Property Ownership in Bali as a Foreigner

Long Term Rental

A contract that allows a foreigner to rent a piece of land for 25 to 70 years. The land would still be under the original owners name before and after the signing of the contract. When the lease starts the foreigner receives the Hak Sewa title (Right to Lease) from the original owner’s (Right to Own) Hak Milik title.

The property can be sub-leased (rented out to other people) under the lease agreement. This is a way for foreigners to turn a leasehold into some passive, fast income. It gives much wanted freedom to investors allowing them to ignore the market situation because the value of the property is unimportant.

All rights go back to the original owner if the leasehold is not extended until it expires, and it becomes a freehold Hak Milik property again.

By setting up a Foreign Owned Company (PT PMA)

The PT PMA is a foreign owned limited liability company in Indonesia. Foreigners have the right to get the Hak Guna Bangunan / HGB (Right to Build and Use) licenses under a freehold title.

A PT MPA holder is eligible to get a HGB license by having an Indonesian citizenship or by having an established company domiciled in Indonesia under the Indonesian Law. These are the regulations.

Basically companies don’t really own the plots they’re investing in. The license only gives the company the right to use the land for a determined amount of time (usually not longer than 24 years). If the company intends to hold control of the property after the lease period it would have to acquire another license.

It is clear that these regulations do not actually allow investors to purchase land and build villas in Indonesia, but this is as close as they can get to achieving that. To extend an investors right to use the property should be quite easy as long the property is being used for the legal intentions clearly stated by the laws and regulations of Indonesia.

What about buying property in Bali using a nominee system?

From our experience most investors believe that the best way to gain ownership of a piece of land is by getting a local nominee and giving him the ownership of the land. This is in part true. Nominees can seem very trustworthy and can have good relations with the foreigner but when investing a large amount of money into such properties investors need security. The kind of security that the nominee cannot provide you with. Unless you not afraid of an investment on shaky grounds.

Buying property in Bali: Summary on property ownership in Bali.

To make the investment as easy as possible we can guide you from the beginning to the end of the entire process. Assistance with all types of properties: from Freehold to Leasehold to Right of Use. Our team can assist you, so don’t hesitate to contact us and we will get back to you as soon as we can to make your dream of investing in regarding all info you need regarding property ownership in Bali.