Can Foreigners Buy Property in Bali? Your Complete Legal Guide

Trusted Legal Assistance from The Bali Lawyer

Bali has long been one of the most attractive destinations for foreigners seeking tropical living, retirement, or investment opportunities in Southeast Asia. With its natural beauty, thriving tourism industry, and laid-back lifestyle, many international investors and expats wonder: Can foreigners buy property in Bali?

The short answer is: not directly under freehold ownership, but there are several legal avenues that allow foreigners to acquire and control property in Bali with security and compliance under Indonesian law. At The Bali Lawyer, we provide expert legal services to guide you through every step of your property investment journey in Bali, ensuring clarity, compliance, and peace of mind.

Understanding Indonesian Property Ownership Laws

Indonesia’s property laws are governed by the Agrarian Law of 1960, which specifies the categories of land rights and who can hold them. There are three primary land titles that are important for property ownership:

  • Hak Milik (Freehold Title): Only available to Indonesian citizens.

  • Hak Pakai (Right to Use): Available to foreigners for specific use purposes and periods.

  • Hak Guna Bangunan (Right to Build): Usable by Indonesian legal entities, including foreign-owned companies (PT PMA).

As a foreigner, you cannot directly hold a Hak Milik (freehold) title, but you can legally acquire Hak Pakai or control property through a PT PMA or long-term lease agreements.

Legal Options for Foreigners to Acquire Property in Bali

1. Hak Pakai (Right to Use)

The Hak Pakai title allows a foreign individual residing in Indonesia to use a property for residential purposes. It is granted for an initial period of up to 30 years, renewable for another 20 years, and then extended again for an additional 30 years, making it a viable long-term solution.

To qualify:

  • You must have a valid temporary or permanent stay permit (KITAS/KITAP).

  • The property must be built on land designated for residential use.

  • It must not exceed a certain land area depending on the location.

This is the most straightforward method for a foreigner intending to live in Bali long-term or to own a residence legally under their name.

2. Leasehold (Hak Sewa)

Foreigners can also lease land or property for a long term—typically 25 to 30 years, with options to extend. This arrangement is governed by a lease agreement and does not provide ownership of the land but gives full usage rights during the lease period.

Advantages:

  • Flexible terms.

  • No need for a local nominee.

  • Can include commercial use if properly structured.

However, it is essential to have a legally drafted lease agreement prepared and reviewed by a qualified legal team to protect your rights and avoid future disputes.

3. PT PMA (Foreign Investment Company)

Setting up a PT PMA (Perseroan Terbatas Penanaman Modal Asing) is a legal way for foreigners to invest and own property for business purposes in Bali. Through this legal entity, a foreigner can acquire the Hak Guna Bangunan (Right to Build) and develop commercial property, including villas, hotels, or restaurants.

Benefits include:

  • Full control and management of the business.

  • Ability to own buildings under the PT PMA name.

  • Legal protection and access to business permits.

At The Bali Lawyer, we assist in establishing PT PMA entities, obtaining licenses, and structuring property ownership to comply with Indonesian investment laws.

4. Using a Nominee (Not Recommended)

In the past, some foreigners have used an Indonesian nominee to hold a Hak Milik title on their behalf. This is highly discouraged as it violates Indonesian law and presents significant legal risks. Such arrangements are not legally enforceable and can result in the loss of property.

If you’re considering this method, seek qualified legal counsel before proceeding. Our firm strongly advises against using nominee structures and instead recommends safer, compliant alternatives.

Steps to Buying or Leasing Property in Bali

To ensure a smooth and secure property acquisition process, follow these essential steps:

Step 1: Legal Consultation

Engage a professional legal service like The Bali Lawyer to assess your status, goals, and the most suitable ownership structure.

Step 2: Due Diligence

Before any transaction, a comprehensive due diligence must be conducted. This includes verifying land certificates, confirming zoning, checking for liens or disputes, and ensuring the seller’s legal standing.

Step 3: Drafting and Reviewing Legal Agreements

All agreements—whether for lease, Hak Pakai, or PT PMA property use—must be reviewed or prepared by a lawyer. The agreement should outline:

  • Duration and renewal terms.

  • Rights and responsibilities.

  • Payment terms.

  • Exit and dispute resolution clauses.

Step 4: Registration and Notarial Process

Depending on the structure, the transaction must be registered with the Indonesian National Land Agency (BPN), and all documentation notarized.

Step 5: Tax and Regulatory Compliance

You must comply with relevant tax obligations, such as land and building tax (PBB), and report your property holding in accordance with Indonesian regulations. Our legal team ensures that your property complies with all fiscal and legal obligations.

Popular Areas in Bali for Foreign Property Investment

  1. Canggu: Trendy and fast-growing area popular with digital nomads and investors.

  2. Ubud: Cultural and spiritual center, ideal for retreats and residential living.

  3. Seminyak: Upscale and well-developed area with luxury villas and boutique resorts.

  4. Sanur: Quiet beach town popular with families and retirees.

  5. Uluwatu and Bukit Peninsula: High-end cliffside developments with ocean views.

Each area has its own zoning laws and market dynamics. It’s crucial to work with legal advisors who understand regional regulations and can help navigate local complexities.

Common Mistakes to Avoid

  • Skipping due diligence: Never rely on verbal promises or unverified titles.

  • Using unlicensed brokers or agents: Work only with registered professionals.

  • Entering verbal agreements: All transactions should be documented and notarized.

  • Assuming permanent ownership: Understand the distinction between use rights and ownership under Indonesian law.

Why Choose The Bali Lawyer?

We are a trusted legal firm based in Bali specializing in real estate law and foreign investment. Whether you are planning to reside, invest, or run a business in Bali, we provide tailored legal services including:

  • Property due diligence

  • Drafting lease or Hak Pakai agreements

  • Setting up PT PMA companies

  • Regulatory compliance and permits

  • Legal representation and consultation

Our in-depth understanding of Indonesian property law and our dedication to protecting your interests make us the go-to legal partner for foreigners investing in Bali.

Secure Your Property Investment with Legal Confidence

The dream of owning property in Bali is achievable for foreigners when done legally and carefully. With the right legal guidance and a clear understanding of Indonesia’s property ownership framework, you can invest with security and confidence.

Let The Bali Lawyer help you navigate the legal landscape and protect your rights every step of the way. Contact us today for a consultation and take the first step toward owning your dream property in Bali.

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