Bali Villa Licensing for Foreigners: The Definitive 2026 Guide

Last updated: February 2026 · By Bali Property Rules Research Desk

Table of Contents

1. Why Does the March 2026 Deadline Matter for Bali Villa Owners?
2. What Laws Govern Villa Licensing in Bali?
3. What Is the Difference Between a Pondok Wisata and a Villa License?
4. Why Can’t Foreigners Hold a Pondok Wisata License?
5. How Does a PT PMA Enable Foreign Villa Rental in Bali?
6. What Are the Steps to License a Villa in Bali?
7. What Zoning Does a Bali Villa Need for Licensing?
8. What Tax Obligations Apply to Licensed Villa Operators?
9. What Are the Penalties for Operating Without a Villa License?
10. Frequently Asked Questions
11. Sources and References

Why Does the March 2026 Deadline Matter for Bali Villa Owners?

Indonesia’s Ministry of Tourism is coordinating with online travel agencies (OTAs) to enforce a March 31, 2026 deadline: all short-term rental properties listed on Airbnb, Booking.com, and Expedia must have a verified NIB (Nomor Induk Berusaha — Business Identification Number). Properties without a verified NIB face delisting from these platforms.

The enforcement mechanism is OTA-driven before it is government-driven. Rather than sending inspectors door-to-door, the government is leveraging the platforms themselves. Once the deadline passes, Airbnb, Booking.com, and Expedia are expected to remove non-compliant listings — effectively shutting off the primary booking channel for unlicensed operators.

Throughout 2025, the Ministry held a “Tourism Business Licensing Coaching Clinic” to help operators understand the registration process and prepare for the new requirements. The government also published a press release clarifying there is “no ban on OTAs” — the focus is on ensuring all tourism businesses have proper registrations, not on restricting platforms.

The current period is effectively a grace period. Enforcement is expected to escalate significantly after March 31, 2026. However, it is important to understand that even if OTA enforcement is delayed, the regulatory requirements already exist under Permenpar 18/2016 — operating without a TDUP (Tanda Daftar Usaha Pariwisata — Tourism Business Registration) has always been illegal.

This affects an estimated 39,000+ Airbnb listings in Bali, the majority of which may lack proper licensing. The scale of non-compliance suggests that enforcement — whether through platform delisting, government action, or both — will have significant market impact. This guide provides a comprehensive deep-dive into villa licensing; for a broader overview of short-term rental rules, see our short-term rental compliance guide.

What Laws Govern Villa Licensing in Bali?

Bali villa licensing operates under a hierarchy of national laws, government regulations, and ministerial regulations. The key regulation is Permenpar No. 18 Tahun 2016 (Tourism Business Registration), which defines the legal categories for accommodation businesses, registration requirements, and sanctions for non-compliance.

Understanding the regulatory hierarchy is essential because different levels of law carry different authority. A ministerial regulation implements the provisions of its parent law — and if the parent law changes, implementing regulations may be amended or replaced. Here is how the villa licensing framework is structured:

Base Law

UU No. 10 Tahun 2009 (Undang-Undang tentang Kepariwisataan / Tourism Law) — the foundational law for all tourism businesses in Indonesia. Pasal 15 ayat (2) authorises the Minister to issue implementing regulations that govern tourism business registration and standards. This law establishes the legal basis for licensing, standards, and sanctions.

UU No. 18 Tahun 2025 (Third Amendment to Tourism Law) — updates the framework with “ecosystem-based tourism development” provisions. This amendment reflects Indonesia’s evolving approach to balancing tourism growth with environmental sustainability and community welfare. BPR has a full analysis of UU 18/2025 available.

Implementing Regulation

Permenpar No. 18 Tahun 2016 (Pendaftaran Usaha Pariwisata / Tourism Business Registration) — this is the regulation cited most heavily throughout this guide. It defines TDUP requirements, accommodation categories (including the distinction between Pondok Wisata and Villa), eligibility rules for Indonesian citizens versus foreign investors, and administrative sanctions for non-compliance.

Standards and Risk Classification

Permenparekraf No. 4 Tahun 2021 — sets the standards, oversight procedures, and administrative sanctions for tourism businesses under the OSS-RBA (Risk-Based Licensing) system. This regulation operationalises the transition from the old permit-based system to the risk-based approach, classifying tourism businesses by their risk level and setting corresponding compliance requirements.

Permenparekraf No. 9 Tahun 2014 — the specific Pondok Wisata standards regulation. Defines Pondok Wisata as “usaha perseorangan” (an individual/personal business), reinforcing that this category is not available to corporate entities or foreign nationals.

Related to Foreign Ownership

PP No. 28 Tahun 2025 — governs property rights for foreigners in Indonesia, including Hak Pakai (Right of Use) provisions. This regulation intersects with villa licensing through PT PMA requirements — a foreign-owned company must hold or lease the property under an appropriate land title before applying for a Villa license. BPR’s full analysis is available in our PP 28/2025 guide.

What Is the Difference Between a Pondok Wisata and a Villa License?

Pondok Wisata and Villa are two distinct legal categories under Permenpar 18/2016 with different KBLI codes, eligibility rules, and zoning requirements. The distinction matters because foreigners cannot hold a Pondok Wisata license — only a Villa license through a PT PMA (foreign-owned company).

The table below summarises the key differences between the two license types. Pay particular attention to the “Who Can Hold It” row — this is where most foreign villa owners encounter their first legal obstacle.

Feature	Pondok Wisata (KBLI 55130)	Villa (KBLI 55193)
Legal Definition	“Bangunan rumah tinggal yang dihuni oleh pemiliknya… dimiliki oleh masyarakat setempat” — a residential building inhabited by its owner, owned by local community members (Pasal 1(34), Permenpar 18/2016)	“Penyewaan bangunan secara keseluruhan untuk jangka waktu tertentu… untuk kegiatan wisata” — renting an entire building for tourism (Pasal 1(33), Permenpar 18/2016)
Maximum Bedrooms	Up to 5 bedrooms	No limit specified
Who Can Hold It	Indonesian citizens only (individuals) — per Pasal 4(3), Permenpar 18/2016	PT PMA (foreign-owned company) or local PT — per Pasal 4(4) and Pasal 15(3), Permenpar 18/2016
Owner Residency	Owner must live in the property	Owner need not reside in the property
Zoning	May be permitted in Yellow (Residential) or Pink (Tourism) zones	Requires Pink (Tourism) zone
Purpose	Local economic empowerment — providing homestay experiences for tourists	Commercial accommodation — fully professional tourism operation
Foreign Access	Illegal for foreigners. Nominee arrangements under active crackdown.	The legal path for foreigners via PT PMA.

The original Indonesian regulation text defines both categories precisely. These definitions are worth reading carefully because they explain why the government distinguishes between the two categories:

Pasal 1(34) — Usaha Pondok Wisata:
“Usaha penyediaan akomodasi berupa bangunan rumah tinggal yang dihuni oleh pemiliknya dan dimanfaatkan sebagian untuk disewakan dengan memberikan kesempatan kepada wisatawan untuk berinteraksi dalam kehidupan sehari-hari pemiliknya, yang dimiliki oleh masyarakat setempat dalam rangka pemberdayaan ekonomi lokal.”

Translation: A business providing accommodation in a residential building inhabited by its owner and partially rented out to give tourists the opportunity to interact with the owner’s daily life, owned by local community members for local economic empowerment.

Pasal 1(33) — Usaha Vila:
“Usaha penyediaan akomodasi berupa penyewaan bangunan secara keseluruhan untuk jangka waktu tertentu, termasuk cottage, bungalow, guest house, yang digunakan untuk kegiatan wisata dan dapat dilengkapi dengan sarana hiburan dan fasilitas penunjang lainnya.”

Translation: A business providing accommodation by renting an entire building for a specific period, including cottages, bungalows, and guest houses, used for tourism activities and which may include entertainment and supporting facilities.

Note that Pasal 11 of Permenpar 18/2016 lists all accommodation sub-types: hotel, condo hotel, serviced apartment, camping, caravan, villa, pondok wisata, hotel management, senior housing, rumah wisata, and motel. The villa and pondok wisata categories are just two of many accommodation types, each with its own rules and eligibility requirements.

Why Can’t Foreigners Hold a Pondok Wisata License?

Three provisions in Permenpar 18/2016 block foreigners from holding a Pondok Wisata license. This is not a grey area — the regulation text is explicit, and the Indonesian government is actively cracking down on foreign nominees who attempt to circumvent this restriction.

The three provisions work together to create an airtight legal barrier:

1. Pasal 1(34) — Pondok Wisata is “dimiliki oleh masyarakat setempat” (owned by local community members). Foreigners are, by definition, not local community members. The regulation frames Pondok Wisata as a local economic empowerment tool — its entire purpose is to help Indonesian citizens benefit from tourism, not to provide a vehicle for foreign accommodation businesses.

2. Pasal 4(3) — “Perseorangan sebagaimana dimaksud pada ayat (2) merupakan warga negara Indonesia” — individual registrants must be Indonesian citizens. This closes the door to any foreigner attempting to register a Pondok Wisata as an individual operator.

3. Permenparekraf 9/2014 — defines Pondok Wisata as “usaha perseorangan” (an individual/personal business), reinforcing that it is not available to corporate entities. Since foreigners can only operate through a PT PMA (a corporate entity), and Pondok Wisata is limited to individuals, the corporate path is also blocked for this license type.

The Nominee Workaround — and Why It Fails

Some foreign operators use Indonesian nominees to hold the Pondok Wisata license on their behalf. Under this arrangement, an Indonesian citizen officially registers the business while the foreigner provides capital and manages operations behind the scenes.

This arrangement is illegal and under active crackdown. The Indonesian government has targeted nominee arrangements as part of the 2024–2025 enforcement campaign against unlicensed tourism operators. The consequences are severe:

• The nominee legally owns the license — the government treats them as the lawful operator, not you.
• The foreigner has no legal protection if the nominee decides to claim full ownership of the business or property.
• If discovered, both parties face penalties — the foreigner for operating without authorisation, and the nominee for facilitating an illegal arrangement.
• BPR covers nominee risks in detail in our Nominee Ownership Risks guide.

The Compliant Path for Foreigners

The legal alternative is straightforward, though it requires more initial investment:

1. Establish a PT PMA (foreign-owned company) with the correct KBLI code.
2. Register under KBLI 55193 (Villa) — not KBLI 55130 (Pondok Wisata).
3. Operate as a commercial accommodation business, not a homestay.
4. Ensure the property is in a Pink (Tourism) zone, as required for the Villa classification.

BPR’s PT PMA guide covers the full company setup process, including capital requirements, KBLI code selection, and registration timelines.

How Does a PT PMA Enable Foreign Villa Rental in Bali?

A PT PMA (Perseroan Terbatas Penanaman Modal Asing — foreign investment limited company) is the legal vehicle that allows foreigners to hold a villa license in Bali. Per Permenpar 18/2016 Pasal 15(3), foreign capital tourism businesses register via BKPM (Indonesia’s Investment Coordinating Board).

Why PT PMA Is Required

The requirement flows directly from the regulation:

• Permenpar 18/2016 Pasal 4(4): Business entities registering for tourism businesses must be domiciled in Indonesia.
• Pasal 15(3): Foreign capital businesses register via BKPM — the national investment authority that oversees foreign investment.
• The PT PMA’s Articles of Association (Anggaran Dasar) must include the correct KBLI code — 55193 for Villa.
• Full PT PMA setup details, including minimum capital requirements and registration process, are covered in BPR’s PT PMA guide.

Three Operating Models for Foreign Villa Owners

Not every foreign villa owner needs to follow the same structure. There are three main operating models, each with different risk profiles and compliance requirements:

1. Direct commercial operation. The PT PMA directly owns the property (via Hak Pakai or HGB), classifies it as commercial accommodation (KBLI 55193), and operates the villa rental business. The PT PMA pays Pajak Hotel dan Restoran (PHR) on revenue. Under this model, Airbnb is a sales channel for an accommodation service, not a “residential rental.” This is the simplest structure but requires the highest capital commitment.

2. Indonesian company (PT PMDN) as owner/landlord. A domestic company (PT PMDN) legally owns and rents out the property using a villa or accommodation KBLI code. More KBLI options are available to domestic companies than to PT PMA entities. The foreign investor holds shares in the PT PMDN where permitted under the Positive Investment List, or uses a profit-sharing arrangement. This model can offer more flexibility but adds structural complexity.

3. Management company model (most popular for foreigners). An Indonesian individual or PT PMDN owns the property. The foreigner’s PT PMA operates as a villa management company — handling marketing, bookings, guest services, and maintenance. The PT PMA earns a management fee, not rental income. This model reduces the risk of “illegal landlord” claims and better aligns with foreign investment regulations because the PT PMA provides a service rather than acting as a property owner.

KBLI Codes for Accommodation Businesses

The KBLI (Klasifikasi Baku Lapangan Usaha Indonesia — Indonesian Standard Business Classification) code determines which regulations apply to your business and what you are legally authorised to do. Getting the code wrong creates compliance issues that are expensive to fix later.

KBLI Code	Business Type	Notes
55110	Hotel Bintang (Star-rated hotel)	Requires grading
55120	Hotel Melati (Non-star hotel)	Budget hotels
55130	Pondok Wisata (Homestay)	Indonesian citizens only, max 5 bedrooms
55193	Villa	Primary code for foreign PT PMA villa operations
55199	Other Short-Term Accommodation	Catch-all — may cause compliance issues

Caution: Some operators register under KBLI 55199 (Other Accommodation) because it seems simpler, but government inspectors may require a change to 55193 (Villa) to match the actual business activity. Getting the classification right from the start avoids delays, re-registration costs, and potential fines during inspections.

What Are the Steps to License a Villa in Bali?

Villa licensing follows a seven-step process through Indonesia’s OSS (Online Single Submission) system, with each step building on the previous one. The process typically takes 6–12 months from start to finish, and the steps cannot be skipped or done out of order.

Below is the complete licensing pathway. Each step includes its dependencies — you cannot proceed to the next step without completing the current one.

Step 1: Establish Your Legal Entity

For foreigners, this means setting up a PT PMA. 100% foreign ownership is permitted in the accommodation sector under Indonesia’s Positive Investment List. For Indonesian citizens, a local PT or individual registration (for Pondok Wisata) is available.

• The company’s Articles of Association must list the correct KBLI codes — 55193 for Villa.
• Register the company through the Ministry of Law and Human Rights.
• BPR’s PT PMA setup guide covers capital requirements, registration steps, and timelines.

Step 2: Obtain Your NIB via OSS

Register at the OSS portal (oss.go.id) to obtain your NIB (Nomor Induk Berusaha — Business Identification Number). The NIB is your primary business identity in Indonesia’s licensing system.

• The NIB is initially issued as “Unverified” for tourism activities — this is normal.
• Select the correct KBLI code during registration (55193 for Villa).
• The NIB is required before you can apply for a building permit or register for tax.
• Keep the NIB number accessible — you will need it for every subsequent step.

Step 3: Verify Your Zoning (KKPR)

The OSS system checks your property’s coordinates against the Digital Spatial Plan (RDTR — Rencana Detail Tata Ruang). You need KKPR (Persetujuan Kesesuaian Kegiatan Pemanfaatan Ruang — Zoning Conformity Approval).

• Villa license (KBLI 55193) requires Pink (Tourism) zone.
• Properties in Yellow (Residential), Green (Agricultural), or Conservation zones cannot receive a villa license.
• Many existing villas were built in residential zones and cannot be legally licensed — verify zoning before purchasing or investing.
• You can check zoning online using the OSS RDTR Interaktif tool.
• If the zoning check fails, the licensing process stops here. See our due diligence checklist for pre-purchase verification steps.

Step 4: Obtain Your Building Permit (PBG)

PBG (Persetujuan Bangunan Gedung — Building Approval) replaced the old IMB (Izin Mendirikan Bangunan). Apply through the SIMBG (Sistem Informasi Manajemen Bangunan Gedung) portal.

• Requires technical drawings (architectural, structural, MEP) signed by a licensed Indonesian engineer.
• The PBG must state commercial/tourism use — a residential PBG is not sufficient for a villa license.
• If the property has an old IMB, the stated building function must match the current KBLI code.
• Building modifications to meet commercial standards (fire safety, accessibility, parking) may be required.

Step 5: Obtain Environmental Clearance (SPPL)

Environmental clearance ensures your operation meets waste management, water use, and noise control standards.

• SPPL (Surat Pernyataan Pengelolaan Lingkungan — Environmental Management Statement) — for smaller operations.
• UKL-UPL (Upaya Pengelolaan Lingkungan / Upaya Pemantauan Lingkungan) — for larger operations with greater environmental impact.
• The SPPL is often auto-generated in the OSS system once technical requirements are met.
• Ensure your waste management and water treatment systems are documented and operational before applying.

Step 6: Obtain Your Safety Certificate (SLF)

SLF (Sertifikat Laik Fungsi — Certificate of Building Worthiness) confirms that your building is safe for public occupation.

• A government-certified inspector verifies structural safety, fire safety, and sanitation standards.
• The Ministry increasingly requires SLF as proof that a property meets “Standardized” classification.
• Common failure points include inadequate fire exits, missing fire extinguishers, and non-compliant electrical systems.
• Budget for any remediation work that the inspection may require.

Step 7: Final NIB Verification

With PBG and SLF in hand, return to the OSS system to complete NIB verification.

• NIB status changes from “Unverified” to “Verified/Effective.”
• This verified NIB is what OTAs require to keep your listing active.
• Must be completed by the March 31, 2026 deadline for OTA compliance.
• Once verified, the NIB serves as your primary proof of lawful tourism business operation.

Licensing Dependency Chain

The following table shows the sequential dependencies — each requirement must be met before the next step can proceed:

To get this…	You must already have…
NIB	A PT PMA or local PT
KKPR (Zoning Approval)	An NIB
PBG (Building Permit)	An NIB + KKPR
SLF (Safety Certificate)	A PBG + a completed building
Verified NIB (OTA compliance)	All of the above

What Zoning Does a Bali Villa Need for Licensing?

Zoning is one of the biggest obstacles to villa licensing in Bali. A Villa license (KBLI 55193) requires your property to be in a Pink (Tourism) zone — and many existing villas were built in residential zones that cannot be legally converted for commercial tourism use.

Bali’s spatial plan divides land into zones based on permitted use. Understanding these zones is critical before purchasing or leasing any property for rental purposes. Here are the main categories:

• Yellow — Residential. Villa license (KBLI 55193) is NOT permitted. Pondok Wisata (KBLI 55130) may be possible in some cases, but this category is limited to Indonesian citizens.
• Orange — Mixed-Use. Limited tourism activities may be allowed depending on sub-zone classification. Requires individual assessment.
• Red — Commercial. Some tourism activities may be allowed, but commercial zoning does not automatically mean tourism is permitted.
• Pink — Tourism. Required for Villa license (KBLI 55193). Hotels, resorts, and commercial villas are permitted in this zone.
• Green — Agricultural. No commercial or tourism development. Building permits for tourism activities will not be issued.
• Conservation — Protected. No development of any kind. Building in conservation zones is illegal.

Key Zoning Facts

A PT PMA with hospitality KBLI codes (55130, 55193) cannot legally operate in non-tourism zones — holding a PT PMA does not override zoning requirements. The zoning check happens during Step 3 of the licensing process. If your property is in the wrong zone, the process stops.

You can check your property’s zoning using the GISTARU tool or the OSS RDTR Interaktif online portal. These tools allow you to enter property coordinates and see which zone applies. However, be aware that online tools may not always reflect the most recent zoning updates — confirm with the local spatial planning office (Dinas Tata Ruang) for certainty.

If your property is in a non-tourism zone, the options are limited: (a) apply for a zone change, which is rare, expensive, and time-consuming with no guarantee of approval; or (b) accept that the property cannot be legally licensed for commercial villa rental.

The July 2025 demolitions at Bingin Beach targeted properties in zoning-violation areas — this is not theoretical enforcement. Governor Koster personally oversaw the demolition of 48 illegal structures, making clear that zoning violations are a primary enforcement target.

What Tax Obligations Apply to Licensed Villa Operators?

Licensed villa operators in Bali face three main tax obligations: Pajak Hotel dan Restoran (PHR — a 10% local tax on accommodation revenue), income tax, and standard property taxes. Airbnb does not withhold or remit PHR — operators must register and pay independently.

PHR (Pajak Hotel dan Restoran) — 10%

PHR is a local tax on short-term accommodation revenue, administered by the Bali provincial/regency government. The rate is 10% of gross accommodation revenue — applied to the total amount guests pay for the stay.

Critically, Airbnb, Booking.com, and other OTAs do NOT withhold or remit this tax on the operator’s behalf. The villa operator must independently:

• Obtain an NPWPD (Nomor Pokok Wajib Pajak Daerah — Regional Taxpayer ID) from the local tax office.
• File monthly PHR returns.
• Pay the 10% tax on all accommodation revenue received during the period.

Many private villas reportedly did not pay PHR throughout 2025, causing what government officials described as a “massive deficit in forecasted provincial budget.” This revenue shortfall is a major driver behind the current enforcement push — the government is motivated to bring unlicensed operators into the tax system.

Income Tax

Income tax is separate from PHR. Corporate income tax applies to PT PMA profits from villa operations. The income tax framework involves national-level obligations with different rates and filing requirements than the local PHR. For full details on income tax rates and obligations for foreign property owners, see BPR’s property tax guide.

Property Tax (PBB)

Annual land and building tax (PBB — Pajak Bumi dan Bangunan) applies regardless of whether the property is licensed for commercial use. This tax is assessed based on the government’s valuation of the land and building, not on rental income. BPR’s property tax guide covers PBB calculations and payment procedures in detail.

Guest Reporting Requirement

Beyond tax obligations, licensed villa operators must comply with guest reporting requirements. STM (Surat Tanda Melapor) requires villa operators to report every foreign guest to police within 24 hours of arrival. This is a security regulation, not a tax requirement, but failure to comply is a violation that results in fines for both the host and the guest.

What Are the Penalties for Operating Without a Villa License?

Penalties for unlicensed villa operation in Bali range from administrative warnings to property demolition and deportation. The Indonesian government escalated enforcement in 2024–2025, and multiple foreign villa operators have already faced consequences.

Administrative Sanctions (Per Permenpar 18/2016)

The administrative enforcement ladder is clearly defined in the regulation:

• Pasal 37 — Three written warnings (teguran tertulis): a first warning is issued, followed by a second within 7 business days if the violation continues, then a third within 5 business days. These warnings are official government notices, not informal requests.
• Pasal 38 — Business activity restriction (pembatasan kegiatan usaha) if all three warnings are ignored. This also applies if a business has been inactive for 6 or more months.
• Pasal 39 — TDUP revocation (pencabutan TDUP) — imposed 30 business days after the activity restriction. Revocation is also triggered by: permanent cessation of operations, inactivity exceeding 1 year, or submission of falsified documents during registration.

Financial Penalties

The financial consequences of operating without a license extend well beyond administrative fines:

• Fines of IDR 50 million or more — enforcement cases include a fine of IDR 50 million issued against an Australian operator in Pererenan who was operating in a residential zone without a license.
• Retroactive PHR (10%) assessed on estimated past earnings — operators report tax bills reaching IDR 500 million to IDR 1 billion (approximately USD 33,000–66,000 at current exchange rates).
• These financial penalties come on top of the requirement to cease operations — paying the fine does not grant retroactive licensing.

Physical Enforcement

Physical enforcement escalated significantly in 2025:

• In July 2025, 48 illegal structures were demolished at Bingin Beach, Pecatu — personally overseen by Governor Koster.
• 9 additional locations were targeted including Balangan Beach.
• 40+ unlicensed tourist accommodations have been identified across Bali for further action.
• Satpol PP (civil enforcement officers) seal properties with “disegel” (sealed) notices — this can happen during active guest stays, forcing immediate guest relocations and refunds.

Immigration Consequences

Foreigners face additional immigration-related risks:

• Foreigners violating visa terms — such as managing a villa business on a tourist visa, or operating without a KITAS (Limited Stay Permit) through a PT PMA — face deportation.
• Deportation can include a 1–6 year blacklist from re-entering Indonesia.
• Managing bookings, staff, or finances without proper PT PMA work authorisation constitutes working illegally — even if you are the property owner.

Other Risks

• Insurance void: Operating outside your property’s permitted use means property and liability insurance may refuse coverage for any claims. A guest injury at an unlicensed commercial villa may leave the owner personally liable for all damages.
• Platform delisting: After the March 2026 deadline, OTAs may remove unlicensed properties permanently — not just temporarily. Rebuilding listing history, reviews, and search ranking on these platforms is difficult and time-consuming.
• No corporate shield: Without a proper PT PMA structure, the individual owner has personal liability for guest injuries or incidents. A PT PMA provides limited liability protection that personal ownership does not.

Frequently Asked Questions

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