Can Foreigners Own Land in Bali? The Complete 2025 Legal Guide by The Bali Lawyer

Bali continues to attract expatriates, investors, and retirees from around the world who dream of owning a piece of paradise. Its vibrant culture, tropical weather, and booming property market make it one of Southeast Asia’s most sought-after locations for real estate investment. However, for foreigners, understanding land ownership laws in Indonesia is essential before making any purchase. The regulations can be complex, and one wrong move may lead to costly legal issues.

At The Bali Lawyer, we specialize in helping foreign investors navigate Indonesia’s property and investment laws. This comprehensive guide explains everything you need to know about foreign land ownership in Bali, including the legal framework, available options, and the best ways to secure your investment safely and legally.

Understanding Land Ownership Laws in Indonesia

In Indonesia, land ownership is governed by the Basic Agrarian Law (Undang-Undang Pokok Agraria or UUPA) of 1960, which stipulates that only Indonesian citizens have the right to own freehold land (known as Hak Milik). This means foreigners cannot directly own freehold property in Bali or any other part of Indonesia.

However, foreigners can legally hold land rights through several mechanisms designed to protect both local ownership and foreign investment. These alternatives include Hak Pakai (Right to Use), Hak Guna Bangunan (Right to Build), and ownership via a foreign-owned company (PT PMA). Understanding these options is key to investing safely in Bali.

1. Freehold Ownership (Hak Milik) – For Indonesian Citizens Only

Hak Milik is the highest and most secure form of land ownership in Indonesia. It grants the holder full ownership rights indefinitely, including the ability to sell, lease, or transfer the property. Unfortunately, foreigners cannot hold land under Hak Milik.

If you are a foreigner, you must explore alternative legal structures that allow property acquisition and control while staying compliant with Indonesian law.

2. Leasehold (Hak Sewa) – A Common Option for Foreigners

The leasehold system, or Hak Sewa, is one of the simplest and most popular ways for foreigners to gain long-term control over property in Bali. Under this system, a foreigner can lease land or property from an Indonesian owner for a fixed term—usually between 25 and 30 years—with the option to extend.

Key benefits of leasehold include:

  • Full legal control of the property for the lease duration

  • Right to rent, renovate, or resell the lease to another party

  • No need for company establishment or complex ownership structures

However, the property reverts to the owner at the end of the lease period unless an extension is negotiated. Proper legal agreements and registration are vital to protect your interests—something The Bali Lawyer can assist with to ensure all contracts are transparent and legally binding.

3. Right to Use (Hak Pakai) – For Foreign Individuals

Foreigners legally residing in Indonesia and holding a valid stay permit can acquire property under Hak Pakai (Right to Use). This right allows foreigners to use and occupy land for residential or commercial purposes for up to 30 years, with the possibility of extensions of 20 years and 30 years thereafter.

Foreign individuals are eligible to hold Hak Pakai titles if they:

  • Hold a valid KITAS (Temporary Stay Permit) or KITAP (Permanent Stay Permit)

  • Use the property for residential purposes only

  • Acquire the property from the government, an Indonesian citizen, or a legal entity

Hak Pakai provides strong legal protection and is registered under the foreigner’s name at the National Land Agency (BPN). This makes it one of the most secure options available for individuals looking to reside in Bali long-term.

4. Right to Build (Hak Guna Bangunan or HGB) – For Foreign-Owned Companies

For those looking to invest or build commercial projects in Bali, setting up a foreign-owned company (PT PMA) is an effective legal route. A PT PMA allows foreign investors to acquire land under the Hak Guna Bangunan (Right to Build) title.

Under HGB, the company can build structures on the land and operate for business purposes for an initial period of 30 years, extendable up to 80 years in total. Although the land itself remains state-owned, the PT PMA retains full control over the buildings and operations during the tenure.

This method is ideal for those who plan to:

  • Build villas, resorts, or rental properties

  • Open offices or commercial spaces

  • Invest in real estate development projects

The Bali Lawyer assists foreign investors with the entire PT PMA setup process, ensuring compliance with all legal, tax, and licensing requirements in Indonesia.

5. Using a Nominee Agreement – Why It’s Not Recommended

Some foreigners attempt to acquire land in Bali by using an Indonesian nominee—a local citizen registered as the property owner on paper. While this arrangement may seem convenient, it is not legally secure and can lead to serious risks.

Nominee agreements are not recognized under Indonesian law and may be declared void if challenged. In disputes, the nominee legally owns the property, leaving the foreigner with little protection.

At The Bali Lawyer, we strongly advise against this method and help clients choose transparent, lawful alternativessuch as Hak Pakai or PT PMA ownership to safeguard their investments.

6. Steps to Legally Acquire Property in Bali as a Foreigner

Purchasing property in Bali as a foreigner requires careful planning, proper documentation, and professional legal support. Below is a simplified outline of the steps involved:

  1. Determine Your Ownership Structure
    Choose between Hak Pakai (for individuals) or PT PMA (for business investors).

  2. Legal Due Diligence
    Verify land ownership, zoning, and building permits to ensure there are no legal issues or restrictions on the property.

  3. Draft and Sign Agreements
    Prepare lease or sale agreements in compliance with Indonesian law. All contracts should be bilingual (English and Bahasa Indonesia) and notarized.

  4. Land Registration
    Register the property under the foreign individual or company’s name at the National Land Agency (BPN).

  5. Obtain Necessary Permits
    Depending on the property type, you may need to secure building permits (IMB) or operational licenses.

  6. Stay Compliant with Immigration and Tax Regulations
    Ensure your stay permit, tax ID, and property usage align with the latest Indonesian regulations.

The Bali Lawyer provides full legal assistance throughout this process—from due diligence to registration—to ensure your property purchase is secure and fully compliant.

7. Common Mistakes Foreigners Make When Buying Property in Bali

Foreign property buyers often fall into legal traps due to lack of understanding of local regulations. Common mistakes include:

  • Purchasing freehold land through a nominee agreement

  • Skipping legal due diligence before signing contracts

  • Using unclear or improperly translated agreements

  • Failing to register property ownership correctly

  • Ignoring tax or visa implications

These errors can lead to disputes, loss of property rights, or financial penalties. Working with experienced legal professionals like The Bali Lawyer ensures all procedures are handled properly and your investment remains protected.

8. Why Work with The Bali Lawyer

At The Bali Lawyer, we are a Bali-based legal consultancy specializing in foreign investment, immigration, and property law. Our expert team helps international clients navigate the complexities of Indonesian regulations with clarity and confidence.

We assist with:

  • PT PMA company formation

  • Hak Pakai and Hak Guna Bangunan property acquisitions

  • Leasehold agreement drafting

  • Land due diligence and registration

  • Legal document translation and notarization

With years of experience working with expats and investors, we make the process of acquiring or leasing land in Bali simple, transparent, and legally secure.

9. Secure Your Property Investment in Bali Today

Owning or investing in property in Bali is a dream for many, and with the right legal guidance, it can be a smooth and rewarding process. Whether you want to build a home, open a business, or invest in Bali’s growing real estate market, understanding the legal framework for foreigners is essential.

The Bali Lawyer is here to guide you every step of the way—from choosing the right ownership structure to ensuring all legal documentation complies with Indonesian law.

Contact The Bali Lawyer

If you’re planning to invest or purchase property in Bali, contact The Bali Lawyer today for professional legal consultation. Our experienced team will help you understand your options, draft secure agreements, and handle all necessary permits to ensure your property investment is safe and fully compliant.

The Bali Lawyer
Your trusted legal partner in Bali for property, business, and immigration matters.