Legal and Ownership Structures for Property in Bali: What Investors Must Know
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Can Foreigners Own Property in Bali?
Under Indonesian law, foreigners cannot own freehold land directly. Instead, they must utilize alternative legal structures, primarily leasehold agreements or a PT PMA (Foreign Investment Company).

Types of Ownership
- Hak Milik (Freehold): Only available to Indonesian citizens.
- Hak Guna Bangunan (HGB): A title that allows building rights for up to 80 years (30 + 20 + 30). Foreign investors can acquire HGB through a PT PMA.
- Leasehold: The most common structure for foreign investors. Leases typically run 20-30 years, with extension options negotiated directly with landowners.
- Hak Pakai (HP): A less common residential title, extendable up to 80 years, typically for long-term residency rather than investment.
PT PMA: The Corporate Ownership Route
A PT PMA is the most secure method for foreign investors. It enables ownership of HGB land and provides access to:
- Legal hiring of staff.
- Business permits.
- Work and residence visas (KITAS).
However, PT PMAs come with compliance obligations, including minimum capital requirements of IDR 10 billion (~€600,000) and ongoing tax filings.
Land Zoning and Permits
Understanding land color zones is crucial:
- Yellow Zones: Residential use.
- Red/Pink Zones: Tourism or commercial use.
- Green Zones: Protected agricultural land where construction is prohibited.
Investors must also ensure properties have:
- PBG (Construction permit).
- SLF (Occupancy certificate). Without these, the building may not be legally usable.
Short-Term Rentals and Pondok Wisata
To legally rent properties via platforms like Airbnb, a Pondok Wisata license is required. Foreigners without a PT PMA must partner with a local management company to comply with regulations.
Investor Perspective
Navigating Bali’s property laws can seem daunting, but with the right guidance, foreign investors can build secure and compliant portfolios. Legal clarity upfront prevents costly mistakes down the line.