How to Buy Property in Bali Legally as a Foreigner – Complete Guide by The Bali Lawyer

Bali, known for its tropical beauty, vibrant culture, and booming tourism industry, has become one of the most desirable property investment destinations in Southeast Asia. Many foreigners dream of owning a villa, beachfront land, or a holiday home on the island. However, Indonesia’s property ownership laws are unique, and buying property in Bali as a foreigner requires careful legal planning and the right guidance.

At The Bali Lawyer, a professional law service based in Bali, we help foreigners navigate the legal process of property acquisition with transparency and compliance. This guide will explain how foreigners can buy property legally in Bali, the available ownership structures, and the steps to ensure your investment is fully protected under Indonesian law.

Understanding Property Ownership Laws in Indonesia

Indonesia’s property laws are based on the Basic Agrarian Law (UUPA) of 1960, which governs land rights across the country. Under this law, foreigners are not permitted to directly own freehold (Hak Milik) land. Freehold ownership is reserved exclusively for Indonesian citizens.

However, this doesn’t mean foreigners cannot invest in or control property in Bali. There are several legal ownership structures that allow foreigners to acquire property and secure long-term usage rights.

To buy property legally, it’s essential to understand the different types of land titles available under Indonesian law.

Types of Land Titles in Indonesia

1. Hak Milik (Freehold Title)

  • This is the strongest form of land ownership in Indonesia.

  • Only Indonesian citizens can hold a Hak Milik title.

  • Foreigners cannot directly purchase or hold Hak Milik property in their name.

However, foreigners can still benefit from this type of property indirectly through legal leasehold agreements or corporate structures.

2. Hak Pakai (Right to Use)

  • This is the most common and legal method for foreigners to own property in Bali.

  • Foreign individuals or foreign-owned companies (PMA) can hold this title.

  • It grants the right to use and build on the land for an initial period of up to 30 years, renewable for 20-year extensions.

Hak Pakai provides long-term security, as the property is registered under the foreigner’s name or their company’s name.

3. Hak Guna Bangunan (Right to Build)

  • This title allows the holder to build on land owned by someone else (usually the state or an Indonesian individual).

  • Commonly used by foreign-owned companies (PT PMA).

  • Valid for 30 years, with possible extensions.

Hak Guna Bangunan is suitable for commercial projects such as hotels, resorts, and rental villas.

4. Hak Sewa (Leasehold or Rental Right)

  • This allows foreigners to lease land or property for a fixed period, typically between 25 to 30 years, with the option to extend.

  • The lease agreement is made directly with the Indonesian landowner.

  • While not true ownership, it provides full legal use rights during the lease term.

Leasehold agreements are a safe and popular option for foreigners looking to live or invest in Bali without establishing a company.

Legal Ways for Foreigners to Buy Property in Bali

There are several legal mechanisms that allow foreigners to own or control property in Bali while complying with Indonesian law. Below are the most common and secure methods.

1. Buying Through a Hak Pakai Title (Right to Use)

Foreigners can purchase property under a Hak Pakai title, provided certain requirements are met.

Requirements include:

  • Holding a valid Indonesian stay permit (KITAS or KITAP).

  • The property must be built on land already classified for residential or commercial use.

  • The property must not exceed a specific land size or price limit determined by government regulations.

Under this title, the foreigner’s name is registered on the land certificate, granting full legal rights of use and resale to another eligible foreigner or Indonesian citizen.

This is the most straightforward and transparent method for foreigners planning to reside in Bali or invest long-term.

2. Forming a PT PMA (Foreign-Owned Company)

Another legal and secure option is to establish a foreign investment company (PT PMA).

A PT PMA allows the foreign entity to:

  • Acquire property under the Hak Guna Bangunan (Right to Build) or Hak Pakai (Right to Use) title.

  • Conduct business activities, such as operating villas, resorts, or restaurants.

  • Own multiple properties for commercial use.

This method is ideal for those looking to develop or manage real estate for business purposes. The PT PMA structure provides legal clarity and tax benefits under Indonesian corporate law.

The company’s assets, including land and buildings, are legally recognized and protected by the Indonesian Investment Coordinating Board (BKPM).

3. Leasehold Agreements (Hak Sewa)

If you prefer not to set up a company, leasehold property is a simple and safe solution.

Under a leasehold agreement:

  • A foreigner signs a long-term lease directly with the Indonesian owner.

  • The contract should clearly state the duration, renewal rights, and usage terms.

  • The lease can include clauses allowing renovation, sub-letting, or resale rights.

While the foreigner doesn’t own the land outright, they have full control and use of the property for the duration of the lease.

At The Bali Lawyer, we ensure that leasehold contracts are drafted in compliance with Indonesian law, fully protecting your interests and rights.

Steps to Buy Property in Bali as a Foreigner

Buying property in Bali involves several important legal and administrative steps. Here’s a breakdown of the process to help you understand how to do it correctly:

Step 1: Determine the Right Ownership Structure

Consult with a legal advisor to identify which ownership type — Hak Pakai, PT PMA, or Leasehold — best suits your goals.

Step 2: Legal Due Diligence

Before signing any agreement, a legal due diligence process must be conducted. This includes verifying:

  • Land ownership and title status

  • Zoning and land-use regulations

  • Absence of legal disputes or mortgages

  • Validity of property certificates

This step ensures that the property is free from encumbrances and legally available for sale or lease.

Step 3: Agreement Drafting and Signing

Once the due diligence is complete, a Purchase Agreement or Lease Agreement is drafted. Both parties sign the agreement in the presence of a Notary (Notaris/PPAT) registered in Indonesia.

The notary ensures the transaction complies with Indonesian legal standards and registers the property with the National Land Agency (BPN).

Step 4: Land Title Registration

Depending on the ownership structure:

  • For Hak Pakai or Hak Guna Bangunan, the title is issued under your name or company’s name.

  • For Leasehold, the agreement is notarized and legally binding.

Step 5: Property Handover and Documentation

After registration, the property or lease rights are officially transferred. The buyer receives the legal documents, such as:

  • Land certificate (Sertipikat Tanah)

  • IMB or PBG (building permit)

  • Notarial agreement copies

  • Tax documents and payment records

Important Legal Considerations

When buying property in Bali, there are several key legal points to keep in mind:

  1. Avoid Using Nominee Structures
    Many foreigners in the past used Indonesian nominees to hold property under a local name. This practice is illegaland can lead to serious legal issues, including property loss.

  2. Ensure Zoning Compliance
    Bali’s zoning laws determine what activities can take place on certain land types — residential, commercial, agricultural, or tourism. Always verify the zoning classification before buying.

  3. Check Building Permits and Certificates
    Make sure the property has the correct permits, including PBG (Building Approval) and SLF (Certificate of Building Worthiness), to avoid future legal complications.

  4. Work with a Licensed Notary and Legal Expert
    Transactions should always go through a registered Notary/PPAT to ensure validity and registration with the BPN.

  5. Understand Tax and Ownership Regulations
    There are taxes associated with property transactions and annual ownership. Legal experts can guide you through compliance and reporting.

Benefits of Buying Property in Bali

Despite legal complexities, owning property in Bali offers tremendous benefits when done correctly:

  • Long-Term Investment Potential: Bali’s real estate market continues to grow due to strong tourism and international demand.

  • Rental Income Opportunities: Villas and properties in popular areas like Canggu, Uluwatu, and Seminyak generate consistent rental returns.

  • Lifestyle Appeal: Owning property in Bali gives you access to one of the world’s most beautiful tropical destinations.

  • Business Expansion: For entrepreneurs, establishing a PT PMA opens doors to tourism, hospitality, and property management opportunities.

How The Bali Lawyer Can Help You

At The Bali Lawyer, we specialize in providing legal assistance for property transactions and foreign investments in Indonesia. Our experienced legal team ensures that every process complies with national laws, protecting your investment from risk.

Our services include:

  • Property due diligence and verification

  • Structuring ownership legally for foreigners

  • Drafting and reviewing contracts

  • Establishing PT PMA companies

  • Assisting with land title registration

  • Advising on tax, zoning, and compliance

We work closely with notaries, government offices, and real estate professionals to ensure your property acquisition is transparent and secure.

Why Choose The Bali Lawyer

  1. Local Legal Expertise: We are based in Bali and fully understand Indonesian land laws and foreign ownership regulations.

  2. Transparent Legal Solutions: Every process we handle is compliant with government regulations and official documentation.

  3. Personalized Consultation: We tailor our legal advice to your goals — whether for personal residence, investment, or business.

  4. Comprehensive Legal Protection: We safeguard your rights throughout the entire property acquisition process.

 

Buying property in Bali as a foreigner is entirely possible — but only when done legally and carefully. With the right legal structure, proper documentation, and professional guidance, you can secure a property that’s compliant with Indonesian law and aligned with your long-term goals.

At The Bali Lawyer, we guide you through every stage, from due diligence and contract signing to title registration and compliance. Whether you’re looking to invest, build a villa, or start a business in Bali, our expert legal team ensures your transaction is safe, transparent, and fully protected.

Contact The Bali Lawyer today to learn more about how to buy property in Bali legally and start your journey to owning a piece of paradise.