking, running, aerobics, and recreational sport are the dominant contributors to the national sports economy. The most recently confirmed figure, presented at the Indonesia Sports Summit in December 2025, placed the sports economy at IDR 39.5 trillion in 2024, representing approximately 0.19 per cent of GDP. Market research houses typically publish confirmed annual valuations with a twelve to eighteen month lag, meaning a confirmed 2025 figure is expected later in 2026. The sector is projected to grow at 5 to 7 per cent annually, placing the estimated 2026 market value in the range of IDR 43 to 45 trillion, though this is a derived projection rather than a confirmed figure. The growth reflects a consumer demographic that has the income, the lifestyle aspiration, and the peer community to sustain active participation as a daily habit.

Padel illustrates the sector’s commercial intensity. Garmin’s 2025 fitness tracking data recorded a 1,684 per cent increase in padel activities in Indonesia, the highest growth rate of any sport on the platform in the year. The Indonesia Padel Report 2025 confirmed over 1,580 new courts built during the same period, a 295 per cent increase in clubs. New courts continue opening across Jakarta at a pace that has prompted a regulatory response: in May 2025, Jakarta introduced the Pajak Barang dan Jasa Tertentu, or PBJT, a local entertainment tax explicitly listing padel courts as taxable objects under regional regulation.

“When we opened, it was like an instant tsunami of players.”

Toni Montesanti, co-founder, Jungle Padel Bali

The tax replaces VAT for court rental activities and is administered by the relevant municipal or regency government rather than the Directorate General of Taxes. An operator treating padel court rental income as VAT-applicable, rather than PBJT-applicable, is applying the wrong tax instrument to that revenue stream. The applicable tax rate and administrative procedure must be confirmed at the regency or city level where each facility operates, since PBJT is a local government instrument and its parameters vary by jurisdiction.

The broader sport and recreation picture extends well beyond padel. Movement studios, endurance training programmes, surf performance facilities, pickleball, climbing centres, aquatic sport services, and community recreation clubs are all growing in commercial relevance, driven by the same demographic and lifestyle fundamentals. Bali’s concentration of internationally educated residents, its active outdoor culture, its endurance event calendar, and its wellness tourism positioning create a particularly dense demand environment for each of these categories. The investor who structures a sport or recreation enterprise correctly in Bali in 2026 as a PT PMA is entering a market with confirmed demand, active competitors, and a regulatory framework that rewards correct structure and penalises informal operation.

The KBLI Framework for Sports and Recreation

The Klasifikasi Baku Lapangan Usaha Indonesia, or KBLI, is Indonesia’s Standard Business Classification system. The KBLI 2025 framework, introduced under Badan Pusat Statistik, or BPS, Regulation No. 7 of 2025, classifies sport and recreation activities across several codes that determine the applicable risk level, the licensing sequence, and the foreign ownership position for each enterprise type. The selection must be made with precision before the notary appointment, because the code determines every subsequent regulatory step.

The following table maps the principal KBLI codes applicable to sport and recreation investment in Indonesia. The ownership column is consequential and must be verified against the current OSS investment restriction position before incorporation.

KBLI Code	Activity Description	Foreign Ownership	Key Licensing Requirement
93113	Arena Facilities: indoor and outdoor sports venues and facilities; appropriate KBLI for foreign-invested padel courts and similar arena-format sport facilities	Open to foreign investment	NIB, PBG, SLF; TDUP and SUP where facility is on tourism-zoned land or serves tourist clientele
93114	Field Facilities: golf, badminton, volleyball, basketball, and tennis	Foreign investment prohibited under KBLI 2025	Domestic investors only
93120	General sports club activities and membership-based recreation	Confirm at OSS	NIB, SLF; Dispora recommendation where applicable
93132	Sports coaching and athlete development	Confirm at OSS	NIB; foreign coach employment requires RPTKA and KITAS
93249	Water sport and aquatic recreation activities	Open to 100% foreign ownership	NIB, Environmental Commitment Statement, six-month monitoring reports
93190	Other sport and recreation activities: movement studios, fitness programmes, specialist training	Confirm at OSS	NIB, SLF; activity-specific permits where regulated

Under KBLI 2025, foreign investment is prohibited across all activities within KBLI 93114, which covers Field Facilities including golf, badminton, volleyball, basketball, and tennis. This prohibition applies regardless of the specific activity and was introduced with the KBLI 2025 framework promulgated under BPS Regulation No. 7 of 2025 on 17 December 2025. Advisory content published before that date, including several widely cited articles by Indonesian law firms and business consultancies, continues to recommend KBLI 93114 for padel courts without noting the foreign investment restriction. That guidance was accurate under KBLI 2020 and is no longer applicable.

Foreign-invested padel court enterprises and similar enclosed arena-format sport facilities are registered under KBLI 93113, Arena Facilities. KBLI 93113 covers the provision of indoor and outdoor sports venues whose primary activity is the management and operation of the arena facility itself. A padel court, as a purpose-built enclosed sport facility, fits within the Arena Facilities classification. Domestically-owned padel operations register under KBLI 93114 and follow the standard domestic investor pathway for Field Facilities.

The ownership distinction must be confirmed against the current OSS investment restriction position for KBLI 93113 and the applicable Dispora recommendation requirement at the regency or city level before the notary appointment. The PBG and SLF requirements apply under both codes as building compliance instruments independent of the business licensing classification.

Tourism Business Registration and Standard Certificate

A sport or recreation facility operating on tourism-zoned land, or whose business type and clientele place it in the tourism sector classification under Law No. 10 of 2009 on Tourism, is a tourism business. This classification activates a licensing sequence that runs parallel to and beyond the KBLI business licensing pathway.

The trigger for the TDUP and SUP requirement is the intersection of two conditions: the land is zoned for tourism purposes, and the business type and clientele are classified as tourism-related. A padel court on tourism-zoned land in Bali serving tourists and international residents satisfies both conditions. An enterprise that obtains a NIB and commences operations without initiating the TDUP and SUP sequence is operating in a tourism business category without the required tourism business registration and standard certification.

The Dispora, the provincial sports office, may require a recommendation for public or community-facing sport facilities. This recommendation typically requires submission of facility layouts, technical designs, and neighbourhood approvals. The requirement is applied in practice by local authorities at their discretion and must be confirmed at the regency or city level for each facility location.

The Single Facility and the Scalable Enterprise

The registration question for a padel court, gym, or recreation club is straightforward to resolve through standard advisory. The more commercially significant question is less often addressed: how do you build a sport enterprise that can operate at a second facility, a fifth, and a tenth, with consistent brand standards, enforceable quality governance, and a commercial structure that protects the founding enterprise when things go wrong at a licensed location?

The answer is in the enterprise’s governance architecture.

A single sport facility needs a KBLI, a NIB, a PBG, an SLF, and an employment structure for its staff. These are achievable with standard PT PMA establishment advisory. A scalable sport enterprise needs all of those, and it also needs a company constitution that defines the governance framework, a shareholders agreement that governs the relationship between investors and defines what happens when a shareholder wants to exit, a director authority framework that allows management to operate when the founding principal is not present, a brand licensing structure that allows the enterprise’s methodology to be deployed by third-party operators under a defined standard, and an audit infrastructure that makes brand compliance measurable and enforceable rather than aspirational.

The governance failure mode in sport enterprise expansion is consistent across every sector that has attempted to scale through licensing or franchising without building this infrastructure first. A licensee may depart from brand standard when the licence agreement does not define that standard with sufficient specificity. An equity participant may dispute their terms when the agreement did not anticipate the scenario that arose. A new facility may be built to a specification that does not reflect the enterprise’s operational requirements because the construction agreement was not drafted around them. Each of these failures is a governance document failure, not a commercial or operational one. The enterprise that builds the governance architecture before it needs it avoids every one of them.

The Jungle Padel Case Study

TraceWorthy has worked with Jungle Padel Bali for several years, building the governance architecture that has enabled the enterprise to scale. The engagement is publicly known and the scope illustrates what a complete governance stack for a scaling sport enterprise looks like in practice.

Company Constitution

The constitutional layer establishes the enterprise’s governance framework before commercial relationships create obligations that the documents do not yet cover. TraceWorthy developed and implemented Jungle Padel’s company constitution, shareholders agreement, and director statement. The company constitution defines the enterprise’s internal governance rules. The shareholders agreement governs the relationship between investors: entry, dilution, voting rights, exit mechanisms, and the dispute resolution pathway when shareholder interests diverge. The director statement establishes the authority and accountability framework for operational management, including what decisions require shareholder approval and what decisions the director may take independently.

A sport PT PMA with multiple shareholders, expansion intentions, and a brand licensing model requires constitutional provisions that anticipate the governance questions that expansion raises. A company constitution drafted for a single-owner single-facility business will not address those questions.

Ability to Scale and Replicate

The equity participation agreement structures the investment relationship between Jungle Padel and the investors who participate in individual facility capital structures. The management services agreement governs the operational oversight relationship between the central entity and each facility operator. The facility construction agreement ensures that new facilities are built to the specification the brand and operational system requires.

Operational Consistency

The operational layer codifies the enterprise’s methodology in a form that is transferable, trainable, and auditable. TraceWorthy developed Jungle Padel’s operations manual, marketing and customer service manual, and facility maintenance manual. These documents are the medium through which the enterprise’s standards are communicated to new operators, new staff, and new facilities.

The 600-point service level audit tool is the quality enforcement mechanism that makes the brand licensing agreement’s brand standard provisions measurable. Without a defined, quantified standard assessed against a confirmed protocol, a licensor’s right to enforce brand compliance is contractually difficult to exercise. A licensee who knows that a specific audit tool with 600 defined service points will be applied at each facility assessment has a concrete and specific understanding of what compliance requires. The tool is deployed by TraceWorthy for Jungle Padel’s routine assessment of licensed facility standards, and it is made available to licensed facilities for self-assessment prior to the complete audit. It functions simultaneously as a quality governance mechanism for the licensor, a preparation tool for the licensee, and a due diligence instrument for any investor or acquirer evaluating a facility.

“It’s a good feeling to see what we’ve built running so well.”

Robin Ekman, co-founder, Jungle Padel Bali

The tool’s application is not confined to padel. TraceWorthy has deployed the service level audit methodology at Handara Golf Resort, where a complete facility audit informed the investment decisions required to raise service standards to the target level. The same tool has been applied to star hotels, restaurants, and tourist attractions, demonstrating that the methodology transfers across any hospitality, sport, or experiential facility where service delivery can be broken down into measurable standards and assessed against a defined protocol.

Strategic Direction

The ongoing advisory layer covers the operational compliance and strategic advisory dimensions of Jungle Padel’s expansion. TraceWorthy advises on the employment structure for foreign coaches under the RPTKA, IMTA, and KITAS chain described in the education and skill-transfer article in this series. It manages brand licensing breach situations when a licensee departs from the standard the audit tool defines and the brand licensing agreement requires. It has performed land due diligence on sites for new facilities and developed a methodology for assessing independent sports club operators as competitive acquisition targets or consolidation opportunities in strategic Jakarta locations.

That acquisition assessment methodology combines TraceWorthy’s land due diligence capability, the operational audit methodology, and commercial analysis of the target operator’s market position, structural quality, and vulnerability to displacement. The assessment produces an informed view of whether acquisition, partnership, or competitive entry represents the better expansion strategy for a specific location. For a brand-licensing sport enterprise expanding into Jakarta’s increasingly competitive padel and recreation market, this intelligence is operationally consequential.

Share Transactions in Private Sport Enterprises

Jungle Padel’s expansion involves two types of share transaction operating simultaneously, and an understanding of the regulatory framework governing each is required by any investor considering participation.

Primary shares are newly issued by Jungle Padel or its brand licensees to raise capital for expansion. The capital raised flows to the issuing company. This is a standard capital raise in a growing private enterprise.

Secondary shares are existing shares being sold by founding shareholders seeking a partial capital return while retaining ongoing participation. The capital flows to the selling shareholders, not to the company. A contracted third party, specifically accredited for this purpose, markets and facilitates these transactions to both institutional and retail investors.

This distinction is consequential for the investor’s due diligence approach. A private company equity transaction does not carry the prospectus disclosure requirements applicable to public offerings of listed securities. The investor’s protection derives from the share sale agreement, the representations and warranties the selling shareholder provides, the constitutional documents of the company, and the due diligence the investor conducts on the enterprise’s operational and financial position before committing capital. An investor who approaches a private company equity transaction without these instruments, relying instead on the regulatory disclosure framework of a listed securities offering, is relying on a framework that does not apply.

TraceWorthy’s advisory scope in Jungle Padel’s share transactions covers the corporate governance dimension, specifically the drafting of share sale agreements, the transfer mechanics, the shareholder agreement implications of new entry and partial exit, and the securities law compliance dimension for the offering structure. The constitutional documents TraceWorthy developed for the enterprise govern the mechanics of how shares may be transferred, what shareholder approval is required, and what rights are affected by a transfer.

Foreign Coach and Instructor Employment

A sport or recreation enterprise employing foreign coaches and instructors requires a three-step authorisation sequence. The Rencana Penggunaan Tenaga Kerja Asing, or RPTKA (Expatriate Utilisation Plan), is approved by the Ministry of Manpower and names the sponsoring employer, the position, and the basis on which a foreign national is required. The Izin Mempekerjakan Tenaga Kerja Asing, or IMTA (Work Permit for Foreign Workers), is issued against the approved RPTKA. The Kartu Izin Tinggal Terbatas, or KITAS (Limited Stay Permit), authorises residence in Indonesia for the permit’s duration, anchored to the specific employment relationship. The same RPTKA, IMTA, and KITAS sequence described in the education and skill-transfer article in this series applies in full to sport and recreation enterprises. The sponsoring entity is the facility. The RPTKA describes the coaching or instructor role and establishes the basis on which a foreign national with the relevant qualification, certification, and experience is required. The Ministry of Youth and Sports may be the relevant recommendation authority for certain coaching roles at licensed sport facilities.

The shell company Employment KITAS pattern documented in the education article appears in the sport and recreation sector with identical structure and identical consequence. A foreign surf coach, padel instructor, climbing guide, or movement teacher who carries an Employment KITAS sponsored by an entity with no genuine operations and teaches at a facility that has no documented relationship with that entity is in a non-compliant position whose enforcement consequence is deportation, fines, and blacklisting. TraceWorthy has extracted professionals from this arrangement in the sport sector as in the education sector, and the remediation process is the same.

Pre-Establishment Verification

The following sequence applies to any sport or recreation enterprise before incorporation. The sequence applies to both a single-facility establishment and a multi-facility enterprise, with the governance documentation requirements being proportionally more significant for the latter.

KBLI identification by activity type is the first determination. Court sports, general sports club activities, coaching and athlete development, water sports, and movement and fitness activities each carry different KBLI codes with different risk classifications and different operational permit requirements. The correct five-digit code must be confirmed against the OSS investment restriction position before the notary appointment.

The Dispora recommendation assessment must be completed before the NIB application where the facility is public-facing or community-serving. The requirement varies by regency and city and must be confirmed locally.

The PBG and SLF sequence applies to every facility that involves construction, conversion, or change of use. An existing building being converted for sport facility use requires a PBG amendment and SLF confirming the building’s suitability for the intended sport activity, the occupancy load, and any specific structural or safety requirements for that activity.

The PBJT position must be confirmed at the regency or city level before the facility opens. Court rental income in Jakarta is subject to PBJT as a local entertainment tax replacing VAT. The applicable rate and registration procedure in Bali and other locations must be confirmed with the local revenue authority before the first rental invoice is issued.

The governance documentation suite must be prepared in parallel with the PT PMA establishment for any enterprise with multi-facility or licensing intentions. The company constitution, shareholders agreement, director authority framework, and the initial draft of the brand licensing agreement are most efficiently prepared before commercial relationships with potential licensees or equity participants begin. Preparing them after the first licensing discussion has started means negotiating governance terms under commercial time pressure, which typically produces weaker documents.

The employment structure for foreign coaching staff must be confirmed before any foreign coach is engaged. The RPTKA, IMTA, and KITAS sequence applies to every foreign national whose role involves delivering professional coaching, instruction, or training services at the PT PMA facility.

How TraceWorthy Structures the Investment

TraceWorthy provides advisory support across the full investment lifecycle for sport and recreation enterprises in Indonesia, from single-facility establishment through brand licensing system design and ongoing governance.

For a single facility establishment, the engagement covers KBLI verification and PT PMA establishment, PBG and SLF management, Dispora recommendation coordination where required, PBJT registration advice, the TDUP and SUP tourism licensing sequence where the facility is on tourism-zoned land or serves tourist clientele, and the employment structure for any foreign coaching staff.

For an enterprise with scaling intentions, the engagement extends to the governance documentation suite: company constitution, shareholders agreement, director statement, brand licensing agreements, equity participation agreements, management services agreements, and facility construction agreements. These documents are developed from first principles for the specific PT PMA, the specific multi-party structure, and the specific commercial model, not adapted from generic templates.

The operational manual and service level audit tool development is a specific TraceWorthy advisory product for sport enterprises intending to operate through licensed facilities. The 600-point service level audit framework provides the brand licensing agreement with a measurable and enforceable standard. The audit is facilitated by TraceWorthy and produces a formal report that the licensor can act on when standards are not met.

For enterprises considering expansion through acquisition or market consolidation, TraceWorthy’s acquisition assessment methodology for independent sport club operators provides the intelligence required to evaluate each target location: the operational audit of the existing operator, the land due diligence on the site, and the commercial analysis of the acquisition versus new-entry decision.

Where share transactions are involved, TraceWorthy advises on the corporate governance dimension, the share sale documentation, the shareholder agreement implications, and the securities law compliance framework for the offering structure.

The employment advisory covering foreign coach RPTKA, IMTA, and KITAS management is an ongoing service for enterprises with foreign professional staff. The brand licensing breach advisory covers the assessment of licensee non-compliance, the enforcement pathway under the brand licensing agreement, and the remediation or termination sequence where the breach is not resolved.

Conclusion: The Governance Advantage

Indonesia’s sports economy is growing and the demand environment for padel, movement, surf, climbing, aquatic, and community recreation enterprises in Bali and across the archipelago is commercially confirmed. The investor who builds a single facility with a correct compliance structure has a good business. The governance structure built at incorporation determines what the enterprise can become. A PT PMA built with constitutional documents, shareholder framework, brand licensing architecture, and audit infrastructure has a scalable foundation that a facility without those instruments cannot replicate.

TraceWorthy works with sport and recreation investors at every stage of this process.

If you are establishing a first sport or recreation facility in Indonesia, the starting point is KBLI verification, PBG and SLF planning, PBJT position confirmation, and the governance documentation that will support future expansion before the facility opens.

If you have an existing sport enterprise and are planning to license your brand or model to third-party operators, the governance documentation suite and the service level audit tool must be in place before the first licensing discussion becomes a signed agreement.

If you are considering the acquisition of an existing sport operation or a market consolidation strategy across multiple locations, TraceWorthy’s acquisition assessment methodology provides the operational, legal, and commercial intelligence the decision requires.

Schedule an appointment with TraceWorthy’s consulting team.

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Glossary of Indonesian Terms

Indonesian Term	Abbreviation	English Translation or Explanation
Badan Pusat Statistik	BPS	Statistics Indonesia; the central government body that publishes official statistics and issues the KBLI classification system
Dinas Pemuda dan Olahraga	Dispora	Provincial Sports and Youth Office; the local government authority that may issue recommendations for public or community-facing sport facilities
Izin Mempekerjakan Tenaga Kerja Asing	IMTA	Work Permit for Foreign Workers; issued by the Ministry of Manpower against an approved RPTKA, authorising a named foreign national to work for a specific employer in a specific role
Kartu Izin Tinggal Terbatas	KITAS	Limited Stay Permit; the identity card issued to foreign nationals authorising temporary residence in Indonesia; for employment-based KITAS, the permit is anchored to the employment relationship established by the RPTKA and IMTA
Klasifikasi Baku Lapangan Usaha Indonesia	KBLI	Standard Indonesian Business Classification; the government-issued code system that classifies every business activity in Indonesia and determines the applicable licensing pathway, foreign ownership position, and regulatory authority
Lembaga Sertifikasi Usaha Pariwisata	LSU Pariwisata	Tourism Business Certification Institution; an accredited independent body licensed to conduct audits of tourism businesses and issue the Sertifikat Usaha Pariwisata; operates under licensing from the Ministry of Tourism and Creative Economy and conducts initial certification audits as well as annual surveillance audits for the duration of the certificate’s validity
Nomor Induk Berusaha	NIB	Business Registration Number; the primary business licence issued through the OSS system, serving as proof of enterprise registration and the administrative entry point for most licensing sequences
Online Single Submission	OSS	The Indonesian government’s integrated online business licensing system through which NIB registration, KBLI classification, and most business licences are obtained
Otoritas Jasa Keuangan	OJK	Financial Services Authority; the Indonesian government body that regulates the capital market, banking, and financial services sectors, including listed securities transactions
Pajak Barang dan Jasa Tertentu	PBJT	Tax on Certain Goods and Services; a local government tax that replaced VAT for specified commercial activities, including padel court rental income in Jakarta as of May 2025; administered and collected by the relevant regency or city government
Perseroan Terbatas	PT	Limited Liability Company; the standard Indonesian corporate entity
Perseroan Terbatas Penanaman Modal Asing	PT PMA	Foreign Capital Investment Limited Liability Company; the Indonesian entity structure available to foreign investors, requiring a minimum investment threshold and subject to the foreign ownership restrictions applicable to the enterprise’s KBLI classification
Persetujuan Bangunan Gedung	PBG	Building Approval; the government permit issued for the construction, renovation, or change of use of a building, confirming that the proposed works comply with applicable building and spatial planning standards
Rencana Penggunaan Tenaga Kerja Asing	RPTKA	Expatriate Utilisation Plan; the Ministry of Manpower approval that names the sponsoring employer, describes the position, and establishes the basis on which a foreign worker is required; the foundational authorisation in the foreign worker employment sequence
Sertifikat Laik Fungsi	SLF	Certificate of Worthiness; issued following assessment that a building meets the standards required for its intended use category; required before any building may be lawfully occupied or operated for its designated purpose
Sertifikat Usaha Pariwisata	SUP	Tourism Business Standard Certificate; issued by the Ministry of Tourism and Creative Economy through the local DPMPTSP following assessment of the facility against the applicable service, safety, and operational standards for its specific tourism activity category; required as the operational certification for tourism businesses after the TDUP is obtained
Tanda Daftar Usaha Pariwisata	TDUP	Tourism Business Registration; the commitment-based business licence for tourism sector enterprises obtained through OSS following NIB issuance; required for any business operating on tourism-zoned land or serving tourist clientele under Law No. 10 of 2009 on Tourism; must be followed by the SUP within the applicable commitment period

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