Invest in Bali

FREEHOLD

Foreigners cannot own properly a property in Indonesia. All property, land or buildings, have to be registered in the name of an Indonesian citizen. However you can own a PMA (international company) can and the company can own a property in Freehold, if the company is domiciled in Indonesia. But there is a lot of restriction, and it’s depend on the domain, the function of the company. So we could advise you a lawyer to inform you.

 

LEASEHOLD

When you lease a property you will lease it for the period in the lease contract which is usually a basic of 25 years, but can be anything between a couple of years to more than 50 years, as most of the time you can get an option for extending the lease until 25/30 years (depending on the lease agreement being offered and what you want). In this case the total amount of the property transaction has to be paid up front, before lease periods starts.

Basically when obtaining a lease contract, you become the effective owner of that property for the period of the lease with all obligations and privileges that come with the property. You have the right to sell the lease and you should also include it in your will. If the lease contract does not have an agreed extension condition then the property will be returned to the landlord after the agreed period and he/she can put it on the market again or whatever he/she wants to do with it. In most cases the purchasing price will be less than a property with a freehold title.

– Details : Hak Milik/ Hak Pakai :

It seems, however that the Indonesian government has responded to the need of foreigners to being able to invest in a home in Bali, without needing an Indonesian nominee. This arrangement is called “Hak Pakai”. Hak means right, and Pakai means use, so it’s “Right of Use”. Hak Pakai can be issued to (foreign) individuals, but also to companies, which are domiciled in Indonesia. Hak Pakai is for people living here, therefore in possession of a permanent resident visa, a document named Kitas. It does not mean that you cannot leave Indonesia, or cannot own property in other countries as well. It just means that you spend the major time of the year in Indonesia. Hak Pakai is not the same as Leasehold (Hak Sewa). Leasehold is a notary contract with an owner, and the ownership certificate doesn’t change. Hak Pakai is an official certificate issued by the land offices. A foreigner can only have one Hak Pakai title on his or her name.The Hak Pakai certificate is valid for an initial 25 years, and can be renewed after that. Some companies seem to offer prepaid renewals for up to a total of 100 years. It’s freely transferable to another name, so you can buy and sell existing Hak Pakai titles. So, if you want property on your own name in Indonesia, and you are planning to live here, use the Hak Pakai arrangement.