What Legal Documents Do I Need to Rent a Villa in Bali? A Complete 2025 Guide for Foreigners
Renting a villa in Bali is a dream for many foreigners looking to experience island living—whether it’s for short-term holidays, long stays, or as part of an investment plan. But to rent a villa legally and avoid disputes or legal issues in Indonesia, it’s essential to understand the legal documentation required and the rental structure under Indonesian property law.
At The Bali Lawyer, we specialize in helping foreign individuals and businesses navigate the legal requirements of renting property in Bali. In this comprehensive 2025 guide, we outline everything you need to know about the legal documents required for renting a villa in Bali and how to protect your rights throughout the process.
Understanding Property Ownership vs. Leasing in Bali
First and foremost, foreigners cannot own freehold property in Indonesia under their name. However, leasehold agreements are legally permitted and common among expatriates and investors in Bali. Villas are typically offered on a leasehold basis, which allows foreigners to rent the property for a fixed term (usually 5 to 30 years) with the possibility of renewal.
That means your rights as a tenant depend heavily on the lease agreement and supporting documents. Ensuring those documents are legal and properly drafted is critical for a secure rental experience.
Types of Property Rentals in Bali
There are different types of villa rentals, each requiring slightly different documentation:
Short-term rental (holiday villa or Airbnb-style stay)
Long-term lease for residential use
Lease for business/commercial operation (e.g., renting for subletting or hospitality)
Each type of lease must be aligned with Indonesian law and supported by valid documents signed by the rightful property owner.
Key Legal Documents You Need to Rent a Villa in Bali
Whether you are renting for one year or thirty, the following documents are essential to ensure your rights are protected and the lease is legally enforceable:
1. Lease Agreement (Perjanjian Sewa Menyewa)
The lease agreement is the most crucial document. It should clearly state:
The parties involved (you and the property owner or legal representative)
The term of the lease
The total rental price and payment schedule
Security deposit and refund terms
Use of the property (residential or commercial)
Renewal and extension rights
Responsibility for maintenance, taxes, and utilities
Termination and dispute resolution clauses
A well-drafted lease agreement should be in both Bahasa Indonesia and English, and it should be notarized to ensure legal enforceability.
2. Copy of the Land Certificate (Sertifikat Tanah)
The land certificate proves that the property owner has the legal right to lease the land or building. Common certificate types include:
Hak Milik (Freehold Ownership) – owned by Indonesian citizens
Hak Pakai (Right of Use) – can be granted to foreigners under strict rules
Hak Guna Bangunan (Right to Build) – generally used for commercial leases
Make sure the name on the certificate matches the landlord or company leasing the villa.
3. IMB or PBG (Building Permit)
The building must have a valid IMB (Izin Mendirikan Bangunan) or its updated version known as PBG (Persetujuan Bangunan Gedung). This document confirms the villa was built legally and is permitted for residential or commercial use. Properties operating without these permits can face legal action and even demolition orders.
4. Tax Registration Documents (NPWP)
The landlord should provide a valid NPWP (Tax Identification Number), which proves they are registered to pay income tax on the rental earnings. You should ask for this document, especially in long-term or high-value leases.
5. Proof of Ownership or Power of Attorney (Surat Kuasa)
If the person leasing you the villa is not the legal owner (e.g., an agent or family member), they must have a power of attorney from the rightful owner authorizing them to act on their behalf. This document should also be notarized.
6. Due Diligence Report
For longer or commercial leases, we strongly recommend conducting legal due diligence to verify that:
The title is clean (no disputes or encumbrances)
The landlord is the legitimate owner
All permits (PBG, SLF) are in place
The land is zoned correctly for your intended use (residential or commercial)
Your legal advisor should handle this due diligence before you sign any contract or make a payment.
7. Notarial Deed (Akta Sewa Menyewa)
While not legally required for all leases, having the lease formalized in a Notarial Deed is recommended for leases above 5 years. This provides added protection and makes the agreement easier to enforce in Indonesian courts.
8. KTP of the Lessor (Landlord’s Identity Card)
Always request a copy of the landlord’s KTP (Indonesian ID card) to confirm their identity. If you’re dealing with a legal entity (such as a company), ask for the company’s Deed of Establishment (Akta Pendirian) and latest SK Menkumham (Legalization Letter from Ministry of Law and Human Rights).
9. SPPT PBB (Land and Building Tax Receipt)
This tax document proves the property’s tax status is current and paid. As a tenant, you should ensure there are no outstanding land or building taxes, as this could impact the validity of the lease or even result in government action.
Common Pitfalls to Avoid When Renting a Villa in Bali
Renting without full documentation can lead to:
Invalid contracts that cannot be enforced
Property being reclaimed by the rightful owner
Land disputes
Financial loss from unrefunded deposits
Fines or legal issues due to lack of permits
Make sure you never sign a lease agreement or pay a deposit without reviewing the legal documents listed above. It’s strongly advised to work with a legal expert to review contracts and verify documents.
Can I Rent a Villa in Bali for Business Purposes?
Yes, but additional legal considerations apply. If you intend to operate a villa as a business or rental property, you must:
Establish a legal entity in Indonesia (such as a PT PMA)
Acquire commercial-use permits (PBG with business classification)
Obtain a SLF (Certificate of Feasibility)
Fulfill zoning and tourism license requirements
Failure to follow these steps can result in fines or business closure.
How We Can Help at The Bali Lawyer
Our legal team provides full services to assist with villa rentals in Bali, including:
Drafting and reviewing lease agreements
Title and ownership checks
Property due diligence
Legal advice on investment structure
Tax and licensing compliance
Representation in disputes or negotiations
With our experience and deep knowledge of Indonesian property law, we protect your rights and ensure your rental is safe and fully compliant.
Renting a villa in Bali offers a unique and rewarding lifestyle or investment opportunity—but only if done legally and carefully. Understanding the required legal documents is essential to securing your interests and avoiding unnecessary legal risks.
At The Bali Lawyer, we help you every step of the way—ensuring your lease agreement is solid, all permits are in place, and your rental experience is stress-free and compliant with Indonesian law.