Can Foreigners Buy Property in Bali? Legal Options Explained
Bali has long been a top destination not only for tourists, but also for investors, retirees, and digital nomads looking to put down roots. With its breathtaking landscapes, vibrant culture, and growing real estate market, it’s no surprise that many foreigners ask the same question: Can foreigners buy property in Bali legally?
The answer is not straightforward—but with the right legal structure, guidance, and understanding of Indonesian property laws, owning property in Bali as a foreigner is absolutely possible. At The Bali Lawyer, we specialize in helping foreigners legally and safely navigate property ownership in Bali. This guide explains everything you need to know to secure your investment and protect your rights.
Why Foreigners Want to Buy Property in Bali
Bali offers an appealing combination of natural beauty, lifestyle, and investment opportunities. Common reasons foreigners want to purchase property here include:
Owning a private villa or vacation home
Investing in rental properties or guesthouses
Securing a retirement residence
Developing hotels, coworking spaces, or commercial ventures
Land banking for long-term appreciation
Whatever your reason, understanding the legal landscape is essential before making a purchase.
Can Foreigners Own Property in Bali?
Under Indonesian law, foreigners cannot directly own freehold land (Hak Milik). The Indonesian land ownership system is structured to protect national land rights, so only Indonesian citizens can hold full ownership over land in the form of a Hak Milik title.
However, foreigners can legally control and use property in Bali through several regulated structures. These include:
Hak Pakai (Right to Use)
Hak Guna Bangunan (Right to Build)
Leasehold Agreements
PT PMA Company Ownership
Nominee Structure (Not recommended)
Let’s look at each of these legal options in detail.
Legal Options for Foreigners to Buy Property in Bali
1. Hak Pakai (Right to Use)
Hak Pakai is the most legally secure title that foreigners can use under their personal name. It allows foreigners to use land and property for residential purposes for a fixed period, typically 25 years, with the option to extend up to 80 years.
Key points:
Only one property per foreigner can be registered under Hak Pakai
Property must be used as a residence (not for commercial activity)
Land must already be registered under Hak Milik and converted to Hak Pakai
Title must be registered with the National Land Agency (BPN)
Hak Pakai is ideal for foreigners who want to live in Bali full-time or part-time and want legal certainty under their own name.
2. Hak Guna Bangunan (HGB – Right to Build)
HGB is the right to build and own structures on land, typically for commercial use. Foreigners cannot hold HGB under their personal names, but it can be registered under a foreign-owned company (PT PMA).
Key points:
Valid for 30 years, extendable up to 80 years
Ideal for hotels, resorts, villas for rent, restaurants, and offices
Must be held through a properly registered PT PMA
Land can be owned under HGB, and buildings belong to the PT PMA
This is the most secure way for foreigners to own and operate commercial property in Bali.
3. Leasehold Agreements (Sewa Tanah or Sewa Bangunan)
Leasehold is one of the most common methods foreigners use to control property in Bali. This agreement allows you to lease land or buildings for a fixed term, often 25 to 30 years, with renewal options.
Key points:
Full legal agreement between foreigner and landowner
Does not require company setup
Can be used for residential or commercial purposes
Renewable and transferable with agreement clauses
This structure is straightforward, but it’s critical to have the lease agreement professionally reviewed to protect your investment.
4. Through a PT PMA (Foreign-Owned Company)
If you are planning to run a business or develop property in Bali, the safest route is through a PT PMA, which allows 100% foreign investment in approved business sectors.
A PT PMA can:
Legally lease or build property under the company name
Hold HGB titles for commercial development
Sponsor foreign work and stay permits (KITAS)
Engage in property rental or hospitality businesses
Forming a PT PMA is the most secure way to operate real estate activities as a foreigner in Bali.
5. Nominee Structure (Use with Extreme Caution)
Some foreigners use local Indonesian citizens as “nominees” to hold property under their name while signing private agreements. While this may seem like a shortcut, it is not legally secure and highly discouraged.
Risks include:
No legal ownership protection
Agreements may not be enforceable in court
Risk of disputes or land seizure
Possible legal violations
At The Bali Lawyer, we strongly advise against using nominee structures unless fully supported by legal protections—which can be very complex and still risky.
Tax and Legal Responsibilities for Foreign Property Holders
Owning or leasing property in Bali comes with tax obligations and reporting requirements. Depending on the structure you use, you may need to:
Pay income tax on rental revenue
Pay BPHTB (Land and Building Rights Acquisition Duty)
File annual personal or corporate tax returns
Pay VAT if applicable on lease agreements
Report property use to the local authorities
Our legal team ensures that all your tax responsibilities are clearly explained and managed, helping you avoid fines or audits.
What to Watch Out for When Buying Property in Bali
Navigating Bali’s property market requires more than just a good deal—you need to stay legally compliant and vigilant. Watch out for:
Unlicensed agents or “middlemen”
Properties without proper land certificates
Lease agreements that lack clarity on extensions
Buildings without IMB (building permits)
Zones not suitable for foreign use or commercial activity
Before you sign any agreement or pay a deposit, it’s essential to perform due diligence on the property, title, permits, and seller. The Bali Lawyer provides comprehensive legal checks to protect your investment from the start.
Zoning and Land Use Regulations
Zoning laws in Bali are strict and enforced. Not all areas are approved for foreign ownership or business use. Zoning categories include:
Residential
Tourism
Commercial
Green zones (protected areas)
Foreigners must ensure that their intended property lies within a zone that allows their intended use—whether that’s for living, renting, or developing.
The Bali Lawyer checks zoning maps and regulations before proceeding with any transaction, ensuring your plans are fully legal and risk-free.
Can Foreigners Get a Mortgage in Bali?
Foreigners are generally not eligible for local mortgages or bank loans in Indonesia. Most property purchases must be made in full, using personal funds or financing from abroad.
For this reason, leasehold or staged payment developments are popular among foreign buyers. We can advise on secure payment structures and escrow arrangements to protect your funds.
How The Bali Lawyer Helps You Buy Property Safely
Buying property in Bali as a foreigner involves multiple steps and layers of compliance. At The Bali Lawyer, we provide complete legal support for:
Leasehold agreements
Hak Pakai title registration
PT PMA company setup
Property due diligence
Land certificate checks
Building permit verification (IMB, SLF, PBG)
Tax and zoning compliance
Legal drafting and translations
Whether you’re buying a villa, starting a hospitality business, or investing in land, our goal is to help you navigate the system safely and confidently.
Secure Your Bali Property Investment the Right Way
While foreigners cannot directly own freehold land in Bali, there are several legal and secure methods to control, use, and profit from property here. Understanding the correct structures and working with a qualified legal team ensures you stay protected.
At The Bali Lawyer, we’ve helped hundreds of clients from around the world buy, lease, and develop property in Bali the legal way. Let us help you make a safe, smart investment in one of the world’s most beautiful destinations.
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