Bali is one of the most popular islands for investment, but under the Hak Milik (freehold ownership) scheme, foreigners are not allowed to own property in Indonesia.
In fact, foreigners are offered one of three forms of ownership: Leasehold, Hak Pakai (Right to Use), or ownership through a PT PMA with a Hak Guna Bangunan title.
Leasehold refers to a Extended land tenancy. This option is commonly used by those without a residence permit. The agreement is established directly with the Indonesian landowner and must be registered with a notary and the BPN. Lease terms typically range from 25 to 80 years.
The original contract must clearly specify the renewal conditions and rental rates – otherwise, the landlord may significantly increase the price later.
Hak Pakai is an attractive option for residents. It is also available to foreign nationals possessing either a KITAS or KITAP who are eligible for long-term land leases in Indonesia. The initial term is 30 years and may be extended up to 80 years. The buyer receives a certificate equivalent to that of local users.
The Hak Pakai application can be filed from overseas through a licensed attorney. Required documents include a copy of the passport, residence permit, and a statement explaining the intended use of the land.
For major investments such as villa or hotel development, it is advisable to establish a PT PMA. The law requires a minimum capital of IDR 10 billion.
Once the company is registered, it becomes eligible to obtain a building rights title (Hak Guna Bangunan) for 30 years, with an option to renew.
This structure provides full control over the project and offers tax optimization opportunities, but it requires compliance with corporate formalities and cooperation with licensed consultants.
First and foremost, avoid entering into “nominee” arrangements, where land is legally registered under the name of an Indonesian citizen, while the foreigner retains control. These agreements offer very weak legal protection.
Always obtain an official land registry excerpt from the BPN before completing the transaction to ensure the land is free of debt or encumbrances.
It is also essential to work with reputable agents and lawyers, particularly those experienced in assisting foreign clients–professional due diligence. Risks are materially lowered through government institutional frameworks.
With the right structure – Leasehold, Hak Pakai, or PT PMA with HGB – and proper legal support, you can legally invest in Bali real estate with confidence. DDA Real Estate is here to assist you at every step, including remote land purchases in Bali.
