A Guide to Owning Property in Bali Using PT PMA

While foreign ownership of land in Indonesia is restricted, owning property in Bali is still possible through establishment of a Perseroan Terbatas Penanaman Modal Asing (PT PMA). This method offers a legal and secure path for foreigners to participate in Bali’s property market. This guide will equip you with the knowledge you need to know to navigate property rights and find the perfect investment.

Understanding the Options for Property Rights 

While owning a PT PMA (Penanaman Modal Asing) doesn’t directly grant you freehold ownership in Indonesia, it provides a secure and recognized way to hold property rights. Before you start hunting property  in Bali, it’s important to know the different types of property rights you can have:

1. Right to Build (Hak Guna Bangunan)

As a legal entity established in Indonesia, PT PMA allows you Right to Build which lets you own and develop a piece of land for up to 80 years. You can renew this right, making it a favorite among foreign investors. 

2. Right to Use (Hak Pakai)

Hak Pakai allows you to use and cultivate land in Indonesia for 25 years. It’s less common among foreigners, but it’s still possible in certain cases. The extension and renewal of Hak Pakai shall be carried out as long as the foreigner still has a valid residence permit in Indonesia. 

3. Leasehold (Hak Sewa)

This is another common option for PT PMA companies. You can secure leasehold rights for land and buildings, typically for 25-30 years with potential renewal options for an additional period. 

How to Buy Property in Bali Using PT PMA

To comply with Indonesia’s regulations regarding property ownership for foreigners, many foreign nationals set up a PT PMA company. Here’s how it works:

1. Setting Up a Company: Start by creating a PT PMA company with the Indonesian Investment Coordinating Board (BKPM). This involves getting a Tax ID, registering your company, and getting the necessary business licenses.
2. Buying Property: Once your PT PMA is up and running, it can buy property in Bali, like land and buildings. This way, you have control and possession of the property while following Indonesian property laws.
3. Lease Agreement: Keep in mind that property bought through PT PMA often has a lease agreement, typically up to 30 years with potential extensions depending on the negotiation and the regulations. Make sure the lease terms match your long-term investment goals.
4. Following the Rules: It’s important to follow Indonesian laws and regulations. PT PMA companies must provide yearly financial statements and stick to local rules. Consulting with legal or consulting experts can help you navigate the complexities of doing business in Indonesia.

How to Find the Right Property in Bali

Now, let’s talk about how to find the perfect property in Bali:

1. Budget Planning: Start by figuring out how much you can spend, considering not just the purchase price but also additional costs like taxes, legal fees, and upkeep.
2. Choosing a Location: Bali has lots of great places to choose from, so pick one that suits your lifestyle and investment goals.
3. Deciding on Property Type: Think about whether you want a villa, apartment, or land for development. Each option has its pros and cons.
4. Working with an Agent: A trustworthy real estate agent who knows the local market can make your property search easier. They can give you a list of available properties, set up viewings, and help with negotiations.
5. Online Property Listings: Check out online property listings, both local and international, to get a sense of the Bali real estate market. Websites like Rumah123, Bali Villa Finder, and Airbnb are great sources of information.
6. Doing Your Homework: Before you commit, do thorough research on the property you’re interested in. Check its legal status, inspect its condition, and learn about the neighborhood.
7. Legal and Tax Advice: Before making a final decision, consult with legal and tax experts who specialize in Indonesian property law. They can help ensure your investment is safe and in line with the law.

Owning property in Bali can be an exciting and rewarding experience, whether it’s for your home or as an investment. Understanding property rights using a PT PMA company, and conducting careful research will help you make a smart and secure investment in Bali.

Seven Stones Indonesia has  the experience and the right knowledge to make your property transaction smooth and trouble-free. Reach out to our team to discuss what you need regarding PT PMA setup or owning property in Bali.