Frequently Asked Questions

Foreigners can buy property in Bali, but there are specific regulations and restrictions they need to navigate. Here are the primary methods through which foreigners can acquire property in Bali:

1. Leasehold (Hak Sewa): Foreigners can lease land or property for an initial period of up to 25 years, which can be extended for additional periods. This is a common method used by foreigners to gain long-term use of property.

2. Right to Use (Hak Pakai): This allows foreigners to use land or property for residential purposes. The initial term is typically up to 30 years, with possible extensions of 20 years and another 30 years thereafter. The property must be used for residential purposes, and the foreigner must reside in Indonesia.

3. Indonesian Nominee: A foreigner can purchase property through an Indonesian nominee (usually a trusted Indonesian citizen). The nominee holds the property on behalf of the foreigner. However, this method carries risks and legal complexities.

4. PT PMA (Foreign-Owned Company): Foreigners can set up a foreign-owned company (PMA) in Indonesia. This company can then purchase land and property. This method is often used for commercial properties.

It’s essential for foreigners to work with a reputable real estate agent and legal advisor to ensure compliance with Indonesian laws and to safeguard their investment.

To buy property in Bali, foreigners must fulfill certain conditions based on the method of acquisition. Here are the specific conditions for each method:

1. Leasehold (Hak Sewa)

Contract: A lease agreement must be signed with the property owner.
Duration: The lease can be for a maximum initial period of 25 years, often with options to extend.
Purpose: The property can be used for residential or commercial purposes, depending on the lease agreement.

2. Right to Use (Hak Pakai)
Purpose: The property must be used for residential purposes.
Duration: The right to use can be granted for an initial period of up to 30 years, extendable for another 20 years, and then for another 30 years.
Ownership: The foreigner must have a valid Indonesian residence permit (KITAS/KITAP).

3. Indonesian Nominee Arrangement
– Trust: A trusted Indonesian citizen must be willing to act as the legal owner of the property.
– Agreement: Legal agreements must be put in place to protect the foreign investor’s interest, such as loan agreements, irrevocable power of attorney, and mortgage agreements.
– Risk Management: This method carries legal and financial risks; therefore, it’s crucial to have robust legal documentation and advice.

4. Foreign-Owned Company (PT PMA)
– Company Formation: The foreigner must establish a PMA (Penanaman Modal Asing) company in Indonesia.
– Investment Plan: A detailed investment plan must be submitted and approved by the Indonesian Investment Coordinating Board (BKPM).
– Purpose: The property must be used for business or commercial purposes.
– Compliance: The PT PMA must comply with Indonesian laws and regulations regarding foreign investment.

General Requirements
– Due Diligence: Conduct thorough due diligence to ensure the property is legally available for the intended use.
– Legal Assistance: Work with a reputable lawyer and real estate agent to navigate the legalities and ensure compliance with Indonesian laws.
– Regulatory Compliance: Ensure all transactions and agreements comply with Indonesian regulations to avoid legal issues.

By meeting these conditions, foreigners can navigate the property market in Bali more effectively and safeguard their investments.