Indonesia offers some of the world’s most beautiful landscapes and promising real-estate opportunities. But for foreigners, the country’s land-ownership laws can seem complex. Before buying property in Bali or anywhere in Indonesia, it’s essential to understand what’s legally possible — and what isn’t.
The Short Answer
No, foreigners cannot directly own land under a freehold title (Hak Milik).
Freehold ownership is reserved exclusively for Indonesian citizens and cannot be transferred to a foreign individual.
However, foreigners still have several legal and secure alternatives that provide long-term control and usage rights over land and buildings when structured correctly.
Legal Options for Foreign Buyers
3. Leasehold (Hak Sewa)
For many private buyers, leasehold is the simplest and most popular route.
It grants the right to use land or property for a fixed term — usually 25 to 30 years — with possible renewals by mutual agreement.
- Fully legal and recognized
- Requires a written, notarized contract
- Common for villas, homes, or commercial premises
Leasehold ownership offers flexibility and affordability while avoiding the complexity of corporate structures. Make sure to secure a long term leasehold agreement!
Learn more about the difference between leasehold and freehold certificated in Bali, and Indonesia.
2. Hak Pakai – Right to Use
This is the most straightforward legal option for individuals.
Hak Pakai grants the right to use and occupy land or property for an initial period of up to 30 years and can be extended to a total of 80 years.
- Can be held directly by a foreigner or a PT PMA (foreign-owned company)
- Must be registered with the National Land Agency (BPN)
- Land must lie within a zone designated for residential or tourism use
Hak Pakai titles are typically issued for villas, apartments, or residential homes built on government-approved land.
3. Hak Guna Bangunan (HGB) – Right to Build
Used mainly by PT PMA companies, this right allows you to build and own structures on Indonesian land for up to 30 years, with extensions available.
- Suited for commercial or rental projects
- Requires a legally registered PT PMA company
- The land use must comply with local zoning and building regulations
This structure is ideal for investors operating villas, guesthouses, or hospitality projects under a business entity.
Learn more about the different legal certificate and options.
What About Nominee Arrangements?
Some foreigners still try to purchase freehold property through an Indonesian “nominee” who holds the title on their behalf.
While this practice exists, it is legally risky. Such agreements are not protected under Indonesian law, and if a dispute arises, the foreign buyer has little or no legal standing.
For long-term security, it’s always better to use one of the recognized ownership structures above.
That apply to married couple, and family too.
The Role of a PT PMA (Foreign-Owned Company)
If you plan to invest on a larger scale or operate a business, establishing a PT PMA is the only fully legal way to hold property beyond leasehold.
A PT PMA can obtain titles under both Hak Guna Bangunan and Hak Pakai, enabling the company to lease, build, and operate property in Indonesia.
To set up a PT PMA, you’ll need:
- Company registration through the Indonesian Investment Coordinating Board (BKPM)
- A tax ID (NPWP)
- Minimum paid-up capital
- Relevant business licenses
This structure suits investors who want to manage multiple assets, open a resort, or run a hospitality venture legally.
Conclusion
Foreigners cannot own land in Indonesia under freehold (Hak Milik), but several secure legal frameworks — Hak Pakai, Hak Guna Bangunan, and Leasehold — allow you to live, build, and invest confidently.
The key is to structure the transaction properly, register everything with the National Land Agency, and avoid informal shortcuts like nominee arrangements.
At Mata Property Bali, we help foreign buyers navigate Indonesia’s property regulations safely. Our team works closely with certified notaries and legal advisors to structure secure transactions and long-term investment strategies.
Contact us to learn which ownership structure best fits your goals and budget.
Written by Mata Property Bali.
