Can foreigners buy property in Bali?

Are you considering buying property in Bali as a foreigner? This Southeast Asian island is a popular destination for international investors looking for a piece of paradise. However, there are restrictions and regulations in place for foreign ownership of property in Bali. In this article, we will explore the requirements and options for foreigners looking to purchase property in Bali.

Restrictions for a foreigner on buying properties in Indonesia

When it comes to owning property in Bali, there are several important legal aspects and restrictions that foreigners need to be aware of. In Indonesia, land ownership is subject to specific regulations, and this applies to Bali as well. As a foreigner, it’s essential to understand the types of property ownership, the methods of acquiring property, and the limitations that may be in place.

One of the primary restrictions for foreigners buying property in Bali is the prohibition on owning freehold land. This means that the majority of foreigners are not able to own land outright in Bali. However, there are alternative options, such as leasehold and right to use, which enable foreign investors to have a lawful interest in property for a specified period of time.

In addition, there are restrictions on the maximum size of the land and property that a foreigner can own in Bali. These limitations are important factors to consider when looking to invest in real estate on the island, and it’s crucial to fully understand and comply with these regulations to avoid any legal issues in the future.

Furthermore, the Indonesian government has specific guidelines and limitations in place for property ownership by foreigners, and it’s important to ensure full compliance with these regulations to conduct a property transaction legally and securely.

Leasehold and right to use

For foreigners seeking to buy property in Bali, the most common forms of ownership available are leasehold and right to use. Under a leasehold agreement, the purchaser is granted the use of the property for a specific period, as stipulated in the lease agreement. This can be an attractive option for those looking to invest in Bali’s real estate market without the ability to own freehold property.

Right to use, also known as “Hak Pakai,” is another option that allows a foreigner to acquire the right to build and use a property in Bali. This right is generally granted for a period of up to 25 or 80 years, and it can be an appealing choice for those looking for a longer-term property investment in Bali.

Both leasehold and right to use agreements provide foreigners with the opportunity to have a legal interest in Bali’s property market and can offer a viable avenue for property investment, with the added benefit of adhering to the legal framework governing property ownership for non-Indonesian citizens.

Foreign-owned companies

Foreigners can also own property in Bali through a foreign-owned company, known as a PT PMA (Penanaman Modal Asing). By establishing a PT PMA, foreigners can legally acquire property or real estate in Bali. This method of ownership enables the foreign-owned company to have the rights to acquire and own property, including land and buildings.

It’s important to note that the process of setting up a PT PMA involves specific legal requirements and must be done in compliance with Indonesian company laws and regulations. However, this method provides an avenue for foreign investors to have a stake in Bali’s property market and can be a suitable option for those looking to make substantial real estate investments on the island.

Establishing a foreign-owned company

Setting up a foreign-owned company in Bali involves a comprehensive process that includes meeting the legal and administrative requirements set forth by the Indonesian government. This typically includes obtaining the necessary permits, following the prescribed procedures for company registration, and ensuring full compliance with the laws and regulations governing foreign-owned businesses in Indonesia.

Foreign investors looking to establish a PT PMA in Bali must carefully navigate the legal and bureaucratic procedures, which may include obtaining a business license, securing approval from the Indonesia Investment Coordinating Board (BKPM), and meeting the specified criteria for foreign investment in Indonesia. Working with legal and financial professionals who have expertise in foreign company establishment in Indonesia can be instrumental in ensuring a smooth and legally compliant setup process.

Permits and certificates

Acquiring a property certificate from the Indonesian National Land Office (BPN) is a crucial step in the process of buying property in Bali as a foreigner. This certificate serves as proof of ownership and is essential for conducting legal property transactions in Indonesia. Additionally, obtaining the necessary building permits, such as the building permit (Hak Guna Bangunan) and the right to build permit, is imperative for foreign property investors looking to develop or construct property in Bali.

Moreover, it’s essential to ensure that all required permits and certificates are obtained through a thorough and diligent process, adhering to the legal and regulatory framework governing property ownership and development in Bali. Engaging the services of experienced professionals, such as legal consultants and real estate agents with expertise in foreign property transactions, can be invaluable in navigating the complexities of permit acquisition and ensuring full compliance with the applicable regulations.

Payment and evidence of purchase

Once a suitable property in Bali has been identified, the next crucial steps for a foreign buyer involve making the payment for the property and providing the requisite evidence of purchase. This typically includes the execution of a purchase agreement, the transfer of the purchase amount, and the acquisition of a certificate of property ownership.

Ensuring that the payment process and the documentation of the property purchase are handled in accordance with the legal and regulatory requirements is essential for the secure and lawful acquisition of property in Bali as a foreigner. Working with a reputable notary, legal advisor, or real estate agent can provide valuable support in navigating the property purchase process and ensuring that all necessary steps are completed in compliance with the applicable laws and regulations.

Building permit conditions

When seeking to develop or construct property in Bali, foreign investors must fulfill the conditions required to obtain a building permit (Permit to Build/Hak Guna Bangunan). These conditions may include adhering to zoning regulations, architectural and environmental considerations, and other specific requirements set forth by the local government and regulatory authorities in Bali.

Conducting a comprehensive due diligence process and enlisting the assistance of legal and construction professionals can be instrumental in ensuring that the conditions for obtaining a building permit are met in accordance with the legal and regulatory framework. By carefully adhering to these conditions, foreign property investors can proceed with the development or construction of property in Bali in a legally sound and compliant manner.

Relaxed regulations

In recent years, the Indonesian government has implemented relaxed regulations pertaining to foreign ownership of property in Bali, with the aim of attracting foreign investment and enhancing the country’s real estate market. These relaxed regulations have presented new opportunities for foreign investors, including the ability to acquire property for longer lease periods and an increased ease of property acquisition through foreign-owned entities.

The relaxed regulations have contributed to a more favorable environment for foreign property investment in Bali, offering a greater degree of flexibility and expanded options for foreign buyers and investors. By staying informed about these regulatory developments and working with knowledgeable professionals, foreign investors can navigate the evolving landscape of property ownership regulations in Bali with a clearer understanding of the available opportunities and legal requirements.

Safest options for buyers

When considering the safest options for buying property in Bali as a foreigner, it is recommended to engage in thorough due diligence, seek professional legal and financial guidance, and consider the use of a reputable and legally compliant structure, such as a PT PMA, for property acquisition. Working with experienced real estate agents, legal consultants, and financial advisors who specialize in foreign property transactions can provide valuable support and guidance throughout the property acquisition process.

Furthermore, ensuring full compliance with the legal and regulatory requirements, conducting comprehensive research on the specific property and its ownership status, and carefully navigating the permit and certificate acquisition processes are essential steps for foreign buyers looking to invest in Bali’s real estate market securely and with peace of mind.

Conclusion

Yes, foreigners can buy property in Bali under certain conditions and with the proper permits and certificates. These include establishing a foreign-owned company, obtaining a building permit, and providing proof of payment. The Indonesian government has relaxed regulations for foreign ownership of property in Bali, making it more accessible for foreigners. It is recommended for foreigners to utilize a company name when purchasing property in Bali for the safest option.