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Can Foreigners Own Property in Bali?

Indonesia’s property laws are designed to protect local ownership, meaning foreigners cannot directly own freehold land. However, there are legal alternatives for foreigners who wish to invest in or live in Bali, utilizing structures such as leasehold agreements or setting up foreign investment companies.

1. Leasehold Ownership:

• Leasehold is the most common way for foreigners to secure property in Bali. Typically, lease agreements run between 25 to 99 years, depending on the specific contract.



• Leasehold properties make up a significant portion of the foreign-owned real estate market in Bali, particularly in areas like Canggu, Seminyak, and Ubud.



• Fact: In Bali, popular areas like Seminyak and Canggu see leasehold prices for villas ranging from USD $200,000 to $500,000 for 25-30 year leases.



• Once the lease expires, the property returns to the original owner unless an extension is negotiated, usually before the lease’s expiration date.

2. Using a PMA (Foreign Investment Company):

• A PMA (Penanaman Modal Asing), or foreign investment company, is another legal method for foreigners to own property in Bali. Through a PMA, foreigners can obtain the Hak Guna Bangunan (Right to Build) or Hak Pakai (Right to Use) land titles.



• Fact: As of 2023, setting up a PMA requires a minimum capital investment of IDR 10 billion (approximately USD $670,000), and the company must fulfill annual reporting obligations to maintain its operational status.



• PMAs can hold property titles, rent out villas or land, and even build new properties, giving foreigners more control over their real estate investments. However, this process can be costly and requires legal expertise to comply with regulations.

3. Hak Pakai (Right to Use):

• Foreigners can obtain a Hak Pakai title, which is a right-to-use land title. This is commonly used for residential purposes and is renewable.



• Fact: Hak Pakai titles are typically granted for 25-80 years, depending on the agreement, and can be extended. These titles are often used by foreigners seeking long-term residence.



• Statistics: Approximately 30% of foreigners living in Bali use a Hak Pakai title for their residential properties, while others opt for leasehold agreements.

4. Nominee Arrangements (Not Recommended):

• Some foreigners attempt to purchase property using a local nominee who holds the title on their behalf. However, this practice is not legally enforceable in Indonesian courts.



• Fact: Legal disputes involving nominee agreements are common, and foreigners often lose their rights to the property in such cases. It’s highly recommended to avoid this method.



• Statistics: An estimated 10-15% of foreign buyers in Bali have entered into risky nominee arrangements, with many facing legal issues later on.

5. Villas & Luxury Real Estate:

• Many foreigners invest in luxury villas in Bali, using them both as personal residences and rental properties. The most popular areas include Uluwatu, Canggu, and Seminyak.



• Fact: Rental yields in popular tourist areas can be as high as 8-10% annually, making Bali an attractive destination for villa investment.



• Statistics: Bali attracts more than 6 million foreign tourists per year, making villa rentals a lucrative market. On average, villas in top locations generate rental income of USD $50,000 – $100,000 per year for foreign investors.

Real Estate Market Overview:

• Bali’s real estate market has been growing rapidly, driven by tourism and foreign investment. The demand for leasehold villas and luxury properties continues to rise, particularly in high-demand areas like Canggu, Ubud, and Seminyak.



• Statistics: As of 2023, the average price per square meter for leasehold property in Bali is around IDR 20-25 million (USD $1,300 to $1,700), depending on location. Prices in tourist hotspots can be significantly higher.

Key Takeaway:

While foreigners cannot directly own freehold land in Bali, they can still invest in leasehold properties, set up PMA companies, or obtain Hak Pakai titles. It’s important to work with experienced lawyers and notaries to ensure that property purchases comply with local laws and that investments are secure.

Let me know if you would like more details on any of these topics!

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