What a foreigner can actually own in Bali

A foreign individual cannot hold Hak Milik, Indonesia’s freehold title. This is not a gap to be worked around. It is article 21 of the 1960 Basic Agrarian Law, and the courts apply it. Three routes remain, each with its own term, cost and risk.

Why a nominee is the worst option

Buying freehold in the name of an Indonesian friend or partner is still offered on Bali. Article 26(2) of the same law says any transfer that passes freehold to a foreigner, directly or indirectly, is void by law. The land falls to the state, and the money paid cannot be reclaimed. Supreme Court decisions treat the side agreements as void, so the foreign buyer cannot enforce them. In 2026 the Bali police set up a task force against land fraud and warned foreigners that nominee purchases risk prosecution and confiscation. We do not sell nominee structures.

Route 1: Hak Pakai, the right of use

The only land title a foreign individual can hold in their own name, registered at the land office. Under Government Regulation 18/2021 it runs for 30 years, can be extended by 20 and renewed by 30. The conditions: a residence permit (KITAS or KITAP), one plot per person of up to 2,000 m², and a minimum price, on Bali IDR 5 billion for a house and IDR 2 billion for an apartment unit. The 80 years are not automatic. Each extension is a new decision by the land office, granted if the land is used as intended.

Route 2: a building right through a company

A foreign-owned Indonesian company, a PT PMA, can hold Hak Guna Bangunan, the right to build, also for 30 + 20 + 30 years. Since October 2025 the minimum paid-up capital is IDR 2.5 billion, and the investment plan must exceed IDR 10 billion per business line and location, not counting land and buildings. The company reports quarterly to the investment ministry and files its own tax returns.

The 2026 change matters here. Since July 2026 Bali no longer issues new licences to foreign-owned companies in 18 business lines, among them real estate and other accommodation. Existing companies keep their licences. Setting up a new company to rent out a villa is therefore no longer a routine step. Ask a lawyer about your specific business line before you plan around it.

Route 3: a lease (Hak Sewa)

The usual route on Bali. You lease the land or the villa from the Indonesian owner for an agreed term; 25 + 25 or 30 + 20 years are common. Two facts sales brochures tend to leave out. First, a lease is not a registered land right: the land registration regulation (24/1997) does not list it. Your protection is the contract, not the land certificate. Second, the extension is only what the contract says. Without a written clause with a price mechanism, the owner has no duty to renew. What happens to the building when the lease ends is also a question of the contract.

A lease also loses value as it runs: the next buyer pays for the remaining term. A villa bought with 25 years left and sold with 12 is a different asset, even if the building has not changed.

What we check before a project goes on our site

• Who holds the underlying title, checked at the land office, and whether every co-owner has signed.
• The remaining term, the extension clause (a fixed price or an independent valuation, not an open option) and whether the lease passes to heirs.
• What happens to the building at the end of the lease, in writing.
• The zoning of the plot and the building approval. Without the right zone there is no rental licence.
• That the contract is drawn up by a notary and payments go to the party named in it.

EM Villas is sold as a lease of 30 + 30 years. The terms are on the project page, and we can go through the contract structure with you on a call.

This article is general information, not legal, tax or investment advice. Rules in Indonesia change, sometimes by administrative decision. Confirm your own position with a qualified adviser before you commit.