What Can I Buy in Indonesia
What Can I Buy in Indonesia?
Buying property in Indonesia, including Bali, is different from many other countries because of strict regulations on foreign ownership. Here’s a detailed guide to what foreign investors can and cannot legally buy, plus tips to navigate the process safely.
Right to Use (Hak Pakai - SHGB)
This is the most common option for foreigners. It gives you the legal right to use and occupy land or buildings for a set term, usually 25 years, with options to extend up to 80 years. While you don’t own the land freehold, this right is legally recognized and allows you to live in, lease, or develop the property within the agreement terms.
Leasehold (Hak Sewa)
Foreigners often buy leasehold agreements, which are contracts allowing you to lease land or a villa for a long period—commonly 25 to 30 years, with renewal options. Leaseholds provide a secure way to control property without full ownership but require carefully drafted contracts to protect your interests.
Foreign-Owned Company (PT PMA)
If you plan to develop commercial properties, resorts, or apartment buildings, you can establish a foreign-invested company (PT PMA). This company can hold a Right to Build (Hak Guna Bangunan or HGB) title, which allows ownership of buildings on land owned by the company for an initial period of 30 years, extendable up to 80 years. While more complex and costly to set up, this option provides greater control and is widely used for larger investments.
Freehold Ownership (Hak Milik - SHM) – Not Available to Foreigners
Full freehold land ownership is reserved exclusively for Indonesian citizens. Some foreigners attempt “nominee” arrangements where an Indonesian holds the title on their behalf, but this is illegal and carries significant risk, including total loss of the property.
Why Use a Buyer Advisory in Bali?
There are no centralized, buyer-friendly property portals in Bali like in other countries. About 90% of property listings appear only on social media, which can be full of scams, misleading information, and untrustworthy sellers.
Properties often must be sourced through trusted local connections and relationships — something only experienced buyer advisors can provide.
Using a buyer advisory saves you time, reduces risks, and helps avoid costly mistakes.
As the saying goes: “If you think it’s expensive engaging a buyer’s advocate, wait and see how much it costs when you don’t use one here in Bali.” Agents can disappear with deposits quickly if you’re not protected.
Important Tips for Foreign Buyers:
- Everyone greets you with a big smile and is very warm and welcoming — but trust us, no one is your friend. Always engage experienced Indonesian legal counsel and Buyer Advisors who understand local laws and customs.
- Avoid nominee arrangements and deals that ask for large upfront deposits without proper safeguards.
- Stay updated on property and investment regulations, which can change.
- Work with reputable professionals to ensure your purchase is secure, legal, and matches your investment goals.
For a tailored consultation on property ownership options and to navigate Indonesia’s complex regulations safely, contact MDT Property Group’s expert Buyer Advisory team today