Indonesia offers stunning landscapes and attractive investment opportunities—but its laws around land ownership can be complex, especially for foreigners. If you’re considering buying property in Bali or anywhere else in Indonesia, it’s essential to understand what’s legally possible, and what isn’t.
The Short Answer
No, foreigners cannot legally own land in Indonesia under a freehold title (Hak Milik). This form of ownership is reserved exclusively for Indonesian citizens.
But that doesn’t mean foreigners are left without options. The law allows alternative ownership structures that give long-term usage rights and legal protection—if properly set up.
Legal Options for Foreigners
Here are the main legal frameworks available to non-Indonesians:
1. Hak Pakai (Right to Use)
This is the most accessible and legal way for foreigners to control property. It grants the right to use land or a building for an initial period of up to 30 years, with extensions up to 80 years.
- Can be used for residential purposes
- Must be registered with the National Land Agency (BPN)
- The property must be built on government-designated land
2. Hak Guna Bangunan (Right to Build)
Used mainly by PT PMA (foreign-owned companies), this right allows you to construct and own buildings on Indonesian land for up to 30 years (extendable).
- Ideal for commercial ventures or rental investments
- Requires a registered company in Indonesia
- Land use must comply with local zoning
3. Leasehold (Hak Sewa)
This is the most common route for individual foreign investors. A leasehold grants the right to use land or property for a fixed period (usually 25–30 years), and is:
- Fully legal
- Renewable by mutual agreement
- Ideal for villas, apartments, and business spaces
What About Nominee Arrangements?
In some cases, foreigners purchase freehold property using an Indonesian citizen as a “nominee”. While still practiced, this setup is legally risky and not officially protected by law. If a dispute arises, the foreign party has little legal recourse.
The Role of a PT PMA
If you want to invest at a larger scale, open a business, or hold multiple properties, forming a PT PMA is a legal and recognized path. It allows your company to lease or hold property titles under Hak Guna Bangunan and Hak Pakai, with proper licensing.
Setting up a PT PMA requires:
- Company registration and a tax ID (NPWP)
- Minimum capital investment
- Business licenses depending on your activity
Conclusion
While Indonesia restricts land ownership for foreigners, there are multiple legal and secure ways to invest in property—with proper structure and local guidance. The key is to stay within the legal frameworks and avoid shortcuts that could expose you to risk.
At Mata Property Bali, we help foreign buyers navigate the legal landscape safely and confidently. Contact our team to explore the best strategy for your investment.
