Indonesia Investment: 11 Reasons Why Bali Property for Investment is Good

Indonesia has become the fourth best investment destination in Southeast Asia. While manufacturing, energy, and business sectors are most favoured by the United States and European companies, land and property investment in Indonesia are the most popular choice among individual investors.

With Bali being the gem in the Indonesian crown, it is no wonder that Bali property investment has consistently been a top performer in terms of returns and stability Ilot Property helps foreign investors find the best Bali property investment opportunities in the top established location.

Is Bali suitable for investment?

Indonesia is a great investment destination for a few reasons:

The ease of doing business here
The number of profitable opportunities
The steadily growing economy

Ilot Property has completed 80+ development projects in Bali since 2012. Our experts gathered big data to evaluate investment potential. We see at least 12 reasons you should consider Bali a high-return investment.

Stable Economic Growth
Throughout modern history, the Indonesian economy has shown stable growth despite any global crisis and fast recovery from eventual downfalls. Today’s main characteristics of the Indonesian economy are a regular inflation rate, high domestic demand, a strong job market, and consistent private funding flow. In the second quarter of 2021, the Indonesian economy gained positive growth amounting to 5.02%.

Indonesia is the only SEA member of the G-20. Experts forecast its entry into the G-7 by 2030. Indonesia is most likely to become the 5th largest economy by 2030.

Today, Indonesia is not only the fourth global investment destination after India, China, and the USA but also the largest economy in Southeast Asia, with a nominal GDP of more than $1 trillion.
High ‘Ease of Doing Business Ranking
The United Nations Conference on Trade and Development (UNCTAD) places Indonesia as the fourth prospective investing destination. Apart from that, in 2018 and 2019, two years consecutively, Indonesia was ranked Top Reformer in Asia for reforming its Ease of Doing Business by World Bank’s survey. This ranking includes 190 economies and evaluates multiple factors, including taxation, legal aspects, construction, etc.

Not only is Indonesia in the TOP-5 most promising country for overseas business according to Japan Bank for International Cooperation’s survey, but it continues to facilitate foreign investors, creating more opportunities for sustainable development, tax incentives, and welcoming corporate and individual investors.
High demand from the domestic market
The Indonesian domestic market is impressively strong and offers a favourable investment and business climate. An Economist Corporate Network survey in 2017 placed Indonesia on the list of Asia’s most attractive investment destinations precisely due to its robust domestic market.

Bali enjoys an abundance of domestic tourists, mainly from the capital Jakarta. In 2018 around 9.8 million domestic tourists arrived on the island.
Abundant Natural Resources
Besides the mining industry, Indonesian nature makes it one of the most attractive investment destinations for tourism. It has the second world’s highest biodiversity level after Brazil. Thousands of Indonesian islands are home to pristine beaches, coral reefs, seaweed beds, dunes, tidal flats, coastal mud, mangroves, turtles, fish, sea creatures, wild animals, diving, and surfing spots. Land and property have become the ultimate choice of individual investors. Bali and Lombok reign in this market.
Politics
Indonesia is a proud democratic country, able to maintain its political and social stability over the last 20 years. Nowadays, Indonesia is the world’s third-largest democracy with the largest Muslim population. This stability, strong democratic values, commitment to reforms, and a warm welcome to the investors are crucial for the investment environment.

The most recent study of political stability by Marsh McLennan in 2021 places Indonesia among countries with low political risk, next to Western European countries, Australia and North America.

In recent years, the World Bank has indicated that Indonesia has improved several indicators such as Government Effectiveness, Regulatory Quality, and Control of Corruption.
Demographics
Another reason to invest in Indonesia is its demographics and average population age. Indonesia is characterised by a large middle class, a young workforce and a lower percentage of a non-productive age population.

To start with, Indonesia is the fourth most populous country in the world. Yet, over 60% of its population comprises young people working and living in urban areas, choosing modern lifestyles and actively supporting the domestic market. High demand and a fast-growing economy are the fair results of a young, active, well-educated, and working population.

The most positive impact of these demographic bonuses will appear in the next few years by 2035. The middle class is expected to grow by 90 million people by 2030, while the productive population should reach 64%.

Indonesia is not only the most populous but may also be home to the wealthiest people on the planet. 36% of all world’s billionaires live in the Asia Pacific region —and by 2025, Indonesia itself will see a 67% growth of wealthy people owning more than $30 million value assets each.
Focus on Investors
The President of Indonesia leads a firm policy backing major industries. An investment priority list was created in 2021, and the New 10 Bali initiative outlined 14 sectors open to foreign and local investors and 10 destinations of priority for government backing and development.

Top sectors to invest in include tourism, renewable energy, infrastructure, manufacturing, mining, and creative economy. Moreover, those investors who choose an open industry from the list or invest in one of the priority Economic Zones are eligible to receive tax incentives, support to create infrastructure, work permits, and setting up a legal business in Indonesia.

Today, investments are regulated and supported by the Ministry of Investment/Investment Coordinating Board (BKPM). They are expected to contribute to the national economic growth of 5.4% to 6% in 2022, with total investments amassing IDR 1,200 trillion.
Numerous Opportunities
INA (Indonesia Investment Authority) and the Ministry of Investment (BKPM) laid a strategic project map of investment opportunities all over Indonesia to assure the equal distribution of investment afflux and stable economic growth of the country, as well as to present all Indonesian regions, not only the most famous one, as Bali for tourism or Java for industries.

The strategic map also includes a feasibility study, supporting future investors and saving them up to 2 billion they may need to spend on relevant studies.
Infrastructure Improvements
Many investors’ concerns were mostly regarding infrastructure. And it is understandable – the country lies across more than 17,000 islands. The government is actively participating in improving the current infrastructure.

Over the last 5 years, the fiscal budget allocated for infrastructure has doubled from public and private contributions.

In Bali, many new highways are underway, including a link from the main entry seaport from Java to the touristic south. And a new airport in the North of the island is underway also.
Less Relative Risk
Indonesia may be considered an emerging market; however, it is one of the most stable economies in Asia and one of the best investment destinations in terms of returns. According to one study by MSCI and Bloomberg in 2011, the average annual return in Indonesia is over 25%.

More importantly, Indonesia is an emerging market which only means enormous room to grow and even higher returns in the nearest future.
Investment opportunities open for Foreigners
Few Asian countries are very strict about foreign investors and foreign ownership. Indonesia is developing better regulations and easier processes for non-Indonesian investors. Starting from 2015, both individual foreigners and companies can legally invest in Indonesia and can legally lease land or property.

Ilot Property has specialised in sourcing land, building luxury villas, and providing full-service property management for Bali property investment for 20 years. You can view our current off-plan development projects here. The process is straightforward and opens great hassle-free opportunities for foreign investors.
It’s the best option
Bali remains one of the top investment destinations with the highest average returns in the South Pacific. For many years, Bali was the main touristic centre bringing millions of people to Indonesia and up to 15% of the national Gross Domestic Product.

Today, the Bali property investment market is high-yielding, but the cost of entry is increasing. Ilot Property can help you select the best hassle-free investment opportunity for you at any scale and maximise returns from property in Bali. Contact us to get and learn more about Bali property investment