When most people think about "buying property," they picture their name on a title deed. In Bali it doesn't work like that — and it's the first thing to understand before you send anyone a deposit.
The Indonesian constitution reserves outright land ownership (Hak Milik, or freehold) for Indonesian citizens only. No foreigner — from Europe, Australia, anywhere — can hold Bali land in their own name as freehold. Full stop. Anyone telling you otherwise is either mistaken or steering you into an illegal structure that can cost you the entire investment.
The good news: there are two legal, notary-registered routes that foreigners have used to hold property in Bali for years without issue. Let's walk through both.
Leasehold — a long-term lease
Leasehold is by far the most common way foreigners invest in Bali. In essence it's a long-term lease of the land, typically 25–30 years, with a contractually secured option to extend for a further 25–30 years.
For the duration of the leasehold you have full rights of use: you can occupy the land and building, rent it out to tourists on platforms like Airbnb, and sell the leasehold on to another buyer. The agreement is signed before an Indonesian notary (PPAT), who also verifies that the landlord genuinely owns the land.
The critical points are the length of the leasehold and the extension option — and above all how that option is legally secured. "30 years with the possibility of extension" without a concrete mechanism in the contract is just a promise. Insist on seeing the conditions and price at which the extension applies, and whether any future owner of the land is bound by it.
Advantages of leasehold
- Lowest entry cost and simplest structure
- Fast to complete — weeks, not months
- No company, no additional annual accounting
- Fully transferable — you can sell the villa before the leasehold ends
Disadvantages of leasehold
- It is not ownership "forever" — once it expires (including the option), the land reverts to the landlord
- Value declines over time as the years count down (which is why length and the extension option matter so much)
PT PMA — ownership via a company
The second route is to set up a PT PMA — an Indonesian foreign-owned company. The company then holds the property under Hak Pakai (right to use) or Hak Guna Bangunan (right to build).
This is the route for investors who genuinely operate in Bali — running multiple villas, holding property long-term as a company asset, or spending significant time on the island. A PT PMA also lets you legally employ staff, obtain an investor visa and invoice for services.
A PT PMA means annual accounting, tax filings and certain minimum investment requirements. For a single villa held passively it's usually heavier than needed; for a portfolio or active rental business it makes the most sense. At Live Your Bali we hold exactly this kind of structure for our villa management.
What to avoid: the nominee
In Bali you'll also hear about the nominee structure — where an Indonesian (the nominee) buys freehold land "in their name," but signs a set of side agreements that effectively hand control to the foreigner. It looks like a workaround, and in practice that's exactly what it is.
Indonesian courts have repeatedly ruled that nominee agreements designed to disguise prohibited foreign land ownership are void. In the worst case the foreigner can lose the entire investment with no right to compensation. A serious developer will not push you into a raw nominee structure for your villa. If someone does, treat it as a red flag.
What about taxes?
Yes, Bali has taxes too — and it's better to know upfront than to be surprised.
Exact figures and regime depend on whether you hold a leasehold as an individual or through a PT PMA. This is precisely the area where it pays to have a tax advisor and notary on hand — and to sort it out before you sign, not after.
The most common mistake isn't the wrong villa. It's signing into a structure you didn't understand.
The process, step by step
- Choose your structure based on whether you want to hold passively (leasehold) or actively / as a portfolio (PT PMA).
- Verify the land — through a notary (PPAT), confirm the seller is the true owner and the land has no legal defects (liens, disputes, wrong zoning).
- Check the zoning — not every plot allows a rental villa. Insist on seeing the building permit (PBG) and the certificate of occupancy (SLF).
- Have the contract reviewed by an independent lawyer or notary — especially the leasehold length, the extension option and what happens when it ends.
- Sign before the notary and register. Only here does your right come into existence.
This article is a general overview, not legal or tax advice. Indonesian law evolves and every case is different. Before any commitment, have your specific situation reviewed by an Indonesian notary or a lawyer specialising in property. We're happy to recommend vetted contacts.
How we do it
At Live Your Bali we build villas and sell them to European investors — and we keep the structure and management clean and sensible. Our villas are on leasehold with a notary-secured extension option, we handle operations and rentals through our own property management company (a PT PMA), and we run the entire legal process with a Balinese notary.
We've completed and sold two projects this way and have two more under construction. When you're ready, we'll walk through the numbers and the structure for your specific situation — no obligation, and straight about the risks.
Read on: the full buying process step by step · why Bali specifically