Land owning in Bali

Indonesia has specific regulations regarding foreigners owning property in Bali and across the country. Foreign ownership of land in Indonesia, including Bali, is governed by certain restrictions and guidelines outlined in the Agrarian Law.

The prevailing law prohibits foreigners from directly owning land in Indonesia unless under specific conditions:

1. Right to Use (Hak Pakai): Foreigners can obtain rights to use land in Indonesia through a leasehold agreement, known as “Hak Pakai.” This grants them the right to use land for a specified period, often extendable up to 80 years, through a lease agreement with the landowner or under a legal entity.
2. Ownership through a Legal Entity: Foreigners can acquire property in Indonesia through the establishment of a foreign-owned company (PT PMA). This entity can then hold property on behalf of the foreign shareholders, allowing indirect ownership. However, regulations stipulate that at least 51% of the company must be owned by Indonesian citizens.
3. Residential Ownership: Foreigners can also acquire property in Bali through a “right to build” scheme, where they purchase a property but not the land itself. In this scenario, a long-term lease is arranged for the land, and the foreigner builds a property on it. The property can then be used for residential purposes but not for commercial gain.

It’s crucial to navigate property ownership in Bali with caution, ensuring compliance with Indonesian regulations. Legal advice from experienced professionals well-versed in Indonesian property law is highly recommended for foreigners intending to invest in Bali’s real estate market. Moreover, due diligence regarding property titles, permits, and land certificates is essential to avoid any potential legal issues or disputes.

Regulations concerning foreign ownership of property in Bali and Indonesia are subject to change, and these guidelines might have evolved since my last update. Changes in legislation or government policies could impact the rules and conditions for foreign property ownership in the country. Therefore, it’s advisable to seek updated and professional legal counsel before engaging in any property transactions or investments as a foreigner in Bali or Indonesia.