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Exa: yaraestateslombok.com
Exa: yaraestateslombok.com
Bali Zero handles visas, company setup, tax and property compliance in Indonesia. Ask us directly on WhatsApp.
Chat with Bali Zero on WhatsAppIndonesia's Basic Agrarian Law (Undang-Undang Pokok Agraria, UUPA No. 5/1960) remains the foundation of all land law in the country. Under this framew
Indonesia's Basic Agrarian Law (Undang-Undang Pokok Agraria, UUPA No. 5/1960) remains the foundation of all land law in the country. Under this framework, only Indonesian citizens (Warga Negara Indonesia, WNI) may hold Hak Milik, the strongest form of freehold ownership. Foreign nationals and foreign-owned entities are explicitly excluded from this title.
However, the legal landscape is not a complete dead-end for foreigners. Government Regulation PP No. 18/2021, which superseded the previous regulation PP No. 103/2015, formalized the right of foreigners holding a valid stay permit (KITAS or KITAP) to acquire property under Hak Pakai, or Right of Use. This title allows the holder to occupy and use land for an initial period of 30 years, extendable by 20 years, and then renewable for a further 30 years — a potential total of 80 years of tenure.
For those wishing to conduct business, a foreign-invested company (PT PMA) may acquire land under Hak Guna Bangunan (HGB, Right to Build) for commercial development. HGB is granted for an initial 30 years, extendable by 20 years, and renewable — making it the standard vehicle for hospitality and real estate development projects.
A third structure, Hak Sewa or leasehold, remains widely used in Bali's villa and commercial property market. While leasehold does not confer ownership in any form, long-term lease agreements of 25 to 50 years, often with extension clauses, are legally valid and routinely used by both individuals and businesses. The lease must be formally notarised and registered to offer meaningful legal protection.
The most legally precarious structure — and one that remains alarmingly common — is the nominee arrangement, in which an Indonesian national holds Hak Milik on behalf of a foreigner. Indonesian courts have consistently held such agreements to be void as violations of public policy. Assets held through nominee structures carry significant risk of loss, with no recourse available through the formal legal system.
At Bali Zero, we see the consequences of poorly structured property transactions regularly. Clients arrive having signed lease agreements with no notarial deed, having paid for Hak Milik through an In
donesian nominee, or having established a PT PMA without understanding what land rights that entity can actually exercise. The gap between what is marketed and what is legally sound in Bali's property
sector remains very wide.
PP 18/2021 was a meaningful reform. It extended Hak Pakai tenure, clarified procedures for foreigners with valid stay permits, and brought more transactions into a formal legal framework. But the regulation requires strict compliance — the foreigner must hold a valid residency permit, the property must meet minimum value thresholds set by provincial decree, and the title transfer must be executed through a notary (PPAT). These steps are non-negotiable.
The single most important piece of advice we give every prospective property buyer: structure first, negotiate second. Title type, entity structure, and permit status must be determined before any money changes hands. What you own — or think you own — in Indonesia is determined entirely by what is written in the national land registry.
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