Being one of the hottest holiday destinations of the world, Bali is also attracting a huge number of foreigners to invest in the island of the Gods by buying property in Bali. However, buying property in Bali is not as simple as of any other country. The foreign investors have to take help from local individuals and assign them as nominee but it leaves foreigners with essentially no protection over their investment.
In this article, you will learn how you as a foreigner can safely buy property in Bali – by setting up a foreign-owned company (PT PMA).
Bali property ownership by foreigners
According to the law 5 of 1960, property and real estate ownership in Indonesia regulates with two types of rights, relevant to this article:
- ‘Right to Own’ (Hak Milik)
- ‘Right to Build’ (Hak Guna Bangunan)
Majority of foreign investors have the perception that the property can be purchased in Bali with the help of an Indonesian citizen (a nominee) to act on their behalf to own the Hak Milik certificate.
However, they are unaware from the fact that it can be a massively risky thing to do as the local nominee can overtake the property and there is so less a foreign buyer can do to secure their investment.
How to Buy Property in Bali Safely?
The best way to invest in property in Bali for a foreign national is to choose a foreign-owned company (PT PMA) and attain the ‘Right to Build’ (Hak Guna Bangunan) license.
A foreign limited liability company ‘PT PMA’ of Indonesia has the right to acquire the Right to Build (Hak Guna Bangunan/ HGB) and Right to Use (Hak Pakai/HP) licenses.
This way you can enjoy the benefits of the property. It can either be inherited to a family member, can be leased to other people, or the Hak Pakai can get sold to an Indonesian.
If you are planning to hold a property for more than 70-80 years, you can apply for a new Hak Guna Bangunan and a Hak Pakai after the expiration of the old license.
Keep in mind that the Hak Pakai license can only be held if there is a building on the land. The property must have a minimum value and it must be located in a residential, trading, or in a tourist area as it is not allowed in Bali to buy land in agricultural or greenbelt zones.
The Process of Buying Property in Bali
To apply for Hak Pakai, one need to submit complete documents to the Indonesian National Land Office (BPN), requesting for the Hak Pakai over the property.
After the submission of all the documents and payment, the BPN will make sure that all the conditions of Hak Pakai are met and building permit (IMB) is correct, only then BPN will issue a Hak Pakai Certificate.
Since you are traveling to Bali to look for the property, don’t forget to book your stay in one of the luxurious villas in Bali. The Beautiful Bali Villas is here to cater all your vacation needs, for booking and reservations, give us a call at +62 (361) 370 5279.