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Table Of Contents

A Quick Indonesian Law-101

Options for Buying / Investing in Property
            KITAS / KITAP
            PT PMA
            Bonus Tips

Building A Villa For Your Airbnb in Bali
            More About The Pondok Wisata License
            Documents Needed To Apply
            Steps To Leasing A Property


Bali Heights ROI 1


With its dreamy beaches, friendly people, and booming property investment market, it’s no wonder people are looking to invest in Bali.

You’ll often hear that the only way foreigners can invest in property in Bali, is by using a local nominee on their behalf…

Spoiler alert, it’s not.

That’s actually a pretty risky choice of buying property. You’ll be put in a position where you hold no legal rights or protection over the property; We’re talking none, zero, nada.

A Quick Indonesian Law-101

There are 3 official “rights” that you need to know before going ahead;

  1. Hak Milik = the Right to Own
  2. Hak Guna Bangunan = the Right to Build
  3. Hak Pakai – the Right to Use

Using a local nominee means you’re buying under that person’s name to indirectly “get” the Hak Milik.

To put it simply, a non-Indonesian citizen cannot own land in Indonesia but can acquire a leasehold title to a building.

Keep on reading to find out how!

Options for Buying / Investing in Property


In case you didn’t already know, a KITAS is a temporary residence permit visa whilst a KITAP is a permanent residence permit visa.

Obtaining one of these permits will give you several benefits and one of them is legally “owning” a property. Keep in mind that KITAS/KITAP holders can only acquire the Hak Pakai / the Right to Use, along with other limitations.

We’ll give you a short table a little later on, to help you understand the specifications and make your life a bit easier (you’re welcome).


A safe way for you to buy property in Bali is through the creation of a PT PMA or what you would normally call a foreign limited liability company. This will allow you to acquire both the Hak Guna Bangunan (Right To Build) and the Hak Pakai (Right To Use).

PT PMA (Foreign-Owned Company)KITAS/KITAP holders
Right To Build & Right To UseRight To Use
The subject of the rights holder is a person who is domiciled in Indonesia (KITAS/KITAP)The subject of the right holder is a person who is domiciled in Indonesia (KITAS/KITAP)
Used for office buildings, warehouses, which have economic value and are indeed needed by PT PMA in carrying out its business activities Example: restaurants, beach clubs, agencies, etc (must be a business permitted by the government for foreigners to own it)Used for a residence
Does not have to be on leased landMust be on leased land
Can be an asset of PT PMACan be inherited
Can use, construct, own the buildings on the land, perform legal actions (releasing, transferring, and changing)Right to use the land for a certain period, right to rent for buildings, right of ownership to apartment units, and residential houses
The maximum period of 30 years (can be extended for a maximum period of 20 years)Right to use on state land: a maximum of 30 years extended for a maximum period of 20 years and renewed for a maximum period of 30 years

Rights to use on overland with management rights: a maximum of 30 years extended for a maximum period of 20 years and renewed for a maximum period of 30 years

Right to use on owned land: max. 30 years and can be renewed with the deed of granting the right of use on the land with the right of ownership
Unlimited plot1 plot of land per person/per family
  • Can have up to max. 20,000 m2 (square meter) per plot, managed through the Head of the Land Office
  • The Head of the National Land Agency is only intended for applicants whose land area is more than 10,000 m2 (square meter) per plot
Max. 2000 m2 (square meter)
-Rules for the purchase price of the property in Bali: Single house: min. 5 billion Apartment units: min. 2 billion


Bonus Tips

  • If you want to extend the property lease after 80 years, it’s doable.
  • You can hold a right-to-use (Hak Pakai) certificate only if the land already has a building on it and there are rules on using the property with a right-to-use certificate as a business.
  • Due to the minimum value of the property rules, you can’t build nor get a property in Bali that is in an agricultural zone (greenbelt), this green zone serves to preserve agricultural land.
  • You can only lease a property in tourist, residential, or commercial areas.
  • It’s important to double-check whether the zoning allows you to do certain kinds of activities. Don’t worry we can help you with that here at Legal Legends


Building a Villa for You Airbnb in Bali?

More about the Pondok Wisata License

Are you planning to start your own Airbnb business in Bali?

Airbnb’s in Bali are becoming increasingly popular here, and it’s a possible business venture.

Know that you’ll need a special license called a “Pondok Wisata”.

On top of that, you’ll also need to set up a PT PMA because it is a form of business activity (FYI all money-making activities in Bali, Indonesia owned by foreigners legally require a PT PMA).

Essentially, this license allows you to rent out a small house or homestay in Bali. It covers up to three bedrooms or up to five bedrooms.

Anything larger than that will require a full hotel license.

A Pondok Wisata license can only be under the name of an Indonesian citizen but you can manage the villa on behalf of your PT PMA with scope for business villa management (KBLI-551)

This license will be issued for a duration of 5 years and can be extended.

Taxes must also be paid on the property, but depending on the requirements of the local tax authority, this can be done monthly or annually. Even if the property does not generate income, you must still file the necessary tax documents.

You can expect a wait of 6-8 months before acquiring it.

Documents Needed To Apply

  • Apply NPWPD Number (Tax Number)
  • Apply document of ITR (zoning)
  • Apply document of UKL – UPL: (Environmental Management and
  • Environmental Monitoring Effort / Management System and Monitoring for Environment)
  • Apply document IMB (Change of the Function) – must be for “Pondok Wisata”
  • Apply document of NIB “Pondok Wisata”
  • Apply document of Tanda Daftar Perusahaan (Business License)

Steps To Leasing a Property

  1. Submit completed forms to the owner of the land:
    • Certificate of the land (copy)
    • SPPT – Tax (copy)
    • ITR zoning (copy)
    • KTP (copy)
    • KK (copy)
  2. Get the right to build with the correct building permit (IMB)


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