Last Updated on August 2, 2024 by Yasmina
Bali’s stunning landscapes, vibrant culture, and booming tourism industry make it an attractive destination for property investment. However, many foreigners wonder if they can buy property in Bali.
This guide explores the legal options, requirements, and tips for foreign property investment in Bali, helping you navigate the process successfully.
Table of Contents
1. Legal Framework for Foreign Property Ownership
Indonesian Property Laws:
- Foreigners cannot own freehold land (Hak Milik) in Indonesia.
- However, legal mechanisms allow foreigners to invest in property under specific conditions.
Ownership Options for Foreigners:
Hak Pakai (Right to Use):
- Description: A right-to-use title allows foreigners to lease land or property for an extended period (up to 30 years, with the possibility of extensions).
- Usage: Suitable for residential purposes and can be registered in the foreigner’s name.
- Requirements: You must be a legal resident of Indonesia, which typically requires a valid visa such as a KITAS (Temporary Stay Permit).
PMA (Foreign Investment Company):
- Description: Setting up a PMA allows foreigners to invest in property through a company structure.
- Usage: Suitable for commercial investments, such as hotels, resorts, and large-scale developments.
- Requirements: Establishing a PMA involves legal and administrative processes, including registering the company and obtaining necessary permits.
Leasehold Agreements:
- Description: Foreigners can enter into long-term lease agreements with Indonesian landowners.
- Usage: Lease agreements can last up to 80 years (initial lease of 25-30 years, with options to extend).
- Requirements: Ensure the lease agreement is legally binding and registered with the National Land Agency (BPN).
2. Steps to Buying Property in Bali
1. Research and Choose a Property:
- Market Research: Understand the local real estate market, including prices, locations, and types of properties available.
- Engage a Real Estate Agent: Work with a reputable local real estate agent with experience dealing with foreign clients.
2. Legal Consultation:
- Hire a Lawyer: Engage a lawyer familiar with Indonesian property law to assist with the legal aspects of the purchase.
- Due Diligence: Conduct thorough due diligence to ensure the property has a clear title and is free of legal disputes.
3. Establish Ownership Structure:
- Hak Pakai: Apply for the right-to-use title if buying for residential purposes.
- PMA: Set up a foreign investment company if investing commercially.
- Lease Agreement: Negotiate and draft a long-term lease agreement if applicable.
4. Purchase Agreement:
- Sign Agreement: Once due diligence is complete, sign the purchase agreement or lease contract.
- Payment: Transfer the agreed-upon funds, ensuring all payments are documented and legally compliant.
5. Registration and Permits:
- Register Title: Ensure the property title or lease is registered with the National Land Agency (BPN).
- Obtain Permits: Acquire any necessary permits or licenses required for property usage.
3. Tips for Buying Property in Bali
Work with Reputable Professionals:
- Real Estate Agents: Choose agents with good reviews and experience dealing with foreign buyers.
- Lawyers: Hire a lawyer who specializes in Indonesian property law.
Understand the Local Market:
- Market Trends: Keep an eye on market trends and potential areas for growth.
- Location: Consider the location’s infrastructure, accessibility, and future development plans.
Conduct Thorough Due Diligence:
- Title Search: Verify the property’s ownership history and ensure no disputes or encumbrances exist.
- Legal Compliance: Ensure all legal requirements and documentation are in order.
Plan for the Long Term:
- Investment Goals: Be clear about your investment goals and plan for potential changes in property laws.
- Exit Strategy: Consider your exit strategy, including the potential for selling the property in the future.
FAQs Can Foreigners Buy Property in Bali
Can foreigners own land in Bali?
Foreigners cannot own freehold land in Bali, but they can invest through mechanisms like Hak Pakai (right to use), PMA (foreign investment company), or long-term lease agreements.
What is Hak Pakai?
Hak Pakai is a right-to-use title that allows foreigners to lease land or property in Indonesia for up to 30 years, with the possibility of extensions.
Can foreigners set up a business in Bali
Yes, foreigners can set up a PMA (foreign investment company) to invest in commercial properties and businesses in Bali.
How long can a lease agreement last for foreigners?
Lease agreements for foreigners can last up to 80 years. They are typically structured as an initial lease of 25-30 years with options to extend.
Do I need a lawyer to buy property in Bali?
It is highly recommended to hire a lawyer who specializes in Indonesian property law to ensure the purchase is legally compliant and to assist with due diligence
Wrapping It Up
Buying property in Bali as a foreigner involves navigating Indonesian property laws and understanding the available ownership structures. You can successfully invest in Bali’s growing real estate market by engaging reputable professionals, conducting thorough due diligence, and adhering to legal requirements. Whether you’re looking for a vacation home, a retirement spot, or a commercial investment, Bali offers a range of opportunities for foreign buyers.
About Nour Estates
We started Nour Estates with a simple idea: to make finding your dream land in Indonesia as easy and enjoyable as a day at the beach. Our team is a mix of local folks and people from around the world who fell in love with Indonesia just like you. We’ve been in your shoes, faced the challenges of buying land here, and learned all the ins and outs. Now, we’re here to share that knowledge with you.
We are here to find you the perfect property to invest in. Contact us today, and let’s start this exciting journey together!
