Bali Villa

Navigating Property Acquisition in Bali as an International Investor

While the prospect of owning property in Bali as a foreign investor may seem daunting due to intricate regulations, it’s indeed a feasible goal if navigated correctly. The government of Indonesia has established rules and guidelines, particularly Government Regulation (PP) No. 103, defining the parameters within which foreign nationals can invest in Bali’s real estate sector. 

Key Pre-requisites for Property Ownership in Indonesia: 

  1. Foreign investors can own property in Indonesia only under Hak Pakai (right to use), Leasehold, and HGB (right to build) certificates.
  2. A Temporary Residency Permit (KITAS VISA) is obligatory for foreign property buyers.
  3. The types of property available for foreign investors include villas, houses, land parcels, and compact apartments. 

Contrary to common perception, it isn’t impossible for foreign investors to acquire land in Indonesia. However, the procedure usually involves engaging an Indonesian local as a nominee freeholder or establishing a foreign investment company that legally holds the deed to the target property. 

Options for Foreign Property Ownership in Bali 

Long-Term Rental: This model permits a foreign investor to rent a property for a duration ranging from 25 to 70 years. Even though the property remains under the original owner’s name, the foreign leaseholder receives the Hak Sewa (Right to Lease) title from the owner’s Hak Milik (Right to Own) title. This arrangement allows the leaseholder to sub-lease the property, transforming the leasehold into a source of steady income irrespective of the property’s market value. If the leasehold isn’t extended upon expiry, ownership reverts to the original owner. 

Establishing a Foreign-Owned Company (PT PMA) 

A PT PMA is a foreign-owned limited liability company recognized by Indonesian law. As a PT PMA holder, a foreigner can obtain the Hak Guna Bangunan / HGB (Right to Build and Use) licenses under a freehold title. It’s crucial to note that the companies don’t own the land they invest in; the license merely allows the use of the land for a specific period (usually no longer than 24 years). 

The Nominee System

Many foreign investors consider securing land ownership through a local nominee as the optimal method. However, it’s paramount to remember that no matter how trustworthy a nominee may seem, they can’t offer the level of investment security required when dealing with substantial funds. 

Closing Thoughts on Property Ownership in Bali

Our team can provide comprehensive guidance throughout the investment process, ensuring a seamless experience, whether dealing with Freehold, Leasehold, or Right of Use properties. Please feel free to reach out to us for further information on property ownership in Bali. Your dream of investing in Bali’s real estate can be a reality with the right guidance and support.

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