Buying Land in Bali – The Complete Legal Guide for Foreigners and Investors
Bali has become one of the most desirable places in the world to invest in real estate. Whether you are looking to build a dream villa, open a business, or secure an investment property, buying land in Bali can be an exciting opportunity. However, Indonesian land laws are complex, and purchasing property as a foreigner requires careful planning and legal compliance.
At The Bali Lawyer, we help clients from around the world understand their rights, avoid costly mistakes, and secure land legally in Bali. If you are considering buying land here, this guide will give you everything you need to know about the legal process, ownership structures, regulations, and best practices.
Can Foreigners Buy Land in Bali?
One of the most common questions is whether foreigners can legally own land in Bali. Under Indonesian law, foreign individuals cannot directly hold freehold (Hak Milik) land titles. However, there are several legal options that allow foreigners to control and use land securely. The key is to choose the right ownership structure that complies with Indonesian regulations.
Legal Structures for Foreigners Buying Land in Bali
There are three primary ways foreign investors typically acquire land rights in Bali:
1. Leasehold (Hak Sewa)
Leasehold agreements are the most straightforward and widely used method. With a leasehold, you do not own the land itself, but you acquire the legal right to use the property for a fixed term, often 25-30 years, with the option to extend. Leasehold contracts are signed directly with the landowner and are recognized by Indonesian law.
Benefits of Leasehold:
Simple to arrange and register
Lower upfront costs compared to other structures
Secure legal rights to use the land during the lease term
Fully enforceable in Indonesian courts
2. Right to Use (Hak Pakai)
The Right to Use title is another legal option that allows foreigners to hold long-term rights over land. This title is typically granted to individuals who hold a stay permit (KITAS or KITAP) and can be issued for residential purposes. The Hak Pakai is initially valid for 30 years, with extensions possible up to 80 years in total.
Benefits of Hak Pakai:
Provides a certificate registered with the Indonesian Land Office (BPN)
Recognized as the most secure title available to foreigners
Allows you to obtain building permits and register utilities in your name
3. Indonesian Legal Entity (PT PMA)
Foreigners who plan to develop property commercially can establish a foreign-owned company (PT PMA). The PT PMA can acquire the Right to Build (Hak Guna Bangunan) and the Right to Use titles. This structure is suitable if you intend to build rental villas, resorts, or other businesses.
Benefits of PT PMA:
Enables you to conduct business legally
Secure long-term land rights under the company’s name
Attractive option for investors planning commercial development
Important Note:
Many foreigners are tempted to use a nominee arrangement (where an Indonesian citizen holds the title on your behalf). This practice is risky, illegal under Indonesian law, and can result in the loss of your investment. At The Bali Lawyer, we strongly advise against nominee schemes and instead help you establish secure, fully compliant structures.
Step-by-Step Process of Buying Land in Bali
Whether you choose leasehold, Hak Pakai, or PT PMA, buying land involves several legal steps:
1. Conduct Due Diligence
Before signing any agreements or paying deposits, it is critical to conduct a thorough investigation of the property. Due diligence includes:
Verifying land ownership certificates with the Land Office (BPN)
Checking zoning regulations to ensure the land can be used for your intended purpose
Confirming there are no disputes, mortgages, or encumbrances
Reviewing boundaries and obtaining a land survey
2. Draft the Agreement
After due diligence, a legal agreement is prepared. For leasehold, this is a Lease Agreement (Perjanjian Sewa). For Hak Pakai or PT PMA purchases, a Notarial Deed (Akta Notaris) is drafted outlining your rights and obligations.
3. Signing and Notarization
The agreement must be signed in the presence of a licensed Notary (PPAT), who will formalize the transaction and submit it for registration.
4. Payment of Taxes and Fees
Property transactions in Indonesia incur taxes and administrative fees, such as:
Acquisition Duty of Right on Land and Building (BPHTB)
Income tax on the seller
Notarial fees
Land certificate registration costs
5. Registration of Title
Once payment is complete, the transaction is recorded with the Land Office, and the official certificate (Hak Pakai or Hak Guna Bangunan) or the registered lease agreement is issued.
6. Building Permit (IMB) and Utilities Registration
If you plan to build, you must apply for a Building Permit (IMB) and register utilities (electricity, water) under your name or company.
Key Considerations When Buying Land in Bali
Zoning Regulations
Different areas in Bali are zoned for residential, commercial, or agricultural use. It is crucial to confirm that your planned activity complies with the zoning regulations of the location.
Minimum Lease Duration
Leasehold agreements should be registered with a minimum term of 25 years to protect your rights and comply with legal standards.
Tax Obligations
Even as a foreign leaseholder or Hak Pakai holder, you are responsible for paying annual land and building taxes (PBB).
Inheritance and Transfer
You should plan for the future transfer of your rights to heirs or new buyers. Proper legal planning ensures your interests are protected.
Risks of Nominee Structures
Nominee arrangements are illegal and unenforceable. If discovered, the land can be confiscated, and you risk losing your investment. Always use a legal structure recognized by Indonesian law.
Advantages of Investing in Bali Real Estate
Bali continues to attract investors and retirees due to:
A strong tourism market driving demand for rental villas and hospitality businesses
High potential for property value appreciation
Favorable climate and lifestyle appeal
Developed infrastructure and international connectivity
Supportive government initiatives for foreign investment
Why Work with The Bali Lawyer?
Buying land in Bali requires more than just signing a contract. You need clear guidance and trustworthy legal support to avoid costly mistakes and ensure compliance. Here is why clients choose us:
Experienced Legal Team: We specialize in real estate transactions for foreign investors.
End-to-End Service: From due diligence to registration, we handle every step.
Transparent Advice: We explain your options clearly, so you can make informed decisions.
Secure Transactions: We ensure all documents and procedures comply with Indonesian law.
Personalized Support: We tailor our services to your goals, whether residential or commercial.
How to Start Your Land Purchase Journey in Bali
Define Your Objectives
Decide if you are purchasing for personal residence, retirement, or investment.Choose the Right Ownership Structure
Select leasehold, Hak Pakai, or PT PMA based on your purpose and eligibility.Engage Professional Assistance
Working with a qualified legal service is the safest way to protect your investment.Begin Due Diligence
We will conduct checks on the land’s legal status, zoning, and compliance.Complete the Transaction Confidently
With our guidance, you can finalize your purchase legally and securely.
Frequently Asked Questions About Buying Land in Bali
Can I get financing as a foreigner?
Most Indonesian banks do not provide mortgages to foreigners. Purchases are usually cash transactions, although some private financing options may be available.
Can I build immediately after purchase?
You can build once you have secured the correct title (Hak Pakai or Hak Guna Bangunan) and obtained a Building Permit (IMB).
How long does the process take?
The timeline varies depending on due diligence, agreement drafting, and government processing, but typically ranges from 6 to 12 weeks.
Do I need to be in Indonesia to complete the transaction?
You can grant Power of Attorney to a representative to handle parts of the process, but you may need to be present for final signing.
Ready to Make Your Bali Property Dream a Reality?
Whether you are an investor, retiree, or entrepreneur, owning land in Bali can be a rewarding experience when done legally and securely. At The Bali Lawyer, we will protect your interests, guide you through regulations, and ensure your transaction is compliant every step of the way.