Can Foreigners Own Property in Bali?
One of the most searched questions by international investors is can foreigners own property in Bali? The short answer: not directly. Indonesian law restricts freehold land ownership to Indonesian citizens. However, foreign investors have several legal and secure pathways to acquire property through leasehold agreements, PT PMA structures, and rights of use (Hak Pakai). These alternative methods provide long-term control, rental income potential, and resale options—making foreign investment in Bali both practical and profitable.
Leasehold Ownership: The Most Common Route
Leasehold is the most widely used structure for foreign buyers in Bali. Under this model, the foreign investor leases the land from an Indonesian owner for a fixed period—typically 25 to 30 years—with options to extend. Leasehold agreements are legally binding and can be registered with the national land office. This method gives foreigners full usage rights and the ability to rent the property out for income, making it ideal for villas, apartments, and commercial spaces.
PT PMA: Full Legal Ownership Through a Foreign Company
For those seeking long-term investment and broader rights, establishing a PT PMA (a foreign-owned company) offers a powerful solution. With a PT PMA, foreigners can obtain the Right to Build (Hak Guna Bangunan) and operate a business—including property rental or development. This structure is ideal for investors planning to generate income through short-term rentals or operate legally in the hospitality sector. However, it requires proper licensing, tax reporting, and compliance with Indonesian corporate law.
Nominee Agreements: A Risky Approach
Some foreigners have historically used nominee arrangements—buying property under the name of an Indonesian citizen while having a private agreement in place. This method carries significant legal risk and is not recommended, as it does not offer legal protection in court. The Indonesian government has increasingly discouraged nominee structures in favor of transparent, regulated alternatives like leasehold or PT PMA.
Choose the Right Ownership Path
The best ownership structure depends on your investment goals. Leasehold is simple and effective for personal or rental use, while PT PMA offers business-level control for long-term investors. Always conduct due diligence, work with a licensed notary, and consult legal advisors familiar with Indonesian real estate law. With the right setup, foreign investors can enjoy the benefits of Bali property ownership safely and legally.
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