How Foreigners Can Own Property in Bali: Understanding PT PMA (2025)

Bali is famous for its beautiful beaches, rich culture, and booming tourism industry, making it a sought-after destination for foreign investors wishing to own property on the island. However, according to Indonesian law, foreigners are not allowed to own freehold land (Hak Milik). Instead, setting up a PT PMA (Perseroan Terbatas Penanaman Modal Asing) – a foreign-owned limited liability company – is the safest and most recognized legal way for foreign property ownership in Indonesia.

This article will guide you through why a PT PMA is the best option for foreigners to own property in Bali legally, the different types of land rights, the company setup process, and alternative investment options.

Can Foreigners Buy Property in Bali?

To protect local ownership of land, Indonesia’s property laws prevent foreigners from owning freehold land (Hak Milik). However, there are legal ways for foreigners to acquire property:

• Hak Sewa (Leasehold): Foreigners can lease land for 25-99 years.
• Hak Pakai (Right to Use): Allows foreigners with residency permits to use land.
• Hak Guna Bangunan (HGB) – Right to Build: Grants the right to develop property.
• PT PMA (Foreign-Owned Company): The best option for full property control.

Among these, establishing a PT PMA is the most secure and legally compliant option for foreign investors looking for long-term property ownership in Bali.

What is a PT PMA?

A PT PMA (Perusahaan Penanaman Modal Asing) is a foreign investment company that allows foreign nationals to legally own and manage businesses in Indonesia, including acquiring property under Hak Guna Bangunan (HGB) or Hak Pakai (HP). This provides foreign investors with long-term property rights and business flexibility.

Important Property Rights Under PT PMA

• Hak Guna Bangunan (HGB) – Right to Build:
  • Allows construction and ownership of buildings.
  • Valid for 30 years, renewable up to 80 years.
  • Ideal for villas, hotels, and commercial properties.
• Hak Pakai (HP) – Right to Use:
  • Allows land use for residential purposes.
  • Valid for 25 years, extendable up to 45 years.
  • Requires a valid residence permit (KITAS/KITAP).

How to Set Up a PT PMA in Bali

Setting up a PT PMA in Bali involves several legal steps. Here’s a step-by-step guide:

• File an Investment Plan to BKPM:
  • Submit a business plan to the Indonesian Investment Coordinating Board (BKPM).
  • Include property development and rental plans.
• Meet Capital Requirements:
  • Minimum share capital of IDR 10 billion (~$630,000).
  • Paid-up capital requirement of IDR 2.5 billion (~$157,500).
• Register the Company:
  • Obtain registration from the Ministry of Law and Human Rights.
  • Register for tax identification (NPWP).
  • Obtain a business domicile certificate from local authorities.
• Obtain Required Licenses:
  • Business Identification Number (BIN).
  • Location and building permits.
  • Environmental permits (if applicable).
• Acquire Property Under PT PMA:
  • Once legally registered, PT PMA can own land under HGB or HP rights.
  • Can be used for business, rentals, or commercial purposes.

Benefits of Owning Property via PT PMA

• Full Legal Compliance: Unlike nominee agreements, PT PMA ensures legal ownership.
• Long-Term Ownership Rights: HGB rights allow ownership for up to 80 years.
• Business Opportunities: PT PMA can operate rental properties, hotels, and commercial projects.

Challenges of PT PMA Property Ownership

• High Capital Requirements: Expensive setup, suitable for serious investors.
• Regulatory Compliance: Ongoing reporting, corporate taxes, and legal obligations.

Conclusion

For foreign investors looking to secure property in Bali, setting up a PT PMA is the safest and most legally compliant method. Consulting with a legal expert or property consultant is essential to ensure compliance and maximize investment potential.

Need assistance? Contact DDA Real Estate for professional consulting services. We offer legal guidance and real estate solutions to help you secure your investment in Bali.